Minimum Coverage Auto Insurance Explained
Last Updated on January 24, 2022
Many budget-minded Americans looking to save some money often opt to purchase only the minimum required auto insurance coverage. Minimum coverage auto insurance refers to a policy that meets the minimum requirements set forth by your local state government – and nothing more.
Each state has unique laws regarding the amount of coverage you need and the types of insurance you need. While some states, like New Hampshire, don’t require liability coverage at all, other states, like Michigan, require drivers to purchase liability coverage and also purchase unlimited personal injury protection coverage. Therefore, while one state’s minimum coverage auto insurance will be very affordable, another state’s minimum coverage will be quite costly.
Since minimum limits and required coverage differ by state, it’s essential to ensure you are getting the right amount of coverage no matter where you live. Below, we outline the minimum amount of insurance coverage required in each state, so that if you want minimum coverage auto insurance, you’ll know how much you need to purchase.
Table of Contents:
- Different Types of Auto insurance Required
- Minimum Insurance Requirements by State
- Exceptions to State Minimum Insurance
- How Much Does Minimum Coverage Cost?
- Is Minimum Coverage Insurance Enough?
Different Types of Auto Insurance Required
There are a few different auto insurance types that might be required where you live. Let’s go over them below.
Liability Coverage – Liability coverage helps pay for damage you cause to another driver. Whatever damage you are deemed to be at-fault for, or liable for, will be covered by liability coverage – up to your policy’s limits. Liability coverage is required in all states except for New Hampshire, and in some cases, Virginia. Liability coverage consists of three components: bodily injury coverage per person, bodily injury coverage per accident, and property damage coverage per accident.
Bodily Injury Coverage (BIL) Per Person – This coverage pays for the medical bills, up to a certain amount, for a single person injured in an accident in which you are at-fault.
Bodily Injury Coverage (BIL) Per Accident – This coverage pays for the medical bills, up to a certain amount, for every person injured in an accident in which you are at-fault.
Property Damage Coverage (PDL) Per Accident – This coverage pays for all of the property damage, up to a certain amount, for an accident in which you are at-fault.
Uninsured/Underinsured Motorist Coverage (UM/UIM) – UM/UIM protects you in an accident involving drivers without insurance, drivers without enough insurance, and hit-and-run drivers. UM/UIM is required in just about half of all states. Just like liability coverage has BIL and PDL, UM/UIM has uninsured motorist bodily injury insurance (UMBI) and uninsured motorist property damage insurance (UMPD).
Personal Injury Protection Coverage (PIP) – PIP pays for yourself and your passengers’ medical expenses if you are injured in an accident. It can also pay for lost wages, rehabilitation costs, therapy, and other costs related to injuries from an accident. PIP pays regardless of fault. Only a handful of states require PIP. The states that do require PIP tend to be “no-fault” states. No-fault states are closely associated with PIP because, in these states, you pay for your injuries and damages no matter who is at fault.
Medical Payments Coverage (MedPay) – MedPay, like PIP, also pays for your medical expenses if you are injured in an accident. MedPay and PIP’s difference is that while PIP will pay for other costs like lost wages and rehab, MedPay only pays for medical bills. MedPay is required in just two states – Maine and Pennsylvania. If you do not live in one of these two states and already have a comprehensive health insurance plan, you can probably go without MedPay.
Property Protection Insurance (PPI) – PPI is a type of car insurance coverage currently only required in Michigan. It pays for damage you do to another person’s vehicle or property. This can include roadside objects such as buildings, mailboxes, streetlights, and fences. Currently, Michigan requires up to $1,000,000 in coverage to help repair the damage you cause within the state.
Minimum Insurance Requirements by State
Now that you are familiar with the coverage types required, let’s take a look at your state’s minimum limits.
| State | Minimum Requirements |
|---|---|
| Alabama | $25,000 BIL per person $50,000 BIL per accident $25,000 PDL per accident |
| Alaska | $50,000 BIL per person $100,000 BIL per accident $25,000 PDL per accident |
| Arizona | $15,000 BIL per person $30,000 BIL per accident $10,000 PDL per accident |
| Arkansas | $25,000 BIL per person $50,000 BIL per accident $25,000 PDL per accident |
| California | $15,000 BIL per person $30,000 BIL per accident $5,000 PDL per accident |
| Colorado | $25,000 BIL per person $50,000 BIL per accident $15,000 PDL per accident |
| Connecticut | $25,000 BIL per person $50,000 BIL per accident $25,000 PDL per accident $25,000 UM/UIM per person $50,000 UM/UIM per accident |
| Delaware | $25,000 BIL per person $50,000 BIL per accident $10,000 PDL per accident $15,000 PIP per person $30,000 PIP per accident |
| Florida | $10,000 PDL per accident $10,000 PIP |
| Georgia | $25,000 BIL per person $50,000 BIL per accident $25,000 PDL per accident |
| Hawaii | $20,000 BIL per person $40,000 BIL per accident $10,000 PDL per accident $10,000 PIP |
| Idaho | $25,000 BIL per person $50,000 BIL per accident $15,000 PDL per accident |
| Illinois | $25,000 BIL per person $50,000 BIL per accident $20,000 PDL per accident $25,000 UM per person $50,000 UM coverage per accident |
| Indiana | $25,000 BIL per person $50,000 BIL per accident $25,000 PDL per accident |
| Iowa | $20,000 BIL per person $40,000 BIL per accident $15,000 PDL per accident |
| Kansas | $25,000 BIL per person $50,000 BIL per accident $25,000 PDL per accident $25,000 UM/UIM per person $50,000 UM/UIM per accident $4,500 PIP |
| Kentucky | $25,000 BIL per person $50,000 BIL per accident $25,000 PDL per accident $10,000 personal injury protection |
| Louisiana | $15,000 BIL per person $30,000 BIL per accident $25,000 PDL per accident |
| Maine | $50,000 BIL per person $100,000 BIL per accident $25,000 PDL per accident $50,000 UM/UIM per person $100,000 UM/UIM per accident $2,000 MedPay |
| Maryland | $30,000 BIL per person $60,000 BIL per accident $15,000 PDL per accident $30,000 UM/UIM per person $60,000 UM/UIM per accident $15,000 UMPD coverage per accident |
| Massachusetts | $20,000 BIL per person $40,000 BIL per accident $5,000 PDL per accident $20,000 UM/UIM per person 40,000 UM/UIM per accident $8,000 PIP |
| Michigan | $20,000 BIL per person $40,000 BIL per accident $10,000 PDL per accident outside Michigan $1,000,0000 property protection insurance (PPI) within Michigan Unlimited PIP |
| Minnesota | $30,000 BIL per person $60,000 BIL per accident $10,000 PDL per accident $25,000 UM/UIM per person $50,000 UM/UIM per accident $40,000 personal injury protection |
| Mississippi | $25,000 BIL per person $50,000 BIL per accident $25,000 PDL per accident |
| Missouri | $25,000 BIL per person $50,000 BIL per accident $25,000 PDL per accident $25,000 UM coverage per person $50,000 UM coverage per accident |
| Montana | $25,000 BIL per person $50,000 BIL per accident $20,000 PDL per accident |
| Nebraska | $25,000 BIL per person $50,000 BIL per accident $25,000 PDL per accident $25,000 UM/UIM per person $50,000 UM/UIM per accident |
| Nevada | $25,000 BIL per person $50,000 BIL per accident $20,000 PDL per accident |
| New Hampshire | If you choose to purchase auto insurance, which is optional, the limits are: $25,000 BIL per person $50,000 BIL per accident $25,000 PDL per accident $25,000 UM/UIM per person $50,000 UM/UIM per accident $25,000 UMPD $1,000 MedPay |
| New Jersey | $5,000 PDL per accident $15,000 PIP |
| New Mexico | $25,000 BIL per person $50,000 BIL per accident $10,000 PDL per accident |
| New York | $25,000 BIL per person $50,000 BIL per accident $50,000 death liability per person $100,000 death liability per accident $10,000 PDL per accident $25,000 UMBI per person $50,000 UMBI per accident $50,000 PIP |
| North Carolina | $30,000 BIL per person $60,000 BIL per accident $25,000 PDL per accident $30,000 UM per person $60,000 UM per accident $25,000 UMPD per accident |
| North Dakota | $25,000 BIL per person $50,000 BIL per accident $25,000 PDL per accident $25,000 UM/UIM per person $50,000 UM/UIM per accident $30,000 PIP |
| Ohio | $25,000 BIL per person $50,000 BIL per accident $25,000 PDL per accident |
| Oklahoma | $25,000 BIL per person $50,000 BIL per accident $25,000 PDL per accident |
| Oregon | $25,000 BIL per person $50,000 BIL per accident $20,000 PDL per accident $25,000 UM per person $50,000 UM per accident $15,000 PIP |
| Pennsylvania | $15,000 BIL per person $30,000 BIL per accident $5,000 PDL per accident $5,000 MedPay |
| Rhode Island | $25,000 BIL per person $50,000 BIL per accident $25,000 PDL per accident |
| South Carolina | $25,000 BIL per person $50,000 BIL per accident $25,000 PDL per accident $25,000 UM per person $50,000 UM per accident $25,000 UMPD |
| South Dakota | $25,000 BIL per person $50,000 BIL per accident $25,000 PDL per accident $25,000 UM/UIM per person $50,000 UM/UIM per accident |
| Tennessee | $25,000 BIL per person $50,000 BIL per accident $15,000 PDL per accident |
| Texas | $30,000 BIL per person $60,000 BIL per accident $25,000 PDL per accident |
| Utah | $25,000 BIL per person $65,000 BIL per accident $15,000 PDL per accident $3,000 PIP |
| Vermont | $25,000 BIL per person $50,000 BIL per accident $10,000 PDL per accident $50,000 UM/UIM per person $100,000 UM/UIM per accident $10,000 UMPD per accident |
| Virginia | $25,000 BIL per person $50,000 BIL per accident $20,000 PDL per accident $25,000 UM/UIM per person $50,000 UM/UIM per accident $20,000 UMPD per accident |
| Washington | $25,000 BIL per person $50,000 BIL per accident $10,000 PDL per accident |
| Washington, D.C. | $25,000 BIL per person $50,000 BIL per accident $10,000 PDL per accident $25,000 UM per person $50,000 UM per accident $5,000 UMPD per accident |
| West Virginia | $25,000 BIL per person $50,000 BIL per accident $25,000 PDL per accident $25,000 UM per person $50,000 UM per accident $25,000 UMPD coverage |
| Wisconsin | $25,000 BIL per person $50,000 BIL per accident $10,000 PDL per accident $25,000 UM per person $50,000 UM per accident |
| Wyoming | $25,000 BIL per person $50,000 BIL per accident $20,000 PDL per accident |
Exceptions to State Minimum Insurance
As mentioned above, there are a few ways to get out of buying the minimum auto insurance coverage in your state. Let’s go over them:
New Hampshire Residents – New Hampshire residents, with one exception, are not required to purchase auto insurance coverage. The exception is high-risk drivers who have been convicted of severe motor-vehicle crimes such as driving under the influence. These drivers still have to purchase auto insurance. All other drivers do not have to. If you are an NH resident and still want to buy insurance coverage, you can. The minimum requirements for NH car insurance policies are $25,000 BIL per person, $50,000 BIL per accident, $25,000 PDL per accident, $25,000 UM/UIM per person, $50,000 UM/UIM per accident, $25,000 UMPD, and $1,000 MedPay.
Virginia Residents – In Virginia, drivers with a clean record can register as an uninsured driver. This registration requires a $500 uninsured motorist fee. The fee does not replace auto insurance coverage; it merely allows the driver to drive without insurance for a 12-month period. Virginia drivers also have the option of taking out a $50,000 surety bond with the state to avoid buying insurance coverage.
Proof of Financial Responsibility – Some states, like Virginia and Arizona, allow drivers to take out a surety bond or prove financial responsibility instead of buying insurance. The payment amount, which usually ranges from $25,000 to $100,000, needs to be deposited at your state’s motor vehicle department. Other means of proving financial responsibility include keeping real estate bonds with the state and keeping a government bond with the state.
How Much Does Minimum Coverage Cost?
The following chart shows the average premium cost for a six-month minimum-coverage policy from a few major insurance companies. These rates are for policies that meet the state minimums only. They do not include any additional policy add-ons such as comprehensive coverage or collision coverage.
| Insurer | Premium Rates |
|---|---|
| Allstate | $400 |
| Farmers | $310 |
| GEICO | $240 |
| Liberty Mutual | $320 |
| Nationwide | $350 |
| Progressive | $340 |
| State Farm | $260 |
| USAA | $200 |
Please note that these rates are simply an average. Depending on your state’s requirements, your rates for minimum coverage may be higher or lower.
Is Minimum Coverage Insurance Enough?
While minimum coverage is certainly the cheapest legal option for auto insurance, it might not offer enough coverage. Car repair costs are increasing each year and state governments haven’t been able to keep their laws up-to-date. Therefore, you should simply use the state’s requirements as a guideline to know what the absolute lowest amount legally required is. You should not necessarily buy that amount.
If you get into an expensive accident and only have minimum coverage, you might be on the hook to pay for the damage out-of-pocket. If you do not have enough money to pay for the damages, you could actually be sued and forced to sell off your assets to pay the bills.
To present an example of how minimum coverage might not be enough, let’s take a look at the minimum requirements in Pennsylvania, which requires at least $15,000 in bodily injury liability coverage per accident.
Let’s say you are driving down the street in Pennsylvania and hit another driver head-on. You are ruled at fault because you ran a stoplight. The driver requires extensive surgeries and an ICU stay. His medical bills top $400,000. If you purchased only $15,000 in BIL, you will be forced to pay over $385,000 out-of-pocket. If like most people, you cannot afford this bill, you will most likely be sued and have your assets (house, car, etc.) seized.
To prevent an unfortunate situation like this, the simple solution is to carry more coverage than your state requires. If you are not comfortable holding only the state minimums, please talk to your insurance agent to see how much he or she recommends. All reputable insurance agents in your state have coverage recommendations that will equip you with adequate protection.
Final Word on Minimum Coverage Auto Insurance
Minimum coverage auto insurance allows you to drive on your state’s roadways legally. State limits vary by state. States like New Hampshire and Virginia give residents the option to drive without insurance. States like Michigan and New York have stringent requirements that cause insurance there to be very expensive.
Minimum coverage auto insurance is often bare-bones, basic coverage. It does not provide the comprehensive protection that a full coverage policy would. Nonetheless, some drivers like to purchase a minimum coverage policy because they are confident they won’t get into an accident or they simply want to save some money.
If you are interested in a minimum coverage auto insurance policy and would like to compare quotes, please return to the top of this page and enter your zip code to begin. Our quote comparison tool will connect you to the cheapest auto insurance providers in your area.
