Question: Do auto insurance requirements vary a lot in the U.S, or are most state minimums about the same? Also, are you obligated to buy car insurance or are there other options? Answer: By viewing our interactive state requirement map or list of minimum state coverages, you can see what all states and the District of Columbia require in regard to auto insurance. You'll find that liability requirements vary greatly from state to state. For example, Alaska mandates drivers carry bodily injury liability of $50,000 per person and $100,000 per accident along a $25,000 property damage limit (referred to as 50/100/25). In comparison, California requires bodily injury liability limits of only $15,000 person, $30,000 per accident and just $5,000 for property damage liability (15/30/5). And then there are no-fault states that require you to carry personal injury protection (PIP) or medical payments (MedPay), in addition to liability coverages. For instance, New York requires drivers to carry auto insurance liability limits of 25/50/10, uninsured motorist bodily injury of $25,000 per person, $50,000 per accident (25/50), and PIP limits of at least $50,000. The reason the mandated amount of auto insurance varies by state is because state governments are in charge of making their own financial responsibility laws in regard to motor vehicles. For all states to have the same car insurance mandates there would need to be a federal law on how to insure motor vehicles, which there is not. Generally you aren't obligated to buy car insurance if you don't have a car. However, if you are registering a car, you'll normally be asked for proof of financial responsibility. And while car insurance is the preferred method of showing financial responsibility by most drivers, there are other options beyond buying car insurance - in some states.
There are laws in some states that specifically require that car insurance be carried by car owners, while other states' laws are written in a way that car owners and drivers are only required prove to the state that they are maintaining an approved method of financial responsibility on their vehicle.Alternative methods allowed in such states typically include bonds, deposits of cash or securities, or self-insurance. For instance, Texas laws allow for car owners to show financial responsibility with a car insurance policy with liability limits of $30,000 per person and $60,000 per accident for bodily injury and $25,000 for property damage (30/60/25) or alternative methods of a:
- Surety bond
- Deposit of cash or securities
- Deposit of cash or cashier's check
- Self-insurance certificate (must own 25 or more vehicles)
- A certificate of financial responsibility should be issued in lieu of an insurance card for the above options.