Minimum car insurance requirements
Most states require you have car insurance and have laws that outline the minimum level of coverage you must buy.
Auto insurance minimums
|District of Columbia||25/50/10|
Property Casualty Insurers Association of America. Used with permission. Requirements shown as of September 2011.
However, the minimum limits your state requires may not necessarily be adequate. A car accident can cost far more than the limits mandated by most states. The Insurance Information Institute recommends you carry at least $100,000 of bodily injury protection per person and $300,000 per accident (known as 100/300).
What is no-fault car insurance?
If your state has a "no-fault" auto insurance law, your policy must pay medical bills for you and your passengers regardless of who caused the accident. No-fault laws are intended to keep insurance fraud down.
How to read auto insurance liability limits
Here's how to read the following table of auto insurance liability minimums.
- First number: Bodily injury liability maximum for one person injured in an accident.
- Second number: Bodily injury liability maximum for all injuries in one accident.
- Third number: Property damage liability maximum for one accident.
For example, if you live in New York, the minimum liability limits are $25,000 for injury liability for one person, $50,000 for all injuries and $10,000 for property damage in an accident. Plus, New York requires you to have personal injury protection (PIP) and uninsured motorist coverage (UM).
No-fault auto insurance states
Source: Insurance Information Institute. *Puerto Rico is a U.S. territory.
Deciphering auto insurance liability across state lines
If you hold the minimum automobile insurance required in your state and are involved in an accident in another state that requires higher minimum coverages or other coverage (such as personal injury protection), your policy will automatically increase to meet that state's minimum coverage requirements.
For example, if you're a Connecticut driver (where minimum liability coverage is $20,000 of bodily injury protection per person, $40,000 of bodily injury protection per accident and $10,000 of property damage per accident, or 20/40/10, as it's often called) and are involved in an accident in New York (which requires 25/50/10 of liability coverage), your insurance will automatically extend to meet New York's requirements. This boost can be helpful, especially when you cause a large amount of property damage.
Some states restrict the ability of their citizens to sue one another for pain and suffering after a car accident. Puerto Rico (a U.S. territory) and 12 states have "no-fault" laws. These laws mean that your car insurance must pay for bodily injury damages no matter who's at fault in an accident. However, these same states allow their citizens to litigate against folks from other states after a car accident.
For example, you are limited in your ability to sue for damages if you live in Pennsylvania. When buying your auto coverage you have two choices of liability: "full tort" or "limited tort." If you choose "limited tort," you will pay less in premiums but you won't be able to sue another Pennsylvanian for pain and suffering unless you're seriously injured and your medical bills exceed a specified minimum amount. What constitutes a serious injury is outlined in your car insurance policy. If you choose full tort, your premiums will be more but you will be able to sue no matter the amount of your damages.
Throw out the rulebook if someone from another state crashes into you. Even if you have Pennsylvania "limited tort," you'll be able seek compensation for pain and suffering in the court system if someone from outside Pennsylvania crashes into you.