Virginia and New Hampshire are the two states with unique car insurance laws.

 

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.

Each state sets its own limits and requirements for car insurance. Even if a state doesn’t require car insurance, most drivers purchase a policy anyway, and all states dictate the bare minimums of car insurance a driver must carry when they have coverage. In this guide, we’ll explore car insurance laws in 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 top car insurance providers that can meet your needs in states where car insurance is not mandatory, but beneficial nonetheless.

Use the tool below to start getting quotes for car insurance. Because rates can vary based on your age, vehicle, driving history, and more, we always recommend getting at least three quotes. For an easier experience, you can also call our team at (855) 518-0148.

 
 

In this article:

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

In states where car insurance is not mandatory, drivers are required to prove 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.

Pro

Con

No administrative efforts

Very high costs if you cause an accident

Save money over time if you are not in an accident

Difficult to travel between states with differing insurance laws

Avoid changing car insurance rates or unexpected costs

Risk of losing license and registration if unable to pay for damages

Fee (in Virginia) that does not go toward accident costs

Difficult to travel between states with differing insurance laws

 

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:

Alabama

Louisiana

New Mexico

Tennessee

Arizona

Maine

New York

Texas

California

Maryland*

North Carolina

Utah

Colorado

Massachusetts

Ohio

Vermont

Delaware

Mississippi

Oklahoma

Virginia

Idaho

Missouri

Rhode Island

Washington

Indiana

Montana

South Carolina

Wisconsin

Iowa

Nebraska

South Dakota

Wyoming

 

*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 (855) 518-0148 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
  • Fines
  • 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.

Top Auto Insurance Companies

Even if you live in one of the states where car insurance is not mandatory – or you choose to go the car insurance bond route – you may find that car insurance plans are your best best for staying financially stable in the long run.

In our recent study of over 30 companies across the nation, several providers stood out above the rest. We recommend getting auto insurance quotes from a few providers to ensure you get the best rates.

 

Geico: Best Overall

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.

State Farm: Best For Students

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.

Use the tool below or call (855) 518-0148 to compare quotes from Geico, State Farm, and other insurance providers:

 
 

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