Compulsory Auto/Uninsured Motorists

Compulsory Auto/Uninsured Motorists

JULY 2014


  • Auto liability insurance is compulsory in the District of Columbia and all states except New Hampshire.

  • The percentage of uninsured motorists nationwide was 13.8 percent in 2009, the latest year available.

  • The uninsured motorist problem varies greatly from state to state. In 2009 Mississippi had the highest uninsured motorist ratio, 28 percent, and Massachusetts had the lowest, 4.5 percent.

  • State insurance departments and insurance companies are using new techniques to combat the uninsured motorist problem, including using electronic means to verify auto insurance quickly.



Virtually all states require drivers to have auto liability insurance before they can legally drive a motor vehicle. (Liability insurance pays the other driver’s medical, vehicle repair and other costs when the policyholder is at fault in an accident.) State laws set the minimum amounts of insurance or other financial security that drivers must pay for the harm caused by their negligence if an accident occurs. The public generally supports compulsory auto insurance and wants these laws enforced.

Liability insurance is compulsory in 49 states and the District of Columbia. New Hampshire, the only state that does not have a compulsory insurance liability law, requires that drivers be able to demonstrate that they are able to provide sufficient funds in the event of an “at-fault” accident. Motorcycle insurance is compulsory in every state with the exception of four: Hawaii, Montana, New Hampshire, and Washington.

Laws in most states have proven ineffective in reducing the number of drivers who are uninsured. There are many reasons for this. Some drivers cannot afford insurance and some drivers with surcharges for accidents or serious traffic violations do not want to pay the high premiums that result from a poor driving record. With the estimated percentage of uninsured drivers in the United States close to 14 percent, it is costly to track down violators of compulsory insurance laws.


  • Electronic Insurance Verification: Insurer verification laws mandate that all insurance companies in a state submit the entire list of their policyholders to an outside vendor or a state agency, which matches them to motor vehicle registrations. (See Background, Computer Databases.) In Mississippi, where the system was scheduled to be operational in 2013, the department of insurance has not yet selected a data contractor and its implementation date is pending. West Virginia’s system was expected to be fully operational in January 2014, and Utah began a two-year web services pilot program in early 2013.
  • The Texas online insurance verification system, TexasSure, posted data showing that as of March 3, 2014, 13.28 percent of all vehicles in the state were uninsured, compared with 14.21 percent on March 4, 2013. (See Computer Databases below.)
  • Electronic Proof of Insurance Coverage: According to the Property Casualty Insurers Association of America (PCI) reports, as of June 2014 about 40 states had approved laws, known as e-card laws, allowing motorists to use smartphones to show proof of insurance coverage electronically, instead of using traditional paper insurance cards. Electronic proof of insurance saves insurers the cost of printing and mailing ID cards to policyholders.
  • Electronic Delivery: According to PCI reports, as of June 2014 about 20 states allow electronic delivery of insurance documents and notices. These laws are known as E-Commerce laws.
  • Website Access: Access to insurance policies online could aid people who are evacuated or suffer a loss following a natural catastrophe, as well as allow policyholders to review their policies at any time using smartphones or tablets. Sixty-six percent of auto, homeowners and renters policyholders responding to a May 2014 poll conducted by the Insurance Information Institute said they would like to view all policies available to them on a single website.
  • By the end of 2013, 13 states (Alaska, Arizona, Florida, Illinois, Kansas, Michigan, Minnesota, Missouri, Oklahoma, Pennsylvania, Texas, Virginia and Wisconsin) had approved laws that will allow policyholders to access their insurance policies through a website, according to PCI.
  • Uninsured Motorists: The percentage of uninsured motorists declined nationally from 14.9 percent in 2003 to 13.8 percent in 2007, according to Insurance Research Council (IRC) estimates reported in its 2011 study. The percentage rose to 14.3 percent in 2008, but fell back to 13.8 percent in 2009. The IRC measures the number of uninsured motorists based on insurance claims, using a ratio of insurance claims made by people who were injured by uninsured drivers relative to the claims made by people who were injured by insured drivers. The study found that, as in the past, the uninsured motorist problem varies greatly from state to state. At the extremes, Mississippi had the highest uninsured motorist ratio, at 28 percent, and Massachusetts had the lowest, at 4.5 percent.
  • In its 2008 report, the IRC documented a strong historical correlation between the national unemployment rate and the uninsured motorist rate. In the 2011 study, the IRC notes that the strength of this historical relationship has diminished.
  • Minimum Financial Responsibility Limits: In August 2013 a bill was approved in Illinois that raises the minimum financial responsibility limits for auto insurance policies from 20/40/15 to 25/50/20, effective January 1, 2015. The first number refers to bodily injury (BI) liability limits for one person injured in an accident (limited to $25,000), the second number refers to BI liability limits for all persons injured in an accident and the third number to property damage (PD) liability.
  • Undocumented Immigrants Drivers Licenses: In California a law that will allow undocumented immigrants who are state residents to obtain a drivers license after they have passed driving exams will become effective on January 1, 2015. (See Background, Undocumented Immigrants Drivers Licenses.)



State Insurance required (1) Minimum liability limits (2) Insurer verification of insurance (3)
AL BI & PD Liab 25/50/25 c, d
AK BI & PD Liab 50/100/25 a
AZ BI & PD Liab 15/30/10 a, b
AR BI & PD Liab, PIP 25/50/25 b, d
CA BI & PD Liab 15/30/5 (4) a, b, d
CO BI & PD Liab 25/50/15 a, d
CT BI & PD Liab 20/40/10 a
DE BI & PD Liab, PIP 15/30/10 a, b, c, d
DC BI & PD Liab, UM 25/50/10 a, c, d
FL PD Liab, PIP 10/20/10 (5) a, d
GA BI & PD Liab 25/50/25 a, d
HI BI & PD Liab, PIP 20/40/10 a
ID BI & PD Liab 25/50/15 none
IL BI & PD Liab, UM 20/40/15* a, b, c
IN BI & PD Liab 25/50/10 a
IA BI & PD Liab 20/40/15 a
KS BI & PD Liab, PIP, UM,UIM 25/50/10 a,c
KY BI & PD Liab, PIP 25/50/10 (5) a, d
LA BI & PD Liab 15/30/25 a, d
ME BI & PD Liab, UM, UIM  50/100/25 (6) b
MD BI & PD Liab, PIP (7), UM, UIM 30/60/15 a
MA BI & PD Liab, PIP, UM, UIM 20/40/5 a, d
MI BI & PD Liab, PIP 20/40/10 a
MN BI & PD Liab, PIP, UM, UIM 30/60/10 a, c
MS BI & PD Liab 25/50/25 a, d
MO BI & PD Liab, UM 25/50/10 a, c, d
MT BI & PD Liab 25/50/10 d
NE BI & PD Liab, UM, UIM 25/50/25 a, b, d
NV BI & PD Liab 15/30/10 a, d
NH FR only, UM 25/50/25 (6) a
NJ BI & PD Liab, PIP, UM, UIM 15/30/5 (8) a, d
NM BI & PD Liab 25/50/10 a, c
NY BI & PD Liab, PIP, UM 25/50/10 (9) a, d
NC BI & PD Liab, UM, UIM (10) 30/60/25 a, d
ND BI & PD Liab, PIP, UM, UIM 25/50/25 c
OH BI & PD Liab 25/50/25 a, c
OK BI & PD Liab 25/50/25 a, c, d
OR BI & PD Liab, PIP, UM, UIM 25/50/20 a, c
PA BI & PD Liab, PIP 15/30/5 a
RI BI & PD Liab 25/50/25 (5) d**
SC BI & PD Liab, UM 25/50/25 a, d
SD BI & PD Liab, UM, UIM 25/50/25 a
TN BI & PD Liab 25/50/15 (5) a, d
TX BI & PD Liab 30/60/25 a, d
UT BI & PD Liab, PIP 25/65/15 (5) d
VT BI & PD Liab, UM, UIM 25/50/10 c
VA BI & PD Liab (11), UM, UIM 25/50/20 a, b, c, d
WA BI & PD Liab 25/50/10 a
WV BI & PD Liab, UM 25/40/10 a, d
WI BI & PD Liab, UM, UIM 25/50/10 a
WY BI & PD Liab 25/50/20 c, d

(1) Compulsory Coverages:
      BI Liab=Bodily injury liability
      PD Liab=Property damage liability
      UM=Uninsured motorist
      PD=Physical damage
      Med=First party (policyholder) medical expenses
      UIM=Underinsured motorist
      PIP=Personal Injury Protection. Mandatory in no-fault states. Includes medical, rehabilitation, loss of earnings and funeral expenses. In some states PIP includes essential services such as child care.
      FR=Financial responsibility only. Insurance not compulsory.
(2) The first two numbers refer to bodily injury liability limits and the third number to property liability. For example, 20/40/10 means coverage up to $40,000 for all persons injured in an accident, subject to a limit of $20,000 for one individual, and $10,000 coverage for property damage.
(3) a. Insurer must notify Department of Motor Vehicles or other state agency of cancellation or nonrenewal.
      b. Insurer must verify financial responsibility or insurance after an accident or arrest.
      c.Insurer must verify randomly selected insurance policies upon request.
      d. Insurers must submit entire list of insurance in effect, which may be compared with registrations at a state agency. Also known as a computer data law. Also includes cases where insurers are required to report new issues and/or renewals.
(4) Low-cost policy limits for low-income drivers in the California Automobile Assigned Risk Plan are 10/20/3.
(5) Instead of policy limits, policyholders can satisfy the requirement with a combined single limit policy. Amounts vary by state.
(6) In addition, policyholders must also carry at least $2,000 for medical payments.
(7) May be waived for the policyholder but is compulsory for passengers.
(8) Basic policy (optional) limits are 10/10/5. Uninsured and underinsured motorist coverage not available under the basic policy but uninsured motorist coverage is required under the standard policy.
(9) In addition, policyholders must have 50/100 for wrongful death coverage.
(10) Mandatory in policies with UM limits exceeding 30/60.
(11) Compulsory to buy insurance or pay an Uninsured Motorists Vehicle (UMV) fee to the state Department of Motor Vehicles.

*Effective January 1, 2015, Illinois’ limits will rise to 25/50/20.
**Companies will begin submitting monthly records to the Department of Insurance on November 7, 2014

Source: Property Casualty Insurers Association of America; state departments of insurance and motor vehicles.


The chart above provides a state-by-state overview of minimum auto liability limits and the insurance required by state law. Coverages that may be rejected by the policyholder, either in writing or verbally (i.e., are not mandatory) have been excluded.

States may also require motorists to have physical proof of valid insurance, which is usually a card issued by the insurer. They may also require motorists to provide evidence of insurance in certain situations. For example, all but about a dozen states require motorists to have valid evidence of insurance in their vehicles at all times and to produce it when stopped by law enforcers. About the same number of states require motorists to produce evidence of insurance when they are involved in a crash or shortly afterward. About half of the states require evidence of insurance when a vehicle is registered.

Increasingly, laws are being passed that expand the role of the insurer in verifying compliance with compulsory liability laws and aiding in their enforcement. Insurance companies often work in conjunction with state motor vehicle departments to verify insurance coverage. Most states have laws that specify that insurers must notify the motor vehicle department when a policy is cancelled or not renewed. In some states, insurers are asked to verify the existence of insurance at the time that a specific accident occurred. In other states, insurers are given lists of randomly selected auto registrations, which they are asked to match up with insurance policies that the motorists claim were in effect. Newer laws, known as computer data laws, require an insurer to submit its entire list of automobile liability policies, updated at specified intervals, to a state agency such as the motor vehicle department. The state agency can use the lists to verify registration applicants' declarations that insurance is in effect. (See also Background: Computer Databases.)

Penalties for driving without compulsory insurance include fines, which can be as high as $5,000 for a subsequent offense, to license or registration suspension or revocation. Some states can impose jail time, confiscate license plates and impound vehicles.


Undocumented Immigrant Drivers Licenses: Proponents in favor of granting undocumented immigrants drivers licenses say that the requirement would promote safety and responsibility by ensuring drivers have passed a driving exam and have insurance, as is generally required for licenses, and would ensure that more complete data is available to officials checking drivers license data bases for information on an individual driver, such as place of residence or driving record. Opponents say the licenses create a security risk by potentially providing illegal immigrants with ease of access to secure buildings and other privileges.

As of April 2014 at least eight states and the District of Columbia had laws granting driving privileges to undocumented drivers. Washington and New Mexico allow undocumented immigrants to obtain drivers licenses, while Utah allows undocumented immigrants to obtain learners permits. Nevada issues Driver Authorization Cards instead of licenses. Illinois’ law allows undocumented immigrants who have resided in the state for over a year to obtain a temporary drivers license. Provisions in the law would make the license invalid if the driver cannot show proof of insurance if stopped by a law enforcement officer. Maryland’s law allows for a “second tier” drivers license for applicants who cannot prove lawful status if the applicant has filed a Maryland tax return or is claimed as a dependent by a person who has filed a tax return in the state. These licenses will expire on July 1, 2015. In Vermont the Department of Motor Vehicles issues operator and junior operator privilege cards and learners privilege cards to applicants who cannot establish lawful presence or otherwise fail to satisfy identity requirements, if they can furnish reliable proof of address, among other requirements. Oregon’s law has been contested and will be decided as a referendum in November 2014.

Laws granting driving privileges to undocumented immigrants will go into effect in August 2014 in Colorado and Puerto Rico. In California, where a law goes into effect on January 1, 2015, applicants must be able to prove their identity, be state residents and pass driving exams. The licenses will be marked with a special notice stating that it is not an official identification document and cannot be used for any other purpose. Connecticut’s law also goes into effect on January 1, 2015.

Tennessee has reportedly repealed its program, citing fraud problems, and the governor of New Mexico has said she will work to do the same (see research below.)

The North Carolina Division of Motor Vehicles said that on March 25 it would begin to issue specially marked drivers licenses to undocumented immigrants who were brought to the United States as children. The licenses are a response to the federal Deferred Actions for Childhood Arrivals Act, which provides a pathway to citizenship for these individuals. An attorney with the National Immigration Law Center said that about 40 states and the District of Columbia plan to issue similar licenses.

Researchers from New Mexico State University and Duquesne University found that New Mexico’s law allowing undocumented immigrants to drive has failed to cause a significant change in the percentage of uninsured motorists in the state. When New Mexico began issuing drivers licenses to undocumented immigrants in 2003, 26.3 percent of drivers were uninsured. In 2008 the ratio increased to 29.5 percent before dropping back to 25.7 percent in 2009. The report, Examining the Impact of Issuing Driver’s Licenses to Undocumented Immigrants and Other Socioeconomic Factors on the Percentage of Uninsured Motorists, is based on data from the Insurance Research Council. It appeared in the Journal of Insurance Regulation in 2011.



State Uninsured Rank (2) State Uninsured Rank (2)
Alabama 21.8% 5 Montana 11.4% 25
Alaska 13.0 21 Nebraska 7.8 38
Arizona 11.9 23 Nevada 13.2 20
Arkansas 16.0 11 New Hampshire 10.9 27
California 15.0 15 New Jersey 11.2 26
Colorado 15.2 14 New Mexico 25.7 2
Connecticut 9.5 33 New York 5.4 41
Delaware 10.8 28 North Carolina 13.5 19
D.C. 15.3 13 North Dakota 9.1 34
Florida (3) 23.5 4 Ohio 15.7 12
Georgia 15.7 12 Oklahoma 23.9 3
Hawaii 11.2 26 Oregon 10.4 30
Idaho 7.9 37 Pennsylvania 6.6 40
Illinois 14.9 16 Rhode Island 17.6 8
Indiana 16.3 9 South Carolina 10.7 29
Iowa 11.5 24 South Dakota 8.6 35
Kansas 9.8 32 Tennessee 23.9 3
Kentucky 17.8 7 Texas 14.9 16
Louisiana 12.9 22 Utah 8.2 36
Maine 4.5 42 Vermont 7.1 39
Maryland 14.9 16 Virginia 10.8 28
Massachusetts 4.5 42 Washington 16.1 10
Michigan 19.5 6 West Virginia 10.8 28
Minnesota 13.0 21 Wisconsin 14.6 17
Mississippi 28.0 1 Wyoming 10.3 31
Missouri 13.7 18      

(1) Percentage of uninsured drivers, as measured by the ratio of uninsured motorists (UM) claims to bodily injury (BI) claims frequencies.
(2) Rank calculated from unrounded data.
(3) In Florida, compulsory auto laws apply to personal injury protection (PIP) and physical damage, but not to third party bodily injury coverage.

Source: Insurance Research Council.

View Archived Tables




Year Percent
1990 15.4%
1991 15.1
1992 15.6
1993 16.0
1994 15.1
1995 14.2
1996 13.8
1997 13.2
1998 13.0
1999 12.7
2000 13.4
2001 14.2
2002 14.5
2003 14.9
2004 14.6
2005 14.5
2006 14.3
2007 13.8
2008 14.3
2009 13.8

(1) Percentage of uninsured drivers, as measured by the ratio of uninsured motorists (UM) claims to bodily injury (BI) claims frequencies.

Source: Insurance Research Council.

View Archived Tables




Rank Highest Percent uninsured Rank Lowest Percent uninsured
1 Mississippi 28.0% 1 Massachusetts 4.5%
2 New Mexico 25.7 2 Maine 4.5
3 Tennessee 23.9 3 New York 5.4
4 Oklahoma 23.9 4 Pennsylvania 6.6
5 Florida 23.5 5 Vermont 7.1
6 Alabama 21.8 6 Nebraska 7.8
7 Michigan 19.5 7 Idaho 7.9
8 Kentucky 17.8 8 Utah 8.2
9 Rhode Island 17.6 9 South Dakota 8.6
10 Indiana 16.3 10 North Dakota 9.1

(1) Percentage of uninsured drivers, as measured by the ratio of uninsured motorists (UM) claims to bodily injury (BI) claims frequencies.

Source: Insurance Research Council.

View Archived Tables



Allstate. Auto Insurance State Coverage Map. Includes information on required limits and common limits, by state.

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