Auto Insurance Basics

Can I drive legally without insurance?

	NO! Almost every state requires you to have auto liability insurance. All states also have financial responsibility laws. This means that even in a state that does not require liability insurance, you need to have sufficient assets to pay claims if you cause an accident. If you don’t have enough assets, you must purchase at least the state minimum amount of insurance. But insurance exists to protect your assets. Trying to see how little you can get by with can be very shortsighted and dangerous. If you've financed your car, your lender may require comprehensive and collision insurance as part of the loan agreement. Below is an example of the state minimum limits for auto liability insurance. The first number refers to liability limits for bodily injury for any one person, the second to limits for all persons injured, and the third refers to property damage liability limits. For example, 20/40/10 means coverage up to $40,000 for all persons injured in an accident, subject to a limit of $20,000 for one individual and $10,000 coverage for property damage.
	Proof of insurance required (1) State Insurance required (2) Minimum liability limits (3) At registration At time of accident At all times in vehicle Insurer verification of insurance (4) Penalties for noncompliance (first offense) AL BI & PD Liab 20/40/10 Yes Yes Yes c $500 fine, license suspension (6) AK BI & PD Liab 50/100/25 No No (5) Yes b license suspension/revocation (6) AZ BI & PD Liab 15/30/10 No (7) Yes Yes a,b,d $250 fine, license suspension AR BI & PD Liab, PIP 25/50/25 Yes No No b,d $50-$250 fine CA BI & PD Liab 15/30/5 (8) Yes Yes Yes a,b,d $100-$200 fine CO BI & PD Liab 25/50/15 Yes Yes Yes a,d $500 fine CT BI & PD Liab, UM, UIM 20/40/10 Yes Yes Yes a registration suspension DE BI & PD Liab, PIP 15/30/10 No Yes Yes b,c,d $1,500-$2,000 fine; six-month license suspension DC BI & PD Liab, UM 25/50/10 Yes Yes Yes a,c $300-$500 fine or maximum 30 days jail FL PD Liab, PIP 10/20/10 (9) Yes Yes Yes a,d license/registration revocation (6) GA BI & PD Liab 25/50/25 Yes Yes Yes a,d $200-$1,000 fine, maximum 12 months jail (6) HI BI & PD Liab, PIP 20/40/10 No Yes Yes a $500 fine ID BI & PD Liab 25/50/15 No Yes Yes none $75 fine IL BI & PD Liab, UM 20/40/15 Yes Yes Yes b,c $500-$1,000 fine IN BI & PD Liab 25/50/10 Yes Yes No a 1-year license and/or registration suspension IA BI & PD Liab 20/40/15 No Yes Yes a removal of license plates/registration receipt, possible impoundment KS BI & PD Liab, PIP, UM 25/50/10 Yes No No a $300-$1,000 fine, maximum 6 months jail KY BI & PD Liab, PIP 25/50/10 Yes Yes Yes a,d $500-$1,000 fine and/or up to 90 days in jail LA BI & PD Liab 10/20/10 Yes No (5) Yes a,d $50 reinstatement fee, confiscation of plates ME BI & PD Liab, UM, UIM 50/100/25 (10) No Yes Yes a,b $100-$500 fine, 30-day license and registration suspension (6) MD BI & PD Liab, PIP (11), UM 20/40/15 Yes No No a up to $1,000 fine and/or 1-year jail (6) MA BI & PD Liab, PIP, UM 20/40/5 Yes No No a,d $500-$5,000 fine or maximum 1-year jail (6) MI BI & PD Liab, PIP 20/40/10 Yes No No a $200-$500 fine or maximum 1-year jail (6) MN BI & PD Liab, PIP, UM, UIM 30/60/10 No Yes Yes c $200-$1,000 fine, maximum 90-days jail (6) MS BI & PD Liab 25/50/25 No Yes Yes a $500 fine, license suspension MO BI & PD Liab, UM 25/50/10 Yes Yes Yes a,d license and registration revocation, $20 reinstatement fee (6) MT BI & PD Liab 25/50/10 No Yes Yes a $250-$500 fine or not more than 10 days in jail NE BI & PD Liab 25/50/25 Yes Yes Yes a,b $500 fine (6), license and registration suspension NV BI & PD Liab 15/30/10 No Yes Yes a,d up to $1,000 fine (6) NH FR only, UM 25/50/25 No No (5) No None none NJ BI & PD Liab, PIP, UM 15/30/5 (12) No Yes Yes a,d $300-$1,000 fine, community service, 1-year license suspension NM BI & PD Liab 25/50/10 Yes No No a,c,d up to $300 fine, registration suspension (6) NY BI & PD Liab, PIP, UM 25/50/10 (13) Yes Yes Yes a,d $150-$1,500 fine, maximum 15-days jail NC BI & PD Liab 30/60/25 No No No a,d $50 fine, 30-day registration suspension (6) ND BI & PD Liab, PIP, UM 25/50/25 No No (5) No c $150 fine, registration revocation, license suspension OH BI & PD Liab 12.5/25/7.5 No Yes Yes a,c 90-day license suspension, $75 reinstatement fee OK BI & PD Liab 25/50/25 Yes Yes Yes a,d* $250 fine, no more than 30 days jail, license and registration suspension (6) OR BI & PD Liab, PIP, UM 25/50/10 No Yes Yes a,c license suspension and/or revocation (6) PA BI & PD Liab, PIP 15/30/5 No Yes Yes a $300 fine, license and registration suspension (6) RI BI & PD Liab, UM 25/50/25 (9) No No No c $100-$500 fine, up to 3 months license/registration suspension SC BI & PD Liab, UM 25/50/25 Yes Yes Yes a,d $100-$200 fine, less than 30 days jail SD BI & PD Liab, UM 25/50/25 No Yes Yes a up to 1-year license suspension (6) TN BI & PD Liab 25/50/10 (9) No No Yes a up to $100 fine TX BI & PD Liab 20/40/15 Yes Yes No a,b** $175-$350 fine UT BI & PD Liab, PIP 25/50/15 (9) No Yes Yes d $400 fine VT BI & PD Liab, UM, UIM 25/50/10 No Yes Yes c less than $100 fine, license suspension (6) VA BI & PD Liab, UM 25/50/20 No No No a,b,c,d none WA BI & PD Liab 25/50/10 No No No a $250 fine, community restitution (6) WV BI & PD Liab, UM 20/40/10 Yes Yes Yes a 30-day license suspension, registration revocation, $200-$5,000 fine WI FR only, UM 25/50/10 No No No a license and or registration revocation (6) WY BI & PD Liab 25/50/20 Yes Yes Yes c,d* up to $750 fine; up to six months in jail (1) Proof of valid insurance. The form of evidence varies by state and may take the form of an insurance policy, binder, certificate of self-insurance, surety bonds, or certificate of deposit. Many states require insurance identification cards issued by the insurer. Self-certification, where the driver is required to identify the insurer and policy number in writing rather than in person, is not included. "Yes" in "At all times" columns includes states where drivers must produce proof on demand. (2) Compulsory Coverages: BI Liab=Bodily injury liability PD Liab=Property damage liability UM=Uninsured motorist PD=Physical damage Med=First party (policyholder) medical expenses UIM=Underinsured motorist PIP=Personal Injury Protection. Mandatory in no-fault states. Includes medical, rehabilitation, loss of earnings and funeral expenses. In some states PIP includes essential services such as child care. FR=Financial responsibility only. Insurance not compulsory. (3) The first two numbers refer to bodily injury liability limits and the third number to property liability. For example, 20/40/10 means coverage up to $40,000 for all persons injured in an accident, subject to a limit of $20,000 for one individual, and $10,000 coverage for property damage. (4) a. Insurer must notify Department of Motor Vehicles or other state agency of cancellation or nonrenewal. b. Insurer must verify financial responsibility or insurance after an accident or arrest. c. Insurer must verify randomly selected insurance policies upon request. d. Insurers must submit entire list of insurance in effect, which may be compared with registrations at a state agency. Also known as a computer data law. Also includes cases where insurers are required to report new issues and/or renewals. (5) Insured must provide evidence of insurance at some point after the accident to the Department of Insurance, other state agency, or law enforcement officer. Deadlines vary among the states. (6) Penalties are provided for in the law but may not be mandatory for first offenses. (7) Proof of insurance must be presented within 30 days of registration. (8) Low-cost policy limits for low-income drivers in the California Automobile Assigned Risk Plan are 10/20/3. (9) Instead of policy limits, policyholders can satisfy the requirement with a combined single limit policy. Amounts vary by state. (10) In addition, policyholders must also carry at least $1,000 for medical payments. (11) May be waived for the policyholder but is compulsory for passengers. (12) Basic policy (optional) limits are 10/10/5. Uninsured and underinsured motorist coverge not available under the basic policy but uninsured motorist coverage is required under the standard policy. (13) In addition, policyholders must have 50/100 for wrongful death coverage. *The system must be operational by July 1, 2008. **SB 1670, effective September 1, 2005 requires the Texas Department of Insurance to establish a vehicle insurance verification system. Source: Property Casualty Insurers Association of America; state departments of insurance and motor vehicles.

What if I lease a car?...