Driving Without Insurance: Penalties for Every State (2024) (2024)

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Car insurance is required in every state with the exception of Virginia and New Hampshire. In these states, the car insurance requirement can be waived if you are able to provide proof of financial responsibility. This means that you have enough assets to pay for a certain amount of damage should you be sued after a car accident that you cause.

Do I Need Insurance to Drive Someone Else’s Car?

Car insurance is tied to the vehicle, not the individual. This means that if you have permission to drive someone else’s car, that person’s insurance will cover any accident that may occur. If you live in the same household as the person whose car you borrow, you may need to be listed on that person’s insurance policy.

Do I Need Insurance for a Rental Car?

Most rental car companies provide the state minimum insurance with their rental vehicles. You are not required to purchase extra insurance, but it could be a good idea if you don’t already have coverage through your regular auto insurance policy (or another source like your credit card company).

State minimum requirements typically only include coverage for other parties’ damages after an accident you cause, not your own car. This means that you’ll be on the hook for repair or replacement costs for the rental if you don’t have extra insurance. Keep in mind that your personal auto policy still applies in most cases when you are driving a rental car.

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As with penalties for driving without insurance, car insurance requirements vary by state. Some require very little coverage, while others require more comprehensive policies.

The most common types of required insurance coverage are bodily injury liability, property damage liability, personal injury protection (PIP) and uninsured motorist coverage.

Liability car insurance limits are often written as a series of three numbers, which represent the limits for each type of coverage. For example, liability limits for car insurance in Texas may be written as 30/60/25. This means that the state requires drivers to hold at least:

• $30,000 in bodily injury liability coverage per person
• $60,000 in bodily injury liability coverage per accident
• $25,000 in property damage liability coverage per accident

If you want cheap car insurance, you may consider only purchasing your state’s minimum required coverage. However, keep in mind that if an accident you cause results in damage that exceeds these limits, you’ll have to pay the difference out of pocket. Also, liability insurance only covers other parties’ damaged property and medical bills. If you want coverage for your own vehicle, you’ll need to buy collision insurance.

Erie: Best Basic Insurance Coverage

Erie is one of the best-known insurers in the country, and for good reason. The company offers affordable basic insurance paired with high-quality customer service. Erie offers the six standard types of auto insurance, which include liability, collision, comprehensive, uninsured/underinsured motorist, medical payments and personal injury protection. Additionally, Erie offers the following add-on coverage options:

• Emergency roadside service
• Rental car reimbursem*nt
• Trip interruption
• New car replacement
• Accident forgiveness
• Rideshare insurance

Read more: Erie insurance reviews

USAA: Best for Military Members

USAA is another well-known provider. If you or a family member are apart of the military, this is the provider for you. While it doesn’t have quite the list of coverage options that Erie does, it is still a great and affordable choice for many drivers.

In addition to the standard types of auto insurance, USAA offers:

• Emergency roadside assistance
• Rental car reimbursem*nt
• Loan/lease payoff (also called gap insurance)
• Custom parts and equipment value coverage
• Rideshare insurance

Read more: USAA insurance reviews

Because consumers rely on us to provide objective and accurate information, we created a comprehensive rating system to formulate our rankings of the best car insurance companies. We collected data on dozens of auto insurance providers to grade the companies on a wide range of ranking factors. The end result was an overall rating for each provider, with the insurers that scored the most points topping the list.

Here are the factors our ratings take into account:

• Cost: Auto insurance rate estimates generated by Quadrant Information Services and discount opportunities were both taken into consideration.
• Coverage: Companies that offer a variety of choices for insurance coverage are more likely to meet consumer needs.
• Reputation and experience: Our research team considered market share, ratings from industry experts and years in business when giving this score.
• Availability: Auto insurance companies with greater state availability and few eligibility requirements scored highest in this category.
• Customer experience: This score is based on volume of complaints reported by the NAIC and customer satisfaction ratings reported by J.D. Power. We also considered the responsiveness, friendliness and helpfulness of each insurance company’s customer service team based on our own shopper analysis.

Our credentials:

• 800 hours researched
• 45 companies reviewed
• 8,500+ consumers surveyed

*Data accurate at time of publication.