### Understanding State Minimum Requirements & ### The Liability Coverage Landscape

State minimum insurance requirements represent the legal floor for coverage, not recommendations for adequate protection. These minimums were established decades ago and haven't kept pace with inflation, medical costs, or modern vehicle values.

Historical Context reveals why minimums are inadequate. Most state minimums were set in the 1970s and 1980s when medical costs were dramatically lower and vehicles were less expensive. For example, California's $15,000 per person minimum was established in 1967 when the average hospital stay cost $53 per day. Today, that same hospital stay costs over $2,000 daily, but the minimum coverage hasn't increased proportionally. Legal vs. Financial Adequacy represents a crucial distinction. State minimums ensure compliance with legal requirements but don't provide meaningful financial protection. Meeting minimum requirements prevents license suspension and legal penalties, but offers little protection against real-world accident costs that routinely exceed these thresholds. Types of Required Coverage vary by state but typically include liability coverage for bodily injury and property damage. Some states also require personal injury protection (PIP), uninsured motorist coverage, or medical payments coverage. However, no state requires comprehensive or collision coverage, leaving vehicle owners vulnerable to damage to their own cars. Enforcement and Penalties for driving without minimum coverage include license suspension, vehicle impoundment, fines ranging from $500-5,000, and SR-22 filing requirements. These penalties create strong incentives to maintain minimum coverage but don't address the adequacy question.

Liability coverage requirements vary dramatically across states, creating a patchwork of protection levels that don't reflect regional differences in costs or risks.

Bodily Injury Liability Ranges from as low as $10,000 per person in Florida to $50,000 per person in Alaska. Most states require $25,000-30,000 per person, which covers less than one day in an intensive care unit at current medical costs. The average cost of an emergency room visit now exceeds $2,000, making minimum coverage inadequate for even minor injury claims. Property Damage Liability Minimums range from $5,000 in some states to $25,000 in others. Given that the average new car costs over $47,000 in 2024, and luxury vehicles can exceed $100,000, minimum property damage coverage often fails to cover even single-vehicle damage in moderate accidents. Combined Single Limit States like Georgia require one overall limit (typically $25,000) that applies to all damages from an accident. This approach can be particularly problematic in multi-vehicle accidents where damages easily exceed these limits. No-Fault State Variations add complexity by requiring personal injury protection (PIP) coverage that pays for your own medical expenses regardless of fault. States like Michigan, New York, and Florida have unique PIP requirements that affect overall coverage needs and costs.