What states don't require liability insurance?

Avoid "fly-by-night" ultra-budget insurers, carriers with persistent consumer complaint trends regarding delayed payouts, and stripped-down policy coverages that leave you financially exposed.

Companies and Categories to Avoid

• Fly-by-Night Budget Insurers: Companies like Fred Loya, BlueFire, and Mendota often feature very low upfront prices. However, personal injury attorneys and consumer reports note they frequently suffer from understaffed claims departments, poor communication, and automatic policy cancellations or lapses.
• Carriers with High Complaint Volumes: Major firms like Allstate and Liberty Mutual frequently appear at the bottom of consumer satisfaction indexes and draw criticism from legal professionals for utilizing aggressive claims-adjustment software or low settlement offers.
• Insurers Flagged for Slow Processing: National General, Safeco, and Farmers also surface in consumer data and regional studies for lower customer trust and slower payout communication.

Coverages to Avoid (or Reconsider)

• State-Minimum Liability Only: Choosing the absolute lowest legal limits saves money upfront but leaves you personally responsible if you cause a serious crash with expensive medical bills or property damage.
• Skipping Uninsured/Underinsured Motorist (UM/UIM) Coverage: Skipping this protection means you have no recourse for medical or repair costs if an at-fault driver has no insurance.
• High Collision Deductibles on Low-Value Cars: If your car is worth less than $3,000 to $5,000, paying for collision or comprehensive coverage often costs more than the vehicle is worth.

According to recent data from automotive studies (such as ConsumerAffairs and Insurance.com), the three most expensive states to own a car are Delaware, Mississippi, and Florida (or Louisiana and Nevada, depending on the specific weighting of insurance, gas, and repair costs).

Top Expensive States and Why

• Delaware: Ranks near or at the top with average annual costs around $5,492, heavily driven by high gas expenses from extensive yearly mileage and high insurance premiums.
• Mississippi: High costs are driven by massive average mileage and high repair costs relative to the state's median household income.
• Florida / Louisiana / Nevada: These states frequently trade spots in the top three or four due to some of the highest auto insurance premiums in the country, expensive repair costs, and steep fuel prices.

Vermont frequently ranks as the cheapest state for full-coverage car insurance, while states like Wyoming and New Hampshire offer the lowest rates for liability-only coverage.

Top Cheapest States for Car Insurance

• Vermont: Averages around $1,237 to $1,660 per year for full coverage, benefiting from low population density and less traffic congestion.
• Wyoming: Offers some of the lowest minimum liability rates, averaging around $50 per month for basic coverage.
• New Hampshire: Averages about $52 a month for liability-only coverage. It is also famously the only state that does not legally mandate car insurance, though drivers must prove financial responsibility.
• Idaho: Routinely ranks in the top five, with full coverage averaging roughly $1,339 per year.
• Maine & Ohio: Both feature average annual full-coverage rates well under the national average, driven by rural roads and lower claim frequencies.

Why Rates Vary by State

• Population Density: Rural states have fewer cars on the road, which reduces the frequency of collisions and claims.
• Coverage Requirements: States with lower minimum mandatory liability limits naturally feature cheaper baseline state-minimum policies.
• Regulations: Some states strictly regulate or approve insurance rate increases, helping keep average costs low.

You can check out detailed breakdowns and source data on Insurify or read more via U.S. News.

New Hampshire is the only U.S. state that does not legally require drivers to carry car insurance.

New Hampshire Financial Rules

• No insurance mandate: Drivers do not have to buy a standard auto policy.
• Financial responsibility: You must prove you can pay for damages if you cause a crash.
• Proof of funds: You can deposit cash or securities with the state treasurer, usually equal to or greater than traditional liability limits ($50,000 to $100,000).
• Personal liability: Uninsured drivers must pay out of pocket for any injuries or property damage they cause.
• License suspension: The state suspends your driving privileges if you cause an accident and cannot pay for the damages.

Mississippi has the highest rate of uninsured drivers in the United States, with approximately 28.2% of its motorists driving without car insurance.

Top States with Uninsured Drivers

Recent data from the National Association of Insurance Commissioners (NAIC) and industry studies highlight the highest percentages of uninsured motorists:

• Mississippi: 28.2%
• New Mexico: ~24.9%
• Washington, D.C.: ~24.0%
• Tennessee: ~20% or higher
• Michigan: ~20% or higher

Why Rates Are Rising

• Affordability: Rising vehicle repair costs and inflation have driven up insurance premiums, making coverage harder to afford.
• Poverty and Cost of Living: High poverty rates and expensive housing in certain regions stretch household budgets, forcing some drivers to drop coverage.