Believe it or not, car insurance is not mandatory in all states in the U.S. However, if you are a Canadian motorist, it’s a bit of a moot point, since the insurance coverage you must have to drive legally in Canada is automatically at work any time you’re driving south of the border. If you are relocating to the U.S., then the situation is different. As Canada regulates car insurance at the provincial level, American insurance rules originate at the state level.
U.S. States with No Car Insurance
The U.S. auto insurance system is much different than the Canadian version. The basic premise behind all motor vehicle operation in the States is that a driver must demonstrate he has the economic means to take responsibility for damages he causes resulting from use of his vehicle. It’s generally accepted that car insurance is the best way to accomplish this, but every state has their own take on this philosophy. Some of these views are rather primitive, but fortunately, auto insurance is available and commonly used in all 50 states. The three states without or with alternatives to mandatory coverage don’t restrict motorists from having car insurance.
There is no mandatory insurance law in New Hampshire, though the local DMV strongly recommends carrying at least standard liability and property damage coverage. There are certain circumstances where proof of fiscal responsibility for operating a motor vehicle is required, with insurance being the most accessible way of accomplishing this. Those circumstances include:
- Driving while intoxicated convictions, including underage DWI
- Leaving the scene of an accident
- Driver conduct leading to charges after an accident
- 2 or more convictions for reckless operation of a motor vehicle
The requirement for maintaining proof of insurance may follow a conviction for three years or more. If you are required to show proof of fiscal responsibility, you cannot renew your license or register a vehicle without proof of insurance.
Virginia has an “either/or” car insurance system. While the state has minimum car insurance coverage provisions, a motorist can also choose to pay an uninsured motor vehicle fee. This fee is $500 and covers a period of 12 months. It provides the driver with no sort of insurance protection. The driver remains liable for damages if involved in an accident. This could involve significant costs in even a minor accident.
Technically, Mississippi requires car insurance coverage, but drivers in the state can satisfy minimum liability and bodily injury requirements by posting a bond, making a cash deposit or security deposit equal to the minimum amounts.
While there are technically ways to avoid car insurance in each of these states, insurance itself remains the easiest and most affordable way to satisfy liability responsibility.