Written by Parnall Law Firm reviewed by Bert Parnall
Most states require drivers to carry a minimum insurance coverage, including liability insurance. However, some states have additional insurance requirements, such as personal injury protection.
Carrying minimum insurance coverage provides crucial financial protection in an at-fault accident. Most importantly, higher insurance coverage gives you an upper hand when involved in an accident.
An auto accident victim can sue for damages that exceed your insurance coverage, highlighting the need for a higher limit.
If you are injured in a car accident caused by someone else’s negligence, consult a trusted car accident attorney.
Minimum Auto Insurance by State in the United States
The insurance limit is the maximum damages an insurance provider will pay in a car crash. Each state has a minimum auto insurance limit, providing the lowest coverage a vehicle owner can carry and operate legally.
In New Mexico, the liability limit is 25/50/10, corresponding to bodily injury per person, bodily injury per accident, and property damage.
Here is a brief of the applicable limits in New Mexico:
- $25,000 in bodily injury to a person, an amount an insurer pays to cover injuries you cause in an at-fault accident.
- $50,000 in bodily injury per accident is the maximum dollar amount paid to those injured in an at-fault accident.
- $10,000 in property damage is the limit an insurer will pay for damage to another person’s property in an at-fault accident.
Here are the penalties for driving without insurance in New Mexico:
- A fine of up to $300.
- A jail term of up to 90 days.
- Suspension of vehicle registration.
In addition to the above insurance limits, some states require extra requirements. For instance, Connecticut has the following auto insurance policy limits:
- $25,000 bodily injury per person.
- $50,000 bodily injury per accident.
- $25,000 property damage per accident.
It also has the following additional requirements:
- $25,000 uninsured/underinsured motorist bodily injury per person.
- $50,000 uninsured/underinsured motorist bodily injury per accident.
Florida has the following minimum auto insurance coverage limits:
- $10,000 property damage per accident.
- $10,000 personal injury protection.
States that Don’t Require Minimum Auto Insurance Coverage
All states except South Carolina, New Hampshire, and Virginia require vehicle owners to carry minimum auto insurance. Even so, drivers in the exempted states may need auto insurance in specific scenarios, including:
- South Carolina: The state allows eligible vehicle owners to register as uninsured motorists after paying a $600 registration fee. Under the plan, motorists are responsible for paying for property damage or injury they cause others in an at-fault accident.
- Virginia: Residents can drive without insurance by paying an uninsured motorist fee of $500. The law leaves drivers without insurance in the event of an accident. Further, Virginia law requires uninsured drivers to pay for other people’s injuries and property damage in an at-fault accident.
- New Hampshire: You are not required to carry auto insurance requirements if you can prove to have met the state’s financial requirement criteria. Failure to adhere to the state’s financial requirement rules could lead to a suspension of your driver’s license. The New Hampshire Department of Motor Vehicle may require you to purchase insurance for vehicle owners involved in at-fault accidents.
Types of Auto Insurance Coverage
Liability Insurance
Liability insurance protects you if you’re financially liable for someone’s injury or property damage. It comes as a standard feature for auto liability.
Here are instances where liability coverage applies in auto accidents:
- Injuries you cause to another person while driving.
- Legal charges for accident-related lawsuits.
- Damages you cause to other vehicles in an at-fault accident.
- Damage to someone’s property, such as a mailbox, shop, or signpost.
Personal Injury Protection (PIP)
Personal injury protection, called ‘no-fault insurance,’ covers medical bills and related losses regardless of who caused the crash. It covers medical expenses for insured policyholders and passengers, including those without insurance.
In addition to medical expenses, PIP covers other injury-related expenses, such as lost income, child care, and funeral expenses.
There is a difference between personal injury protection and bodily injury liability. Personal injury protection covers medical expenses related to an accident, regardless of the at-fault party. On the contrary, bodily injury liability covers expenses to an injured party when you’re at fault.
Uninsured Motorist Coverage (UM)
Many drivers operate without insurance despite the requirement in many U.S. states to carry insurance. According to estimates by the Insurance Information Institute, one out of eight drivers does not carry auto insurance; in some states, the number is one out of five.
Uninsured Motorist Insurance covers the medical bills for you and your passengers if you are involved in an accident with an uninsured motorist. It can also cover the cost of damages to your vehicle or personal property if the accident was caused by an uninsured driver.
Underinsured Motorist Coverage (UIM)
In some instances, the at-fault driver may have auto insurance that barely covers the damages related to the accident. As such, the underinsured motorist coverage (UIM) should cover the shortfall.
Here’s what would happen if hit by a truck driver with insufficient insurance:
- The underinsured motorist bodily coverage would cover medical expenses for you and your passengers which exceed the truck driver’s liability policy coverage.
- The underinsured motorist’s property coverage may pay for damages to your vehicle.
Medical Payments Coverage (MedPay)
If injured, medical payment coverage covers the following expenses for you and your passengers:
- Doctor and hospital visits
- Medication
- Health insurance co-pays and deductibles
- Surgery and diagnostic tests
- Ambulance fees
- Emergency room costs
Unlike bodily injury liability coverage, medical payment coverage is optional. You may have to pay out of pocket if injured when you don’t have medical payment coverage.
Like personal injury protection, medical payment coverage covers medical expenses after an accident, regardless of who caused it.
How the Fault System in a State Affects Minimum Car Insurance Requirements
New Mexico is a fault state, which means the negligent driver is liable for the damages related to the accident. Sometimes, the accident victim doesn’t obtain compensation from the at-fault party.
An injured party can use the following options:
- File an insurance claim with the insurer of the at-fault party
- Initiate a personal injury lawsuit to obtain court-ordered compensation
In a no-fault state, you can file a claim with your insurance company to recover accident-related damages if you’re injured in a car crash. The policy applies regardless of the at-fault party.
Kentucky, New Jersey, and Pennsylvania apply optional ‘no fault’ or ‘choice no-fault state.’ The rule allows policyholders to choose between a standard type of insurance and no-fault. Drivers who choose no-fault limit their ability to sue for non-economic losses.
Those who choose a standard tort option retain their ability to sue for monetary and non-monetary losses.
Injured in an Accident? Get in Touch With an Experienced Auto Accident Attorney
Victims of auto accidents endure physical harm and disruptions to their personal lives. They, therefore, deserve compensation for injury-related losses like medical expenses, lost income, and pain and suffering.
An experienced attorney can demonstrate the extent of your injury and negotiate for a fair settlement value that matches your losses. Parnall Law is a team of personal injury attorneys with decades of experience representing injured victims. Contact us online or at (505) 268-6500 for a free consultation.
