What States Don’t Require Car Insurance?

Key Points:

• Virginia and New Hampshire provide alternatives to carrying minimum car insurance limits.
• Even in Virginia and New Hampshire, there are penalties for causing an accident without insurance.
• It’s often cheaper to get minimum coverage than it is to risk driving without insurance.

There are only two states that don’t require car insurance: Virginia and New Hampshire. All states set their minimum coverage requirements, and this includes Virginia and New Hampshire. The difference is, these two states give an alternative for drivers without insurance. 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 still beneficial.

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What States Don’t Require Car Insurance?

Virginia and New Hampshire are the only two states that don’t require car insurance coverage. 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 or hold savings accounts to cover liability limits. All other states have some form of car insurance requirements such as liability or personal injury protection, depending on the related laws in the state.

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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.

Car Insurance Laws In Virginia

While Virginia doesn’t technically require car insurance, Virginians have two choices: buy traditional car insurance or pay a $500 Uninsured Motor Vehicle Fee (UMV) to the Virginia DMV at the time of registration (and annually thereafter). 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:

• $30,000 bodily injury liability insurance (BI) per person
• $60,000 bodily injury liability insurance per accident
• $20,000 property damage liability insurance (PD)

What Happens If You Cause an Accident Without Insurance In Virginia?

Drivers who choose to pay the $500 UMV are still financially responsible if they cause an accident. In fact, the driver who isn’t at fault can report the at-fault driver to the DMV for not having insurance and also file a lawsuit to get compensation for the accident.

If you didn’t pay the UMV fee and don’t have insurance, things get worse. Your license and registration will be suspended. You’ll need to pay a $600 non-compliance fee and possibly a reinstatement fee. You’ll also have to file an SR-22 with the state for the next three years, which requires you to have insurance. And that insurance will be more expensive because of the suspension and SR-22.

Is Paying The UMV Fee Worth It In Virginia?

You might think $500 per year sounds cheap and that it might be worth paying the UMV fee instead of getting insurance. However, our data shows minimum liability coverage costs about $643 per year and just $54 per month on average in Virginia. 

With just $143 more, you won’t be paying much over the UMV fee and will get legitimate car insurance. Even if it costs you a bit more, having insurance is more valuable than paying a $500 fee that doesn’t provide anything.

Car Insurance Laws In New Hampshire

Though the New Hampshire DMV strongly recommends purchasing car insurance, you can receive approval to waive insurance by providing cash or securities in the liability amounts. You can also technically drive without doing either of these–provided you have enough finances to cover liability limits. If you cause an accident, you’ll have to pay for the other party’s medical bills and repairs. If you can’t, you can be sued and lose your license.

There are a few groups of drivers that are commonly denied 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 bodily injury liability insurance per person
• $50,000 bodily injury liability insurance per accident
• $25,000 property damage liability insurance (PD)
• $1,000 in medical payments coverage (MedPay)
• Uninsured motorist coverage equal to liability coverage

What Happens If You Cause An Accident Without Insurance In New Hampshire?

While New Hampshire is one of the states that doesn’t require car insurance, you’re not off the hook. If you cause an accident, you’re responsible for covering the damage and medical bills of the other party. If you can’t cover the costs, you may be on the receiving end of a lawsuit.

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What You Need In States That Don’t Require Car Insurance

You need to prove financial responsibility in both states that don’t require car insurance.

Virginia Financial Responsibility

The $500 UMV fee is the only way for most drivers to forego car insurance in Virginia. As we mentioned above, you may be able to find actual coverage around that price. If you own multiple commercial vehicles, you may be able to get surety bonds or self-insure your vehicles.

New Hampshire Financial Responsibility

In New Hampshire, you need to provide proof of financial responsibility that meets the minimum insurance requirements in the state. In other words, you need at least $75,000 in an account to cover up to $50,000 of bodily injury liability per accident and $25,000 of property damage liability. You can do this with the use of securities or by depositing cash with the state. If you cannot meet these requirements, your license and registration can be suspended.

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Pros And Cons Of Not Having Car Insurance

Though it may seem like drivers can save money in states that don’t require car insurance, 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 large savings. You must be able to prove that you can cover the costs of medical payments and property damages for the other party.

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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. In other words, you can have self-insured car insurance.

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 anywhere from one to 15 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.

With a bond option, you’re still responsible for covering the cost of any damage you cause, but the bond provider puts some of the money up first. Again, this isn’t a viable option unless you have significant cash resources.

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What Car Insurance Do Other States Require?

How much car insurance you need depends on your state’s requirements. 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 minimum amounts of 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.

Check insurance information with your DMV to see the liability limits and other types of coverage required.

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, what state insurance is the cheapest? On average, in Wyoming, drivers will pay extremely low rates of $333 per year for minimum limits. Drivers in Vermont enjoy the cheapest rates for full-coverage insurance and pay $993 per year. Our cost data is based on a 30-year-old single male with a clean driving history and good credit.

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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.

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States That Don’t Require Car Insurance: Our Take

The only two states that don’t require car insurance are Virginia and New Hampshire. However, all drivers are held financially responsible for damages they cause, whether they have a car insurance policy or not. Our advice is to avoid driving without an auto insurance policy in any state. Even if you don’t drive your car, a lapse of coverage will make you pay higher rates in the future.

Our Recommended Auto Insurance Companies

There are dozens of insurance companies on the market, and another provider may offer you more affordable rates than your current one. We recommend comparing free quotes from at least three companies to find the cheapest option.

State Farm: Best Overall Provider

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.

Read more in our State Farm insurance review.

Geico: Best For Basic Coverage

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.

Read more in our Geico insurance review.

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States Where Car Insurance Isn’t Required: FAQ

Below are some frequently asked questions about which states don’t require car insurance.

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How We Rate Auto Insurers

Our review team extensively researches auto insurance providers to deliver informed and unbiased assessments of leading companies. We evaluate several key rating factors that are important to consumers to determine which providers are the best in the industry:

• Reliability: It’s important that an auto insurer is able to meet its claims obligations. Companies with a strong financial strength rating from AM Best score best in this category. Established insurers with a long history of reliable service also receive positive marks.
• Availability: Insurance companies that offer wider availability to consumers in terms of state availability and few eligibility requirements are more likely to meet consumer needs.
• Coverage: To determine our coverage score, we look at the number of coverage options available as well as coverage limits and deductible options. Our ratings also take into account additional services and benefits like roadside assistance.
• Pricing: Cost can be difficult to compare between insurers because so many factors impact annual premiums. The cheapest insurer for one driver may not be the cheapest for another. To determine our cost score, we look at insurance rate estimates generated by Quadrant Information Services, discount opportunities, and consumer reports.
• Service: We comb through customer reviews on sites like the Better Business Bureau (BBB) to learn about customer experiences. Insurers with a low volume of complaints score well in this area. We also consider the claims process, giving higher ratings to car insurance providers that offer a smooth experience.
• Technology: Providers with an online quote tool, easy-to-use claims app and a usage-based insurance app score best in this category.

*Data accurate at time of publication.

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