Is car insurance a legal requirement in USA?
Asked by: Ramona Nader | Last update: December 9, 2025Score: 5/5 (10 votes)
Is it illegal to not have car insurance in the USA?
Driving without insurance is against the law in virtually every U.S. state. The consequences of driving without insurance can vary dramatically, with penalties ranging from a slap on the wrist to large fines and even jail time.
Is insurance a legal requirement in the US?
Car insurance is required by law in all states, except in New Hampshire and Virginia. In New Hampshire, drivers are only required to show proof of their financial capability to cover for injuries and damages for accidents that they cause.
What states legally require car insurance?
Auto liability insurance is mandatory in 49 states and the District of Columbia. New Hampshire, the only state that does not require auto liability insurance, requires drivers to show that they are able to provide sufficient funds in the case of an at-fault accident (i.e., financial responsibility).
Do I need car insurance in the US?
In the USA, car insurance is typically mandatory in almost all states, with drivers required to carry a minimum level of coverage.
What are the minimum car insurance requirements in the USA?
Is car insurance a federal law?
Yes, federal law requires all drivers to have car insurance so the interests of pedestrians and other motorists are protected in a crash. Most states have laws that mandate car insurance as well, with each state establishing its own required coverage amounts and penalties for failure to have insurance.
Which US state does not require car insurance?
Almost every state in the U.S. requires drivers to have some form of car insurance. The only state that doesn't require car insurance is New Hampshire. Instead, drivers must prove they have enough funds to cover any costs if they cause an accident.
What state can you drive without car insurance?
New Hampshire is the only state that doesn't mandate car insurance. However, drivers who choose not to buy car insurance must prove they have sufficient funds to meet the state's financial responsibility requirements (PDF) in the event they cause an accident.
Why is car insurance mandatory?
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.
Is it illegal to have out of state car insurance?
In general, your car must be registered and insured in the same state, since both vehicle registration and auto insurance are based on your permanent residence.
Is insurance mandatory for USA?
Travel insurance is not mandatory if you are travelling to the USA. It is completely optional. But, travel insurance is compulsory mostly for Schengen countries. Even though it may not be mandatory, a travel insurance plan for the USA is highly recommended.
When did insurance become mandatory in the US?
Auto insurance became mandatory in the United States starting in the 1920s. Massachusetts was the first state to mandate auto insurance in 1925, followed by other states. Today, auto insurance is mandatory in 48 states since 1970.
Do you actually need car insurance?
Having car insurance is required by law in most states. If you are at fault in a car accident, the auto liability coverage required on your car insurance policy helps pay for covered losses, such as the other party's medical bills and damage to their vehicle or other property that results from the accident.
Why are we forced to have car insurance?
Since your vehicle has the potential to cause physical or material harm, you need to carry enough insurance to cover the costs of these damages. To legally register and drive your vehicle, you need to maintain at least your state's minimum level of liability insurance.
Is insurance mandatory in USA?
Key Takeaways
Health insurance coverage is no longer mandatory at the federal level, as of Jan. 1, 2019. Some states still require you to have health insurance coverage to avoid a tax penalty.
Is there a penalty for no insurance in the US?
The fee for not having health insurance (sometimes called the "Shared Responsibility Payment" or "mandate”) ended in 2018. This means you no longer pay a tax penalty for not having health coverage. If you don't have health coverage, you don't need an exemption to avoid paying a tax penalty.
Do I need car insurance in the USA?
Most states require a motor vehicle owner to carry some minimum level of liability insurance. States that do not require the vehicle owner to carry car insurance include New Hampshire and Mississippi, which offers vehicle owners the option to post cash bonds (see below).
How much is a ticket for no insurance in Texas?
Costs Associated With a No Insurance Ticket
First, you will receive a ticket for no insurance, along with a fine of $175-$350, supposing it's your first offense. Subsequent offenses could entail fines of $350-$1,000 for each infraction.
Why is it bad not to have car insurance?
Putting aside a situation where you get into an accident and have to pay out of pocket for repairs and medical bills (yours or others involved), driving uninsured also carries steep fines and a loss of your license. You also may be surprised by how affordable car insurance can be.
Which US states do not require car insurance?
Although leasing or financing offices may require one or the other. New Hampshire and Virginia are the only states that do not require auto insurance. However, if you choose not to purchase car insurance in these states, you would still be held liable for any property damage or bodily injury caused by their vehicle.
How long can you go without car insurance?
It is a crime to drive almost anywhere without car insurance coverage, even for a minute or just down the street. So, how long can you be without car insurance? If you're driving, you can't. Anytime you get behind the wheel as a licensed driver, you need insurance coverage or you'll risk incurring major consequences.
Is it illegal to not have car insurance in the US?
Cons. In every state except New Hampshire, not having insurance is illegal. You could face fines, penalties, license suspensions or revocations, and/or registration suspension and revocations.
Can the color of your car affect your insurance premium?
Does car color affect insurance rates? The color of your car doesn't affect your insurance rate. Instead, your insurance company uses other information, like your car's age, location, usage, and your driving record, to help determine insurance rates.
How do insurance companies make money?
Most insurance companies generate revenue in two ways: Charging premiums in exchange for insurance coverage and then reinvesting those premiums into interest-generating assets. Insurers also diversify risk by pooling the risk from customers and redistributing it across a larger portfolio.