Why is car insurance required?
By requiring car insurance in almost every state, U.S. car insurance laws help financially protect individuals in the event they cause or are involved in an accident. These laws attempt to ensure that every driver has insurance to cover a minimum level of costs for injuries and property damage they're responsible for.
Explore Progressive Answers' auto editorial guidelines to find out why you can trust the car insurance information you find here.
Is car insurance mandatory in all states?
Forty-nine states and the District of Columbia require drivers to carry some level of liability coverage to get behind the wheel.
New Hampshire doesn't require the average driver to carry insurance, although it does have minimum requirements for those who choose to purchase insurance. If you don't carry car insurance in New Hampshire, you're still required by law to show proof of financial responsibility if you're liable for someone's injuries or damaged property in an auto accident. Note that if you've had prior vehicle-related infractions, New Hampshire may require you to carry auto insurance.
Individual states regulate the type and amount of car insurance required. Generally, those requirements include auto liability coverage for bodily injury and property damage. Liability coverage may pay for the property damage and injuries you cause to others due to an auto accident. Learn more about car insurance requirements by state.
Because each state sets different rules for car insurance, other types of car insurance coverage requirements may include:
Why is it illegal to drive without insurance?
Lawmakers in most states have made it illegal to drive without insurance to protect constituents from the high costs of covering medical expenses or property damage. These laws also serve as a deterrent. If you're caught driving without insurance, penalties can be severe, including steep fines, having your driver's license revoked, and jail time.
Why is car insurance important?
Car insurance is important because it's required by law and it protects you financially. Car insurance may prevent you from paying out-of-pocket expenses in the following scenarios:
You're at fault in an accident
If you're at fault in an accident, your auto liability insurance may help pay for the medical expenses and property damage of the other people involved in the accident.
Your car is damaged in an event out of your control
If your vehicle suffers damage from fire, theft, vandalism, or hitting an animal, comprehensive auto coverage may help pay for repair costs.
You collide with another object or vehicle
If you hit a tree, utility pole, guard rail, or another vehicle, collision coverage may help pay for your vehicle's repair costs, regardless of who is at fault.
You're in an accident with an uninsured or underinsured motorist
If you're hit by a driver who is determined to be at fault and has no insurance or insufficient coverage, uninsured/underinsured motorist coverage may pay for injuries to you and your passengers as well as the damage to your vehicle. In some states, this coverage is required.
Other scenarios in which car insurance could be important include when your car breaks down, when you need a rental car after an accident, or if you've added custom parts or equipment coverage to your car.
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