Every state sets minimum car insurance requirements for drivers.

The coverage rules vary, but every state (save two) requires liability insurance, and some require additional coverage such as personal injury protection (PIP) or uninsured motorist coverage.

Here’s a look at what each state requires.

How each type of coverage works

Here’s when each type of coverage kicks in and what it covers.

Bodily injury liability

Bodily injury liability insurance protects you financially if you’re found responsible for an accident, and the other driver or one of their passengers is injured. This insurance can cover the injured party’s healthcare costs, lost wages, or legal counsel if you’re sued after an accident. It can also cover funeral costs.

Property damage liability

Property damage liability insurance, the second component of liability coverage, protects you financially if you’re at fault in an accident and the other driver’s vehicle needs repairs. It can also cover you if you hit an object, like a fence or mailbox.

The most common minimum liability limits required by states are $25,000 in bodily injury liability coverage per person; $50,000 in bodily injury coverage per accident; and $25,000 in property damage liability coverage per accident. This is written as 25/50/25 in policies.

Uninsured/underinsured motorist coverage

If you’re involved in an accident with an at-fault driver who doesn’t have enough insurance to cover your vehicle repairs or health care costs, uninsured/underinsured motorist coverage helps close the gap.

Uninsured/underinsured motorist is generally broken down into two parts, similar to liability insurance: uninsured/underinsured motorist bodily injury and uninsured/underinsured motorist property damage. It can pay for your medical bills and those of your passengers, as well as repairs to your car after an accident.

PIP

If you live in a no-fault auto insurance state, you may need PIP coverage, also called no-fault insurance. This coverage can pay for your medical bills or those of your passengers, lost wages if you or your passengers are unable to work after the accident, and essential services like childcare or housekeeping. PIP kicks in no matter who’s found at fault in an accident.

Medical payments

Medical payments, also called medical expense or Medpay coverage, are typically available in tort states (aka states that aren’t no-fault). It works similarly to PIP, but it’s more limited. For instance, Medpay will cover your or your passenger’s medical expenses but won’t cover lost wages or essential services.

States that don’t require car insurance

Car insurance is required in all U.S. states except New Hampshire and Virginia. Virginia drivers who opt out of auto insurance must pay a $500 uninsured motorist fee each time they renew their car registration.

Even though car insurance isn’t required, drivers in these states still need to provide proof of financial responsibility in the event of an at-fault accident. Depending on the severity of the accident, you could end up paying thousands of dollars out of pocket to cover repairs to someone else’s car or pay for their medical care from injuries. If you can’t afford to pay these expenses, your license may be suspended. For this reason, having liability coverage is smart even if it’s not required in your state.

Frequently Asked Questions (FAQs)

How much does minimum coverage cost?

Minimum auto insurance coverage varies in price based on several factors, including the insurance company you choose, your location, the type of car you drive, your driving record, and more. The average cost of a liability-only policy from Progressive ranges from $81 to $146 per month. But that cost could be lower or higher depending on the factors mentioned.

Should I get minimum or full-coverage car insurance?

Whether you opt for minimum or full coverage car insurance depends on your needs and preferences. It makes sense to get full coverage if you drive a newer car. But if your car is older and has high mileage, dropping to a minimum coverage policy could make sense.

What happens if I don’t have insurance?

Driving without adequate car insurance is illegal in most U.S. states and could result in hefty fines. Car insurance also provides valuable financial protection if you’re in an accident, and if you don’t have a policy, you could end up paying large expenses out of pocket.