Do I need car insurance?

How to find out if you really need car insurance and what kind of coverage to consider.

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Whether you just got your license or recently bought a new car, you may be asking yourself whether you need car insurance. If you have a car and you drive it in the US, you need car insurance. But what kind of car insurance do you really need? And how much coverage can you get away with having?

Is car insurance required?

Yes, you need car insurance to legally drive a car in the US. Each state has different requirements, but you still need to have basic coverage. You typically won’t be able to get your driver’s license or buy a car without proof of insurance either.

The penalty for driving uninsured and getting caught is typically a fine of up to $1,000 and sometimes jailtime or a suspended license, especially for repeated offenses.

Why is car insurance required?

Say you got in a car crash without insurance. You’d need to pay for the damages to yourself and anyone else involved, including repairs to your car and paying medical bills.

Most people wouldn’t be able to quickly come up with that kind of cash. With insurance, you pay your insurer for the promise that any damage in a car accident will be taken care of. You’re trading off small monthly payments for larger, unexpected costs.

Does insurance follow the car or the driver?

Car insurance follows the car, not the driver, in most cases. Collision and comprehensive coverage protect your car no matter who’s driving it.

However, things gets a little sticky when you’re driving someone else’s car. Liability coverage typically follows the driver. So if you’re driving a rental car or a friend’s car, your own liability insurance covers you if you’re at fault for an accident.

That’s why you still need car insurance even if you drive someone else’s car.

What kind of car insurance do I need?

In every state except New Hampshire and Virginia, bodily injury liability and property damage liability are mandatory. Even in these states, you need to prove you can cover the costs of an accident with a form of financial responsibility, usually in the form of a large deposit to the state DMV.

Bodily injury liability insurance covers pedestrians, cyclists and passengers against medical costs from disability, injury, death. And this can also cover you against being sued into the ground after running someone over, injuring one of your passengers in an accident or similar.

If you accidentally damage property, like hitting a mailbox or crashing into a garage, it’s safe to assume that the owner of that house will be going after your wallet with a vengeance. With property damage liability insurance, your insurance company may take the hit in your place. It works the same for houses as it does for other road hazards like BMWs. Scratch the paint on one of those and it’s on you. You don’t want to know how much that stuff costs, and with property damage liability insurance, you might not have to find out.

About half of all US states also require uninsured driver coverage. This protects you if another driver is at fault in an accident and doesn’t have enough insurance to cover the damages to you and your vehicle.

What are the minimum requirements for my state?

More coverage isn’t mandatory – but it’s a pretty good idea

Other than bodily injury liability insurance, you technically don’t need car insurance. It’s perfectly legal to hit the road without any other coverage. But that doesn’t mean it’s a good idea to go without.

It’s safe to say you’ll want extra protection beyond what’s covered by liability. In car insurance, this is known as collision coverage. Unlike liability coverage, collision coverage pays for your property damage, even if you’re at fault in an accident.

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Do I still need extra insurance coverage even if I’m a safe driver?

Going beyond the bare minimum is still a good idea. Accidents can happen to anyone. Say you’re driving and you have a heart attack, are bitten by a spider or get rear-ended at a red light and crash into the car in front of you. You might still be found liable for resulting vehicle damage.

There’s also insurance fraud to worry about, or he-said-she-said situations. You’ve probably heard stories where a driver got into an accident and it’s entirely the other driver’s fault, but the other driver doesn’t just admit to everything and offer to pay for all the damage.

These are the types of situations that can end up with you in court. That’s one more case where liability insurance can help, since this coverage can help pay for legal costs on the way.

My liability insurance comes with lawyers?

Yes. The insurer doesn’t want to pay for it either, and proving that the other driver is at fault means they probably don’t have to. You and the insurer are on the same side here.

How do I decide what type of car insurance I need?

As a general rule, the less valuable your car is, the less coverage you need. If you’re driving a 30-year-old minivan with 200,000 miles, you might as well stick with liability-only coverage, since repairing it won’t cost a whole lot.

If you really can’t go without your car, like if you need it to drive to work, comprehensive car insurance or at least collision coverage might be worth it, just to help make sure you can get it repaired fast if needed.

If you drive a brand new vehicle or an expensive car, repair costs can be steep, and comprehensive coverage might be well worth it.

Ready to compare car insurance?

Name Product Roadside assistance New car protection Accident forgiveness Safe driver discount Available states
Progressive
Optional
30%
All 50 states
Progressive lets you instantly compare online quotes with multiple car insurers to see if Progressive really has the lowest rates for you.
The AARP Auto Insurance Program from The Hartford
Optional
Yes
All 50 states & DC
Enjoy exclusive savings and benefits designed for experienced drivers over the age of 49.
Gabi
Optional
Optional
55%
All 50 states
Upload your current bill and get 20+ quotes from top brands for the same level of coverage.
Clearcover
Optional
Yes
AZ, CA, IL, TX, UT
Find basic coverage and low rates through its easy online or app-based experience.
Metromile
Optional
49%
AZ, CA, IL, NJ, OR, PA, VA, WA
Pay-as-you-go rates based on how much and how well you drive start at $29/month plus pennies per mile.
Assurance
Optional
Yes
All states except AK & HI
Your broker is your one-stop shop for comparing any coverage you need.
Branch
Branch
Optional
No
AZ, MO
Get an online quote with just your name and address and find out if you could save by bundling home and auto insurance.
Root
52%
Available in 30 states
Safe, low-mileage drivers could save up to 52% by tracking their driving in the app.
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Bottom line

You do need car insurance in most states. While liability insurance and sometimes uninsured coverage are the only mandatory types of car insurance, adding additional coverage beyond the bare minimum could save you money and stress in the long run. Having to pay out of pocket for damaging someone else’s property is bad enough, not to mention the costs of repairing your own vehicle after an accident. Compare your options before deciding on a policy that’s best for you.

Frequently asked questions about car insurance

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