In the United States, the car insurance required by law almost always consists of liability coverage. This is not a single policy but a combination of two types: bodily injury liability and property damage liability. No state requires comprehensive or collision insurance; those are optional coverages for protecting your own vehicle. The specific minimum amounts you must carry vary significantly from state to state, and failing to meet your state's minimum can result in fines, license suspension, and even jail time.
The core purpose of mandatory liability insurance is to ensure that if you cause an accident, you have the financial means to cover the costs for others. Bodily injury liability pays for the medical expenses, lost wages, and pain and suffering of the people injured in the accident you caused. It's typically listed as two amounts (e.g., 25/50), meaning $25,000 per person and up to $50,000 per accident. Property damage liability covers the cost of repairing or replacing the other party's vehicle or any other property you damage, like a fence or building.
It's critical to understand that a handful of states, including Florida, Michigan, and New Jersey, operate as "no-fault" states. In these states, you are also required to carry Personal Injury Protection (PIP), which pays for your own and your passengers' medical expenses regardless of who caused the accident. This is designed to reduce lawsuits by having each driver's insurance cover their own injuries first.
While states set minimums, these amounts are often dangerously low. For example, in California, the minimum property damage liability is only $5,000. The average cost of a new car is well over $48,000, meaning a serious accident could leave you personally responsible for tens of thousands of dollars after your insurance maxes out. Most financial advisors strongly recommend carrying liability limits well above the state minimum, such as 100/300/100.
| State | Minimum Bodily Injury Liability (Per Person/Per Accident) | Minimum Property Damage Liability | Additional Required Coverage? |
|---|
| California | 15/30 | $5,000 | Uninsured Motorist (UM) |
| Texas | 30/60 | $25,000 | None |
| Florida | Not Required* | $10,000 | Personal Injury Protection (PIP) |
| New York | 25/50 | $10,000 | Personal Injury Protection (PIP), Uninsured Motorist |
| Ohio | 25/50 | $25,000 | None |
| Pennsylvania | 15/30 | $5,000 | Medical Benefits |
| Illinois | 25/50 | $20,000 | Uninsured Motorist (UM) |
| Michigan | 50/100 | $10,000 | Personal Injury Protection (PIP) |
| Georgia | 25/50 | $25,000 | None |
| Arizona | 25/50 | $15,000 | None |
*Florida is unique in that it does not mandate Bodily Injury Liability for all drivers, but it does require it for drivers who have been in certain serious violations or accidents.
