Which States Have the Lowest Car Insurance Requirements?

States with the Lowest Bodily Injury Liability Requirements

15/30 bodily injury limits (lowest tier):

These states require only $15,000 per person and $30,000 per accident for bodily injury:

• 1. Arizona: 15/30/10
• 2. California: 15/30/5
• 3. Louisiana: 15/30/25

Why 15/30 is inadequate:

• Average ER visit for serious injuries: $10,000–$50,000
• Surgery: $30,000–$150,000+
• ICU stay: $10,000+ per day
• Traumatic brain injury treatment: $500,000–$3,000,000+

One serious injury exhausts $15,000 in hours. If medical bills reach $50,000, you're personally liable for $35,000. Multiple injuries in one accident quickly exceed the $30,000 per-accident cap.

Real-world example: You cause an accident in California injuring two people: • Driver: $40,000 in medical bills • Passenger: $25,000 in medical bills • Total: $65,000

Your 15/30 policy pays: • Driver: $15,000 (per-person max) • Passenger: $15,000 (remaining from $30,000 accident limit) • You owe: $35,000

For a complete breakdown, see our guide on minimum car insurance requirements by state.

States with the Lowest Property Damage Requirements

$5,000 property damage limits (lowest tier):

These states require only $5,000 for property damage:

• 1. California: 15/30/5
• 2. Massachusetts: 20/40/5
• 3. New Jersey: 15/30/5
• 4. Pennsylvania: 15/30/5

Why $5,000 is inadequate:

• Average new car: $48,000
• Average repair cost (moderate accident): $7,500–$15,000
• Luxury vehicle repairs: $20,000–$50,000+
• Electric vehicle repairs: $15,000–$30,000+
• Multi-vehicle accidents: $50,000–$100,000+

$5,000 won't even cover a single totaled economy car. If you damage multiple vehicles or hit a luxury car, you're personally liable for the difference.

Real-world example: You rear-end a Tesla Model 3 ($42,000) at a stoplight, pushing it into a Honda CR-V ($35,000) ahead.

Damage: • Tesla: $25,000 (extensive rear and battery damage) • Honda: $18,000 (front-end damage) • Total: $43,000

Your $5,000 property damage coverage pays: $5,000 You owe: $38,000

For more on liability coverage, read liability car insurance explained.

Lowest Combined Minimum Requirements

States with the lowest overall minimums:

| State | Bodily Injury (per person/per accident) | Property Damage | Combined | |-------|----------------------------------------|-----------------|----------| | Arizona | 15/30 | 10 | 15/30/10 | | California | 15/30 | 5 | 15/30/5 | | Pennsylvania | 15/30 | 5 | 15/30/5 | | New Jersey | 15/30 | 5 | 15/30/5 | | Louisiana | 15/30 | 25 | 15/30/25 | | Iowa | 20/40 | 15 | 20/40/15 | | Texas | 30/60 | 25 | 30/60/25 |

Arizona has the dubious distinction of the lowest combined minimum in the nation.

These low limits were set decades ago and haven't kept pace with: • Rising medical costs (300% increase since 2000) • Increasing vehicle values (200% increase since 2000) • Higher lawsuit settlements and judgments • Growing complexity and expense of vehicle repairs (EVs, advanced safety systems)

Why states keep minimums low:

• 1. Affordability concerns: Higher minimums increase premiums, potentially pricing out low-income drivers
• 2. Political resistance: Voters and legislators resist mandates that raise costs
• 3. Lobbying: Insurance industry opposes mandates that could reduce profits
• 4. Inertia: Updating minimums requires legislative action, which is slow

Despite these reasons, low minimums shift financial risk from insurers to individual drivers—leaving you personally liable when accidents exceed policy limits.

States with No Insurance Requirement

Two states don't mandate car insurance:

1. New Hampshire • No insurance requirement • Must prove financial responsibility after accidents ($25,000 minimum) • Must carry insurance if at-fault in previous accident • 94% of NH drivers carry insurance despite no mandate

2. Virginia • Can pay $500 annual Uninsured Motor Vehicle (UMV) fee instead of insurance • UMV fee provides ZERO coverage—you're completely uninsured • You're personally liable for all damages you cause • Only 6% of VA drivers pay the fee; most choose insurance

Warning: Driving without insurance (even in NH or VA) is extremely risky. One accident can bankrupt you. Insurance is always the smarter choice.

For guidance on adequate coverage, read how much car insurance do I need.

Why Low Minimums Are Dangerous

Low state minimums create serious financial risks:

1. Personal liability for excess damages

When your coverage is exhausted, victims can: • Sue you personally for the difference • Garnish your wages (up to 25% of take-home pay) • Place liens on your home and property • Seize bank accounts and assets • Obtain judgments that follow you for years

Bankruptcy may not discharge personal injury judgments.

2. Underinsurance is widespread

In states with low minimums: • 30–40% of drivers carry only minimum coverage • If hit by a minimally insured driver, your damages may exceed their coverage • Uninsured/underinsured motorist coverage becomes essential

3. False sense of security

Meeting state minimums feels like adequate protection—but it's not. Many drivers don't realize they're personally liable for damages exceeding policy limits until after an accident.

4. Legal compliance ≠ financial protection

State minimums ensure legal compliance, not financial security. They represent the floor, not the ceiling.

Real-world consequences:

A driver in Arizona with 15/30/10 coverage causes a serious accident: • Injured driver: $150,000 in medical bills and lost wages • Vehicle damage: $40,000 • Total: $190,000

Insurance pays: $25,000 ($15,000 BI + $10,000 PD) Driver owes: $165,000

This leads to: • Lawsuit and judgment • 25% wage garnishment for years • Lien on home (if owned) • Damaged credit • Potential bankruptcy

For more on coverage needs, see our guide on liability car insurance.

Recommended Coverage Regardless of State Minimums

Every driver should carry at least 100/300/100 coverage:

• $100,000 bodily injury per person
• $300,000 bodily injury per accident
• $100,000 property damage per accident

Why 100/300/100?

• Covers most accidents without exposing personal assets
• Only costs $15–40/month more than state minimums
• Protects your home, savings, and future earnings
• Provides peace of mind

Consider higher limits if:

• You own a home or significant assets
• You have high income or retirement savings
• You drive in high-traffic areas
• You have teen drivers on your policy

Options include: • 250/500/100: Strong protection for homeowners • 500/500/100: Maximum coverage for high-net-worth individuals • Umbrella insurance: Adds $1–$5 million in liability protection (costs $200–$500/year)

Cost comparison (annual):

| Coverage | Average Premium | Protection Level | |----------|----------------|------------------| | 15/30/5 | $400–$700 | Minimal (high risk) | | 25/50/25 | $450–$800 | Meets many state minimums (still risky) | | 100/300/100 | $600–$1,000 | Adequate for most drivers | | 250/500/100 | $750–$1,200 | Strong protection | | 500/500/100 + Umbrella | $1,000–$1,500 | Excellent protection |

The $200–400/year difference between minimum and excellent coverage is negligible compared to potential lawsuit costs.

State-by-State Minimum Requirements Summary

Quick reference for all 50 states:

Lowest tier (15/30 or below): • Arizona: 15/30/10 • California: 15/30/5 • Louisiana: 15/30/25 • Pennsylvania: 15/30/5 • New Jersey: 15/30/5

Low tier (20/40): • Iowa: 20/40/15 • Hawaii: 20/40/10 • Massachusetts: 20/40/5

Standard tier (25/50/25): • 33 states including Florida, Texas, Ohio, Georgia, Illinois

Higher tier (30/60 or more): • Texas: 30/60/25 • Maryland: 30/60/15 • North Carolina: 30/60/25

Highest tier (50/100): • Alaska: 50/100/25 (highest in nation) • Maine: 50/100/25 • Michigan: 50/100/10

No requirement: • New Hampshire • Virginia (can pay $500 UMV fee)

For complete state-by-state details, see our comprehensive guide on minimum car insurance requirements by state.

How to Choose the Right Coverage

Match coverage to your financial situation:

Calculate your net worth: • Add: home equity, savings, investments, retirement accounts • Subtract: debts • Result: your net worth

Coverage rule of thumb: Carry liability limits that exceed your net worth by at least 50%.

Examples:

• Net worth $0–$50,000: 100/300/100 minimum
• Net worth $50,000–$200,000: 250/500/100
• Net worth $200,000+: 500/500/100 + umbrella policy

Additional considerations:

• High income: Future earnings can be garnished—carry higher limits
• Homeowners: Protect your home with 250/500/100 minimum
• Teen drivers: Higher accident risk—increase coverage
• Urban drivers: More traffic = higher accident risk

Balance cost and protection:

Upgrading coverage is surprisingly affordable: • 25/50/25 → 100/300/100: +$15–30/month • 100/300/100 → 250/500/100: +$10–20/month • Adding $1M umbrella: +$200–400/year

For tips on reducing costs, read how to lower car insurance.

Frequently Asked Questions