Why are we forced to have car insurance?

Drivers need car insurance because it is required in every state, except two. You will need liability auto insurance and personal injury protection to drive in most states.

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Zaneta Wood, Ed.S. has over 15 years of experience in research and technical writing bringing a keen understanding of data analysis and information synthesis to reach a wide variety of audiences. She studied adult education and instructional technology at Appalachian State University as well as technical and professional communication at East Carolina University. Zaneta has prepared technical p...

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Joel Ohman is the CEO of a private equity backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Jo...

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Reviewed by Joel Ohman
Founder & CFP®

UPDATED: Jul 22, 2021

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Here's what you need to know...

  • Car insurance is required in every state except two
  • Insurance protects you from lawsuits involving liability and personal injury
  • Since everyone is required to carry insurance, it guarantees that you can have your car repaired if someone else damages it

When shopping for car insurance, some people wonder why they even have to purchase insurance. After all, isn’t it just the risk to myself that I’m taking?

When you do not carry car insurance, you are not just risking damage or liability to yourself. You are risking damage or injury to other people as well.

Insurance was developed for the purpose of protecting those who experience loss in any accident, such as personal injury or property damage from financial or personal loss.

Make sure you are fully protected. Start comparison shopping today by entering your zip code into our FREE comparison tool above!

How much liability do states require?


In general, the amount of liability you carry on your vehicle is around $25,000 per person and $50,000 per accident. Granted, a family could still sue, but they usually don’t provide you have liability insurance.

Therefore, insurance was developed for the purpose of trying to avoid lawsuits and civil actions by allowing states to establish minimums coverage requirements.

These minimums are considered the standard for pay outs in the event of lost life ruled your fault.

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Personal Injury Claims

The second kind of insurance that is usually required is personal injury. States vary on the amount, but it usually averages around $50,000.

This insurance is there to protect you from lawsuits and damage claims regarding injuries to persons due to an accident that is ruled your fault.

Again, without this type of car insurance, you are putting yourself at risk to lawsuits involving personal injury claims.

Here is a personal injury calculator that allows you to predict the approximate amount that you might have to pay due to injuries caused by your negligence.

Property Damage Risk


In addition to liability, you may also damage someone’s property and cause them to experience loss to their vehicle or damage that must be repaired.

Property damage amounts required by most states usually range around $20,000 for a minimum.

You can increase this coverage if you choose to.

The Purpose of Insurance

Insurance protects you from lawsuits and damage claims that people may make after an accident.

Insurance is not just for you; it is to protect other people as well.

It is up to each individual state to decide whether they will require drivers to carry car insurance protecting you from drivers who are uninsured or underinsured, as well as those who injure you or damage your property due to their negligence.

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How to Find the Best Insurance


Now that you understand the reasons why insurance is usually required, there are some things that you can do to get the best deals on your premiums while keeping accidents to a minimum.

  • Get a copy of your driving record – Insurance companies will pull a copy of your driving record when they decide what to charge you for your insurance premiums. So it’s best to have the same information that insurance companies have. You can get a copy of your driving record at
  • Keep your traffic violations to a minimum – If you can keep your driving record clean of violations, your insurance premium should stay low. Watch road signs and keep your speed in compliance. Leave plenty of stopping room between yourself and other drivers. Stop at all railroad crossings and obey all traffic lights.
  • Consider the type of vehicle you buy – Some sportier models cost more in premiums than standard vehicles. If you want a sporty car, shop around and compare prices with insurance so you’ll know you’re getting your money’s worth.
  • Ask for discounts – There are many discounts available including discounts for safe driving, student discounts, and military or veteran discounts.

All of these tips will help you save money on your car insurance and keep your driving record clean.

If you are searching for car insurance coverage, a good bet is to use our FREE online quote tool to compare rates from multiple companies at once! Enter your zip code below to get started now!

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