There are only two states where car insurance is not mandatory: Virginia and New Hampshire. This is because each state sets its own limits and requirements for the minimums of car insurance a driver must carry when they have coverage. Even though Virginia and New Hampshire don’t require car insurance, most drivers purchase a policy anyway to protect them financially.
In this guide, we’ll explore the car insurance laws of Virginia and New Hampshire, as well as how to make the best choice for your plan if you live in either of these states. We’ll also explore the best car insurance providers that can meet your needs in states where car insurance is not mandatory, but beneficial nonetheless.
What States Don't Require Car Insurance?
There are only two states where car insurance is not mandatory for all drivers: Virginia and New Hampshire. In Virginia, an uninsured motor vehicle fee may be paid to the state, while in New Hampshire, vehicle owners have the option to post cash bonds. All other states have some form of car insurance requirements, typically liability or personal injury protection, depending on the related laws in the state.
Virginia And New Hampshire Car Insurance Requirements
In both states where car insurance is not mandatory, you must either get approved to waive requirements or pay a fee. Virginia and New Hampshire are both at-fault states, which means the person who causes the accident must prove financial responsibility up to a certain amount for the other driver’s injury and property damage costs.
|State||Fault State?||Insurance Alternative||Insurance Requirements|
|Virginia||Yes||$500 fee or proof of financial responsibility||25/50/20 liability|
|New Hampshire||Yes||Approval from DMV, self-insurance certificate, or deposit of bonds||25/50/25 liability, $10,000 MedPay, and uninsured motorist coverage equal to liability|
Car Insurance Laws In Virginia
Virginians have three choices: buy traditional car insurance, prove financial responsibility for an accident, or pay a $500 Uninsured Motor Vehicle Fee (UMF) to the Virginia DMV at the time of registration. This fee does not act as car insurance, it simply waives your requirements for purchasing minimum requirements from a provider. Drivers and owners must also renew the fee each time they renew their registration.
If you do choose to buy car insurance in Virginia, it must follow these minimums:
- $25,000 bodily injury liability insurance (BI) per person
- $50,000 bodily injury liability insurance per accident
- $20,000 property damage liability insurance (PD)
Drivers who choose to pay the $500 UMF are still financially responsible if they cause an accident. Because of this, they can also apply for a self-insurance certificate from the DMV or deposit funds from an executed surety bond. This option is ideal for someone with a large amount of cash who would prefer to forgo the car insurance process.
Car Insurance Laws In New Hampshire
Though the New Hampshire DMV strongly recommends purchasing car insurance, you can receive approval to waive insurance. There are a few groups of drivers that are commonly denied for this exemption, however. For example, you may be denied if you have a history of DUIs, have caused accidents while without car insurance in the last three years, or have certain traffic-related convictions.
New Hampshire is one of the states where car insurance is not mandatory, despite these exceptions. Even those who have been denied can contact the Bureau of Financial Responsibility to appeal their case after a certain amount of time.
If you buy car insurance in New Hampshire, you must follow these minimums:
- $25,000 BI per person
- $50,000 BI per accident
- $25,000 PD
- $1,000 in medical payments (MedPay)
- Uninsured motorist coverage equal to liability coverage
How To Show Proof Of Financial Responsibility
Virginia Financial Responsibility
The $500 fee is the cheapest way to get out of financial responsibility, but not the smartest if you cause an accident. Drivers can skip insurance and forgo the fee by proving financial responsibility in one of the three ways:
- Executed surety bond
- Cash or security deposit
- Self-insurance, which typically requires owning a high number of vehicles
New Hampshire Financial Responsibility
New Hampshire is a bit odd in that you do not need to technically prove responsibility to get your insurance waiver. You are, however, required to prove financial responsibility after an accident you cause. In this case, you would be liable for the minimum insurance requirements in the state. You can do this with the use of a surety bond or by depositing cash with the state. If you cannot meet these requirements, your license and registration can be suspended.
Pros And Cons Of Not Having Car Insurance
Though it may seem like states where car insurance is not mandatory save drivers money, one accident can balance out the costs of monthly premiums.
How much do you have to make to not have car insurance? Though there is no specific salary threshold, forgoing car insurance typically only makes sense for someone with a large savings. You must be able to prove that you can cover the costs of medical payments and property damages both for yourself and the other party in certain situations.
States That Allow Bonds In Place Of Car Insurance
Though the other 48 states require car insurance, there are a handful of places that allow you to purchase bonds in its place.
How do bonds work in this scenario? On a very basic level, a surety bond combines the concepts of insurance and bank loans. Let’s say you want to buy a $50,000 surety bond. Depending on your credit score, you will be asked to pay a down payment on the $50,000, usually anywhere from one to fifteen percent as a premium. If you suddenly need the full $50,000 – such as in the event of causing an accident – the bond provider pays the $50,000, and you are on the hook for paying the provider back.
The following states allow individuals to deposit funds or post bonds instead of car insurance:
*Drivers must still have liability insurance and uninsured motorist insurance unless waived.
Minimum Requirements In Other States
You’re likely to see similar breakdowns of liability auto insurance like the ones we mentioned for the states where car insurance is not mandatory. All other states require minimums for liability. This covers costs when you are at fault for an accident.
Other states may also require:
- Personal injury protection (PIP): Covers costs for your own medical bills and lost wages if you live in a no-fault state
- MedPay: Covers medical costs beyond what your health insurance covers
- Uninsured/underinsured Motorist (UM/UIM): Covers you when you are in an accident with another driver who does not carry liability insurance or does not carry enough insurance
Requirements vary depending on whether the state is in a traditional fault or no-fault state. No-fault states require each party to seek medical coverage from their own car insurance companies.
So, which state has the lowest auto insurance? In 2016, the Insurance Information Institute (III) found Idaho to be the least expensive state with an average annual expenditure of $599.77 for drivers.
Use the tool below or call (844) 246-8209 to collect and compare car insurance quotes from providers available in your state:
Is It Against The Law To Not Have Car Insurance?
No matter where you live, you must follow the procedures to either purchase – or in states where car insurance is not mandatory – waive your responsibility for car insurance. Not doing so comes with serious consequences. Unfortunately, many states still have large populations without car insurance, despite the laws.
What are the penalties for not following car insurance laws? As with the requirements, these vary by state. Common penalties include:
- Suspension of your license or registration
- Impounded vehicle
- Points on your license
- Jail time
- Court fees and reinstatement fees
Uninsured and underinsured motorist coverage may be a good bet if you live in a state with a large population of uninsured drivers. As we mentioned earlier, this will keep you safe if you live in an at-fault state and are in a car accident with someone who did not purchase the right amount of coverage.
Our Recommended Auto Insurance Companies
#1 State Farm: Best Overall
If you have a student driver in your house, State Farm auto insurance might be a good pick for you. The insurance company offers great discounts for student drivers and good driving behavior. It is also highly respected and ranked across the industry by major reviewers.
Along with the six standard types of car insurance, State Farm offers roadside assistance, car rental and travel expense coverage, and rideshare insurance.
#2 Geico: Best Discount Availability
Though Geico auto insurance is known for its catchy ads, it’s also a top choice for extensive coverage and good prices. As one of the largest agencies in the country, customers have access to mobile features and a variety of car insurance discounts.
After you’ve fulfilled your state’s minimum car insurance requirements, take a look at Geico’s extra types of coverage including roadside assistance, rental car reimbursement, and mechanical breakdown insurance.
Use the tool below or call (844) 246-8209 to compare quotes from Geico, State Farm, and other insurance providers:
In an effort to provide accurate and unbiased information to consumers, our expert review team collects data from dozens of auto insurance providers to formulate rankings of the best insurers. Companies receive a score in each of the following categories, as well as an overall weighted score out of 5.0 stars.
- Industry Standing: Insurers with strong financial ratings and customer-first business practices receive the highest scores in this category.
- Availability: We consider availability by state as well as exclusions for specific groups of drivers.
- Coverage: This rating is based on types of insurance available, maximum coverage limits, and add-on policies.
- Cost and Discounts: Our research team reviews auto insurance rate estimates generated by Quadrant Information Services for a variety of drivers in every state. Companies with lower prices and many car insurance discount opportunities receive the best scores.
- Customer Service: We comb through customer reviews and consumer feedback studies from experts like J.D. Power.
Technology: Auto insurers with mobile apps, advanced online services and telematics are more likely to meet consumer needs.