Liability insurance is the only type your state legally requires

Every state except New Hampshire requires you to carry liability insurance on any car you drive on public roads. Liability covers damage or injuries you cause to someone else — their car, their medical bills, their property. It does not cover your own vehicle or your own injuries.

The specific dollar amounts vary by state. Most states set minimum limits somewhere between $15,000 and $30,000 per person for bodily injury, and $30,000 to $100,000 per accident. Your state's Department of Motor Vehicles or insurance commissioner publishes the exact minimums that apply where you live. If you carry less than your state's minimum and cause an accident, you can be fined, lose your license, or face a lawsuit for the difference.

New Hampshire is the only exception: it does not require liability insurance, but you must prove you can pay for damages if you cause an accident — either through insurance, a bond, or a deposit with the state.

Key Takeaways

  • Liability insurance is mandatory in all states except New Hampshire, and covers damage or injuries you cause to other people or their property.
  • Your state sets minimum dollar limits for liability coverage, and carrying less than the minimum can result in fines, license suspension, or legal judgments against you.
  • Collision and comprehensive insurance are not legally required in most states, but your lender will require them if you have a car loan or lease.
  • Uninsured motorist coverage is mandatory in some states and protects you if someone without insurance hits you.
  • You can look up your state's exact minimum requirements on your state's Department of Motor Vehicles website or by calling your insurance agent.

What liability insurance actually covers and does not cover

Liability has two parts: bodily injury liability and property damage liability. Bodily injury pays for medical treatment, lost wages, and pain and suffering if you injure or kill someone in an accident you caused. Property damage pays to repair or replace their vehicle or other property.

Liability does not pay for your own injuries, your own vehicle damage, or medical bills for your passengers. It also does not cover intentional damage, criminal acts, or damage from hitting an animal (that falls under comprehensive coverage, which is optional in most states). If you cause an accident and your liability limits are too low to cover the full damage, the injured party can sue you personally for the rest.

When your lender requires additional coverage

If you financed your car with a loan or lease, your lender will require you to carry collision and comprehensive insurance in addition to liability. Collision covers damage to your own car from hitting another vehicle or object. Comprehensive covers theft, weather, vandalism, and hitting an animal.

Your lender requires these because they own the car until you pay off the loan — they want to protect their investment. You can drop collision and comprehensive once you own the car outright, though many drivers keep them anyway. The cost of these coverages depends on your car's age and value, your deductible, and your driving history.

Uninsured and underinsured motorist coverage requirements

Many states require uninsured motorist coverage, which protects you if someone without insurance hits you. Some states make it optional but require you to actively decline it in writing. A few states do not require it at all. Underinsured motorist coverage is similar but applies when the at-fault driver has insurance that is not enough to cover your damages.

The rules vary significantly by state. Some states set minimum uninsured motorist limits that match your liability limits. Others let you choose. A few states allow you to waive it entirely. Check your state's requirements or ask your insurance agent whether you have this coverage and whether it is mandatory where you live.

How to find your state's specific requirements

Your state's Department of Motor Vehicles website lists the minimum liability limits you must carry. You can also call your state's insurance commissioner's office or any licensed insurance agent — they can tell you the exact amounts and which other coverages are required in your state.

When you buy or renew a policy, your insurance company will show you the state minimums and ask whether you want to carry more. Carrying higher limits costs more but protects you better if you cause a serious accident. Many insurance agents recommend carrying at least $100,000 in bodily injury liability and $100,000 in property damage liability, even if your state's minimum is lower.

What happens if you drive without the required coverage

Driving without your state's minimum liability insurance is illegal. If you are pulled over or involved in an accident, you can face fines ranging from a few hundred to several thousand dollars depending on your state. Your license can be suspended or revoked, and you may be required to file an SR-22 form (a certificate of financial responsibility) with your state for several years before you can drive legally again.

If you cause an accident without insurance, you are personally liable for all damages. The injured party can sue you and garnish your wages or place a lien on your home or other assets. This financial exposure is why liability insurance is mandatory — it protects both you and the people you might injure.

Frequently Asked Questions

Does my state require me to carry proof of insurance in my car?

Most states require you to carry proof of insurance — your insurance card or policy documents — and show it to police if you are pulled over. Some states allow digital proof on your phone. Check your state's DMV website or ask your insurance agent what counts as proof in your state.

Can I get a car loan or lease without liability insurance?

No. You must have liability insurance before you drive a financed car off the lot. Your lender will also require collision and comprehensive coverage. You typically cannot even get a loan approval without proof that you will carry these coverages.

What if I only drive occasionally or keep my car parked most of the time?

If your car is registered and you have a license to drive it, you must carry the minimum liability insurance required by your state, even if you rarely drive. Some insurers offer low-mileage or occasional-use discounts if you drive fewer than a certain number of miles per year.

Do I need insurance if I only drive on private property?

No. State insurance requirements apply only to driving on public roads. If you drive only on private property you own or have permission to use, you do not need state-mandated insurance. However, your property owner's insurance may require you to carry it anyway.

What is an SR-22 and when do I need one?

An SR-22 is a certificate your insurance company files with your state to prove you are carrying the required coverage. You typically need one after a serious violation like driving without insurance, a DUI, or multiple accidents. It is not extra insurance — your regular policy includes it — but it costs a filing fee and you must maintain continuous coverage for the period your state requires.