When money’s a little tight, it’s tempting to look for ways to cut corners to save cash. If you own a car, you may have considered canceling your insurance to do just that.
However, it’s generally illegal to drive without insurance. In most states, drivers need to meet minimum liability insurance requirements to be considered legally insured.
Uninsured and underinsured drivers who don’t meet state requirements will be in legal and financial trouble if they get into an accident or get pulled over. Keep reading to learn who requires auto insurance and why you can’t drive without it.
Why Is Car Insurance Required?
The main reason you can’t drive without insurance is due to your liability, or your responsibility, to pay for any damage you cause with your vehicle.
While you can carry additional insurance for your car, most states have liability coverage limits in place to ensure you can pay for the other driver if you’re in an accident.
Which States Require Liability Auto Insurance?
While all states have minimum financial responsibility requirements, Forty-eight out of fifty states have minimum liability insurance laws.
If you don’t meet these insurance requirements, it’s illegal to operate your vehicle. There are different types of state-mandated insurance, including:
- Bodily injury liability insurance covers the other driver’s medical bills if you get into an accident and cause bodily injury or death. Depending on where you live, the other driver might be able to sue you for things like medical expenses, lost wages, or funerals. In this case, liability insurance will cover your legal fees.
- Property damage liability insurance covers any damage you cause to someone else’s property while driving. This includes damage to cars, fences, lampposts, signage, and anything else you can hit.
- Uninsured/underinsured motorist insurance covers you if you get into an accident with a driver who has insufficient insurance. Uninsured/Underinsured motorist insurance will pay the difference between what you receive from the other driver’s insurance and what you’re owed in damages.
- Personal injury protection insurance covers you and your passenger’s medical bills should you get into an accident and require hospitalization.
If you’re curious about insurance in your state, visit our state list to learn about local insurance laws.
Which States Do Not Require Liability Auto Insurance?
Virginia and New Hampshire are the only two states that haven’t made auto insurance mandatory. However, both states have financial responsibility laws—you need to prove you have enough assets to pay for damages if you get into an accident to legally forego insurance.