Everything You Need to Know About Minimum Auto Insurance Requirements

As a driver, it is important to understand your state’s minimum auto insurance requirements. Auto insurance is mandatory in most states to protect drivers, passengers, and other individuals involved in a car accident. Failure to have proper auto insurance coverage can result in fines, license suspension, and legal liabilities. This article will explore the minimum auto insurance requirements in the United States and what they cover. Minimum Auto Insurance Requirements

What is Auto Insurance?

Auto insurance is a type of insurance that provides financial protection in case of an accident. The insurance policy pays for damages caused to other drivers, passengers, or property and medical expenses incurred by the driver and their passengers. Auto insurance also covers the costs of legal fees in case of a lawsuit.

Auto insurance policies vary from state to state, and it is important to understand the minimum requirements to comply with the law.

Coverage

The following insurance minimums must be bought to meet the financial responsibility criteria necessary to register your vehicle and obtain license plates:

No-Fault (Personal Injury Protection) – to cover medical costs, lost wages, and other reasonable and necessary costs, such as housekeeping services and transportation to medical appointments, for a driver, passenger, or pedestrian hurt in or by your car;

Liability insurance covers potential damage that your car, or any other vehicle you operate with the owner’s permission, may cause to other people or their property. In contrast, Uninsured Motorists insurance covers potential injuries that you, your family, or your passengers may sustain in a hit-and-run collision or an accident with an uninsured vehicle.

No-Fault Benefits: Protection from Personal Injury (PIP)

No-Fault, also known as Personal Injury Protection (PIP), is intended to compensate the driver, all passengers, and any pedestrians hurt by your car for economic losses (defined as medical/health costs, lost wages, and other reasonable and necessary expenses related to injuries sustained) up to $50,000 per person (“basic No-Fault coverage”), regardless of who was at fault or whether negligence was present.

No-Fault insurance aims to return people injured in car accidents to health and work as soon as possible. According to the No-Fault statute in New York, lawsuits resulting from auto accidents can only be launched for monetary losses that are beyond No-Fault benefits and for non-monetary damages (including pain and suffering) if a “severe injury” (as defined in the Insurance Code) is inflicted.

No-Fault insurance is only for personal injury protection;

 It does not cover expenses for repairs to your automobile’s body or any other party’s vehicles or other personal property. If an injury is caused by a vehicle accident, No-Fault is also primary to health insurance, which means it pays first.

Your insurer protects you and any household members under this policy from financial damages brought on by injuries received in car accidents anywhere in the United States, its territories and possessions, or Canada. It also offers protection for any passengers hurt while riding in your vehicle in accidents that occur in New York State, as well as for any visitor passengers who reside in New York State who are hurt while riding in your vehicle anywhere in the United States, its territories and possessions, or Canada, if another New York State auto insurance policy does not cover them.

New York State’s No-Fault law also protects all pedestrians hurt by automobiles.

Basic no-fault auto insurance coverage includes subject to statutory offsets for New York State disability, Worker’s Compensation, and Federal Social Security disability benefits, reasonable and necessary accident-related medical and rehabilitation expenses (following established fee schedules); 80% of lost wages from work, up to a maximum payment of $2,000 per month for up to three years from the date of the accident.

A death benefit of $2,000 (in addition to the $50,000 basic No-Fault limit), payable to the estate of a person eligible for No-Fault benefits who dies in a motor vehicle accident, and up to $25 per day, for up to a year from the date of the accident, to cover other reasonable and necessary expenses (such as household help and transportation costs to/from medical treatment) resulting from the auto accident.

However, most insurance contracts provide that a person is not eligible for No-Fault coverage if:

Except for emergency medical services provided at a general hospital

 Or by an ambulance worker outside of a general hospital, driving while intoxicated or impaired by drug use that leads to an accident is prohibited. However, suppose the driver is found guilty of operating a vehicle while intoxicated or impaired by alcohol or drugs. In that case, the No-Fault insurer has the right to pursue reimbursement from the drunk or drugged driver for the full amount of the No-Fault payments made by the automobile insurer for the emergency services rendered to the driver.

Intentionally inflicting their injuries; while operating or riding a motorcycle or all-terrain vehicle (ATV) (a pedestrian struck by a motorcycle or ATV is covered); while committing a crime; while in a vehicle that is known to be stolen; or while being the owner of an uninsured vehicle.

Property damage and bodily injury liability insurance

If a third party claims you (and anyone else driving your car with your permission), this liability coverage will defend you (and anybody else driving your car). Suppose your vehicle is involved in an accident that causes significant harm to others, deaths, or property damage. In that case, this policy will compensate the injured third party on your behalf.

Also, your insurance provider must offer you a legal defence against such claims without lowering your policy’s liability limits.

According to New York’s Automobile and Traffic Code, third-party bodily injury liability coverage must have the following minimum limits:

$50,000 for bodily injury (not resulting in death) sustained by two or more people in any one accident, or $100,000 for any injuries resulting in death sustained by two or more people in any one accident. $25,000 for bodily injury (not resulting in death), or $50,000 for any injury resulting in death, sustained by any person in any accident (subject to the above per person limits).

In New York, the minimum liability limits are commonly referred to as “$25,000/$50,000/$10,000” or “25/50/10” since the minimum amount of coverage required by law for property damage liability insurance for damage to a third party’s car or property is $10,000 per accident.

But, if your vehicle is used or operated in another state or Canadian province that mandates higher liability limits than the New York legal limitations or what was bought, your policy will cover those limits.

You can file a claim against the negligent party’s auto insurance.

 Policy for bodily injury and property damage responsibility if you are hurt in an auto accident or your 

automobile is damaged due to their carelessness. It is necessary to prove that the other party was at fault. Only if you suffered a “severe injury” as defined by the Insurance Code do you have the right to bring a lawsuit against another individual involved in the motor accident for pain and suffering. Where there has been bodily harm, you can also use a third party in court for property damage and other economic losses not covered by your no-fault insurance or exceeding its limits.

Following the terms of your insurance policy, suing another party would be a matter for you to handle on your own. Your insurer, under your policy, is not compelled to supply or pay for a lawyer you might choose or need to handle your claim against another party if you choose to sue someone else.

Even though your auto liability insurance policy covers any passengers hurt while riding in your car due to negligence on the part of the driver, your spouse’s injuries are likely to be excluded from liability coverage unless you acquire supplemental spouse liability insurance. Your spouse would still qualify for the basic No-Fault coverage mentioned previously. While looking for insurance, ask your insurance provider, agent, or broker if your spouse is covered for bodily harm liability under your policy.

Uninsured Drivers Insurance

Bodily injury coverage, which protects you, all household members, and other automobile occupants in case you or they sustain injuries due to the negligence of an uninsured driver or a hit-and-run driver, is another crucial aspect of your auto insurance policy. This required insurance does not cover auto body damage to your automobile or other property, and it only applies to bodily harm resulting from accidents in New York State.

The minimum bodily injury amounts needed for uninsured motorist protection in New York incidents are the same as those for liability insurance. You should check with your agent, broker, or insurer if you want this extension of coverage, as it can be added to this uninsured motorist policy for a small additional fee to give coverage for out-of-state accidents.

A claim should be made with your auto insurance provider under this policy if the driver of an uninsured car or a hit-and-run driver hurts someone in your car. Similarly, if you or a family member is hurt while unintentionally driving an uninsured car, or if you are hurt as a pedestrian by an uninsured or hit-and-run driver, you should make a claim with your auto insurance company. You may claim that insurance even if you don’t own a car, but one of your family members does.

Information and Enforcement System for Insurance (IIES)

Remember how crucial it is to consistently maintain the legal minimums for auto insurance as long as you own a vehicle. The Insurance Information and Enforcement System (IIES) is a tool the New York Department of Motor Vehicles (DMV) uses to identify uninsured automobiles.

All information regarding the people they insure for motor vehicle insurance, including cancellations, renewals, and the issuing of new policies, must be reported by insurers to the DMV. This data is stored in an electronic database that will track each registered vehicle’s insurance coverage over time. Your vehicle’s license and registration may be suspended, and you may also face severe financial penalties if you don’t keep liability insurance on your automobile at all times.

Even if your car is currently insured, these steps could lead to you receiving a notice from the DMV asking about your insurance status. Even if you are certain that your insurance is in force, you should immediately deal with any communication you receive from the DMV. For help replying to these letters, contact your insurance agent, broker, or company, or contact the DMV directly for guidance.

When Renting A Vehicle

The terms of car rentals differ depending on the rental business. 

Yet, all rental automobile agencies are legally obligated to offer minimal coverage. Collision Damage Waiver (CDW), commonly referred to as “Optional Vehicle Protection,” is a product that car rental agencies may sell (OVP). In New York State, car rental firms can sell CDW for stays of 30 days or less or, if not purchased, charge a renter the full cost of a stolen (lost) or damaged rental vehicle. Depending on the car’s value, the daily cost of the CDW could reach $12.

You do not need to purchase a CDW/OVP from the car rental company if a New York auto insurance policy covers you and rents a car for 30 days or less anywhere in the United States, its territories and possessions, or Canada. 

This is true regardless of whether you have collision or comprehensive coverage on your vehicle. Such protection is already offered at no additional cost. Also, many credit card companies offer their cardholders “collision damage coverage” in the form of insurance for automobiles they rent using their cards. This coverage stands alone from all others and typically only compensates for damages that exceed the sums recoverable under other active policies. This policy covers not all vehicles by credit card issuers.

You should contact the credit card issuer to determine what protection your credit card offers and what kinds of automobiles are covered. The New York State Insurance Law governs the coverage provided by these agreements, and it must be underwritten by an insurer authorised to do business in New York State.

Moreover, some car rental firms charge an extra fee for liability limits higher than the minimum 25/50/10. You should buy this extra insurance if you don’t have a car. It will provide coverage when renting a car if you already have a policy with higher liability limits. In addition to the mandatory No-Fault advantages, some rental car businesses can offer supplemental accident, health coverage, and insurance for things taken from the automobile. 

The Minimum Auto Insurance Requirements by State

Each state has its minimum auto insurance requirements. Below is a list of the minimum requirements for liability coverage in each state.

Alabama

In Alabama, the minimum auto insurance requirements are:

• $25,000 for bodily injury per person
• $50,000 for bodily injury per accident
• $25,000 for property damage per accident

Alaska

In Alaska, the minimum auto insurance requirements are:

• $50,000 for bodily injury per person
• $100,000 for bodily injury per accident
• $25,000 for property damage per accident

Arizona

In Arizona, the minimum auto insurance requirements are:

• $15,000 for bodily injury per person
• $30,000 for bodily injury per accident
• $10,000 for property damage per accident

Arkansas

In Arkansas, the minimum auto insurance requirements are:

• $25,000 for bodily injury per person
• $50,000 for bodily injury per accident
• $25,000 for property damage per accident

California

In California, the minimum auto insurance requirements are:

• $15,000 for bodily injury per person
• $30,000 for bodily injury per accident
• $5,000 for property damage per accident

Colorado

In Colorado, the minimum auto insurance requirements are:

• $25,000 for bodily injury per person
• $50,000 for bodily injury per accident
• $15,000 for property damage per accident

Connecticut

In Connecticut, the minimum auto insurance requirements are:

• $25,000 for bodily injury per person
• $50,000 for bodily injury per accident
• $25,000 for property damage per accident

Delaware

In Delaware, the minimum auto insurance requirements are:

• $25,000 for bodily injury per person
• $50,000 for bodily injury per accident
• $10,000 for property damage per accident

Florida

In Florida, the minimum auto insurance requirements are:

• $10,000 for bodily injury per person
• $20,000 for bodily injury per accident
• $10,000 for property damage per accident

Georgia

In Georgia, the minimum auto insurance requirements are:

• $25,000 for bodily injury per person
• $50,000 for bodily injury per accident
• $25,000 for property damage per accident

Hawaii

In Hawaii, the minimum auto insurance requirements are:

• $20,000 for bodily injury per person
• $40,000 for bodily injury per accident
• $10,000 for property damage per accident

Idaho

In Idaho, the minimum auto insurance requirements are:

• $25,000 for bodily injury per person
• $50,000 for bodily injury per accident
• $15,000 for property damage per accident

Illinois

In Illinois, the minimum auto insurance requirements are:

• $25,000 for bodily injury per person
• $50,000 for bodily injury per accident
• $20,000 for property damage per accident

Indiana

In Indiana, the minimum auto insurance requirements are:

• $25,000 for bodily injury per person
• $50,000 for bodily injury per accident
• $25,000 for property damage per accident

Iowa

In Iowa, the minimum auto insurance requirements are:

• $20,000 for bodily injury per person
• $40,000 for bodily injury per accident
• $15,000 for property damage per accident

Kansas

In Kansas, the minimum auto insurance requirements are:

• $25,000 for bodily injury per person
• $50,000 for bodily injury per accident
• $25,000 for property damage per accident

Kentucky

In Kentucky, the minimum auto insurance requirements are:

• $25,000 for bodily injury per person
• $50,000 for bodily injury per accident
• $25,000 for property damage per accident

Louisiana

In Louisiana, the minimum auto insurance requirements are:

• $15,000 for bodily injury per person
• $30,000 for bodily injury per accident
• $25,000 for property damage per accident

Maine

In Maine, the minimum auto insurance requirements are:

• $50,000 for bodily injury per person
• $100,000 for bodily injury per accident
• $25,000 for property damage per accident

Maryland

In Maryland, the minimum auto insurance requirements are:

• $30,000 for bodily injury per person
• $60,000 for bodily injury per accident
• $15,000 for property damage per accident

Massachusetts

In Massachusetts, the minimum auto insurance requirements are:

• $20,000 for bodily injury per person
• $40,000 for bodily injury per accident
• $5,000 for property damage per accident

Michigan

In Michigan, the minimum auto insurance requirements are:

• $20,000 for bodily injury per person
• $40,000 for bodily injury per accident
• $10,000 for property damage per accident

Minnesota

In Minnesota, the minimum auto insurance requirements are:

• $30,000 for bodily injury per person
• $60,000 for bodily injury per accident
• $10,000 for property damage per accident

Mississippi

In Mississippi, the minimum auto insurance requirements are:

• $25,000 for bodily injury per person
• $50,000 for bodily injury per accident
• $25,000 for property damage per accident

Missouri

In Missouri, the minimum auto insurance requirements are:

• $25,000 for bodily injury per person
• $50,000 for bodily injury per accident
• $10,000 for property damage per accident

Montana

In Montana, the minimum auto insurance requirements are:

• $25,000 for bodily injury per person
• $50,000 for bodily injury per accident
• $20,000 for property damage per accident

Nebraska

In Nebraska, the minimum auto insurance requirements are:

• $25,000 for bodily injury per person
• $50,000 for bodily injury per accident
• $25,000 for property damage per accident

Nevada

In Nevada, the minimum auto insurance requirements are:

• $25,000 for bodily injury per person
• $50,000 for bodily injury per accident
• $20,000 for property damage per accident

New Jersey

In New Jersey, the minimum auto insurance requirements are:

15,000 for bodily injury per person

• $30,000 for bodily injury per accident
• $5,000 for property damage per accident

New Mexico

In New Mexico, the minimum auto insurance requirements are:

• $25,000 for bodily injury per person
• $50,000 for bodily injury per accident
• $10,000 for property damage per accident

New York

In New York, the minimum auto insurance requirements are:

• $25,000 for bodily injury per person
• $50,000 for bodily injury per accident
• $10,000 for property damage per accident

North Carolina

In North Carolina, the minimum auto insurance requirements are:

• $30,000 for bodily injury per person
• $60,000 for bodily injury per accident
• $25,000 for property damage per accident

North Dakota

In North Dakota, the minimum auto insurance requirements are:

• $25,000 for bodily injury per person
• $50,000 for bodily injury per accident
• $25,000 for property damage per accident

Ohio

In Ohio, the minimum auto insurance requirements are:

• $25,000 for bodily injury per person
• $50,000 for bodily injury per accident
• $25,000 for property damage per accident

Oklahoma

In Oklahoma, the minimum auto insurance requirements are:

• $25,000 for bodily injury per person
• $50,000 for bodily injury per accident
• $25,000 for property damage per accident

Oregon

In Oregon, the minimum auto insurance requirements are:

• $25,000 for bodily injury per person
• $50,000 for bodily injury per accident
• $20,000 for property damage per accident

Pennsylvania

In Pennsylvania, the minimum auto insurance requirements are:

• $15,000 for bodily injury per person
• $30,000 for bodily injury per accident
• $5,000 for property damage per accident

Rhode Island

In Rhode Island, the minimum auto insurance requirements are:

• $25,000 for bodily injury per person
• $50,000 for bodily injury per accident
• $25,000 for property damage per accident

South Carolina

In South Carolina, the minimum auto insurance requirements are:

• $25,000 for bodily injury per person
• $50,000 for bodily injury per accident
• $25,000 for property damage per accident

South Dakota

In South Dakota, the minimum auto insurance requirements are:

• $25,000 for bodily injury per person
• $50,000 for bodily injury per accident
• $25,000 for property damage per accident

Tennessee

In Tennessee, the minimum auto insurance requirements are:

• $25,000 for bodily injury per person
• $50,000 for bodily injury per accident
• $15,000 for property damage per accident

Texas

In Texas, the minimum auto insurance requirements are:

• $30,000 for bodily injury per person
• $60,000 for bodily injury per accident
• $25,000 for property damage per accident

Utah

In Utah, the minimum auto insurance requirements are:

• $25,000 for bodily injury per person
• $65,000 for bodily injury per accident
• $15,000 for property damage per accident

Vermont

In Vermont, the minimum auto insurance requirements are:

• $25,000 for bodily injury per person
• $50,000 for bodily injury per accident
• $10,000 for property damage per accident

Virginia

In Virginia, the minimum auto insurance requirements are:

• $25,000 for bodily injury per person
• $50,000 for bodily injury

Washington

In Washington, the minimum auto insurance requirements are:

• $25,000 for bodily injury per person
• $50,000 for bodily injury per accident
• $10,000 for property damage per accident

West Virginia

In West Virginia, the minimum auto insurance requirements are:

• $25,000 for bodily injury per person
• $50,000 for bodily injury per accident
• $25,000 for property damage per accident

Wisconsin

In Wisconsin, the minimum auto insurance requirements are:

• $25,000 for bodily injury per person
• $50,000 for bodily injury per accident
• $10,000 for property damage per accident

Wyoming

In Wyoming, the minimum auto insurance requirements are:

• $25,000 for bodily injury per person
• $50,000 for bodily injury per accident
• $20,000 for property damage per accident

What Does Liability Insurance Cover?

Liability insurance covers the damages and injuries you cause to others and their property. If you are at fault in an accident, your liability insurance will pay for the following expenses:

• Medical expenses of other drivers and their passengers
• Repair or replacement of other drivers’ vehicles
• Property damage
• Legal fees in case of a lawsuit

Liability insurance does not cover your medical expenses or damages to your own vehicle.

Optional Auto Insurance Coverage

While liability insurance is the minimum required coverage, there are optional insurance coverages that you may want to consider. Some of these optional coverages include:

Collision Insurance

Collision insurance covers damages to your vehicle caused by a collision with another vehicle or object.

Comprehensive Insurance

Comprehensive insurance covers damages to your vehicle caused by non-collision events such as theft, vandalism, or natural disasters.

Personal Injury Protection

Personal injury protection (PIP) covers your medical expenses and lost wages in case of an accident.

Uninsured/Underinsured Motorist Coverage

Uninsured/underinsured motorist coverage protects you if you are in an accident with a driver who does not have insurance or does not have enough insurance to cover your expenses.

Conclusion

Understanding your state’s minimum auto insurance requirements is important to ensure compliance with the law and protect yourself in case of an accident. Liability insurance is the minimum required coverage, but optional coverages such as collision, comprehensive, personal injury protection, and uninsured/underinsured motorist coverage may provide additional protection. It is important to consider your individual needs and risks when choosing your auto insurance coverage.

FAQs

What happens if I don’t have auto insurance?

Driving without proper auto insurance can result in fines, license suspension, and legal liabilities.

Do I need to have insurance if I don’t own a car?

Some states require non-owners to have liability insurance if they frequently drive someone else’s vehicle.

Can I choose not to have collision or comprehensive insurance?

Collision and comprehensive insurance are optional coverages but may provide additional protection in an accident.

What is the difference between liability and full coverage insurance?

Liability insurance covers damages and injuries you cause to others, while full coverage insurance includes liability coverage, collision, and comprehensive coverage for your own vehicle.

Can my auto insurance cover damages cause by a natural disaster?

If you have comprehensive insurance, damages caused by natural disasters such as floods, earthquakes, or hurricanes may be covered.