Car Insurance

Why you need car insurance

In the United States, each state decides what car insurance you must have. Most states require all drivers to carry a minimum of liability coverage, which pays for the damage you cause to other people. If you have a loan on your car, the lender normally also requires collision and comprehensive coverage.

New Hampshire is the best-known exception: according to its Department of Insurance, state laws don’t require you to have car insurance. But if you cause a crash, you must show you can pay for the damages under the state’s financial responsibility rules; if you can’t, they can suspend your driving privilege. If you decide to buy insurance in New Hampshire, the policy must include medical payments coverage (at least $1,000) and uninsured motorist coverage.

Types of coverage

• Bodily injury liability:pays for injuries you or the drivers on your policy cause to other people.
• Property damage liability:pays for damage you cause to others’ property, such as another car, a fence, or a building.
• Collision:pays for damage to your car when you crash into another vehicle or object, hit a pothole, or roll over. It’s optional and usually has a deductible.
• Comprehensive:pays for damage not caused by a crash, such as theft, vandalism, hail, flood, fire, or hitting an animal. It usually has a deductible too.
• Uninsured/underinsured motorist:protects you if you’re hit by someone without insurance, a hit-and-run driver, or someone whose insurance isn’t enough to cover your damages. Some states require it.
• Personal injury protection (PIP):pays medical expenses, lost wages, and other expenses for you and your passengers, regardless of who was at fault. It’s mandatory in no-fault insurance states.
• Medical payments (MedPay):covers medical and funeral expenses of covered people injured in a crash, regardless of fault.

According to the Insurance Information Institute, twelve states and Puerto Rico have no-fault insurance laws: Florida, Hawaii, Kansas, Kentucky, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Pennsylvania, and Utah. In those states, your own insurer pays for your injuries and your passengers’, no matter who caused the crash.

How to read the minimums

Liability limits are written with three numbers, in thousands of dollars. In Texas, for example, the Department of Insurance indicates the minimum is 30/60/25:

• 30:up to $30,000 for each person’s injuries.
• 60:up to $60,000 total for injuries in a single crash.
• 25:up to $25,000 for property damage.

Florida works differently: as a no-fault state, it requires at least $10,000 in PIP and $10,000 in property damage liability. The Texas Department of Insurance warns that minimums can fall short if you crash into several cars or destroy one, and that you can be sued for what exceeds your limits.

What you need to get a quote

• Your driver’s license and each person who’ll drive the car’s details.
• The vehicle’s details: year, make, model, and vehicle identification number (VIN).
• The address where you live and where the car is kept.
• Your driving and claims history, and your previous policy if you already had insurance.

Each insurer decides which licenses and IDs it accepts. If you have a license from another country or an international permit, or you use an ITIN instead of a Social Security number, ask each company or agent directly which documents they accept before requesting a quote.

Step by step to compare quotes

1. Check your state’s minimumCheck with your state’s department of insurance which coverages are mandatory and decide whether you want higher limits.
2. Ask for identical quotesRequest the same coverages, the same limits, and the same deductibles from several companies so the comparison is fair.
3. Choose your deductibleThe deductible is the part of the claim you pay. For example, with $1,500 in damage and a $500 deductible, the insurer pays you $1,000. A higher deductible usually lowers the premium but means paying more if you have a claim.
4. Ask about discountsEach company sets its own. They can include airbags, anti-lock brakes or an anti-theft system, defensive driving courses, several cars on the same policy, other policies with the same company, and a good driving record.
5. Read the declarations pageThe policy’s first page summarizes your coverages, limits, and deductibles. Verify it matches what you were quoted.

What to do after a crash

1. Call the policeif needed; do it if there are injuriesor if the other driver fled. Without a police report, uninsured motorist coverage may not pay for a hit-and-run.
2. Exchange informationNote the other driver’s name, address, phone, license plate, and insurance details, and take a photo of their insurance card.
3. Document the sceneTake photos and note the time, place, weather, and road condition. Ask witnesses for their contact details.
4. Notify your insurer promptlyMost companies have deadlines for reporting.

What happens if you drive without insurance

Consequences vary by state. In Florida, for example, if your insurance is canceled or lapses, they can suspend your license and registration for up to three years and charge you a reinstatement fee of up to $500, with no hardship license for work. Also, if you cause a crash without insurance, you could have to pay all damages out of pocket.

Where to file a complaint

First try to resolve the issue with your insurer and keep a record of every call, email, and letter. If it isn’t resolved, file a complaint with your state’s department of insurance: it can investigate, for free, unjustified delays or denials of claims and cancellations without cause, and the insurer can’t retaliate against you for complaining. The NAIC has a directory with each state department’s contact info. Keep in mind the department doesn’t decide who was at fault in a crash.

Frequently asked questions

Official sources

• NAIC: what does auto insurance cover?
• NAIC: How do I file a complaint against my insurance company?
• NAIC: Directory of state insurance departments
• Texas Department of Insurance: Auto insurance guide
• New Hampshire Insurance Department: auto insurance guide
• Florida FLHSMV: Florida Insurance Requirements
• III: What is covered by a basic auto insurance policy?
• III: Background on no-fault auto insurance

Reviewed on October 14, 2026.