At the time of publication, every U.S. state plus the District of Columbia requires car insurance in some form except for New Hampshire, according to the Insurance Information Institute. In New Hampshire, drivers can prove they have the financial ability to cover at-fault accidents in lieu of the mandatory liability coverage required in other states.
Liability coverage is the auto insurance component most states require drivers to carry. This type of insurance pays costs for property damage and personal injury that result to others when you cause an accident. Other insurance elements, such as collision and comprehensive, are optional. Some lenders and leasing companies do require these coverages as well, though.
New Hampshire Basics
New Hampshire takes a different approach to holding drivers accountable for financial risks. A driver must demonstrate financial ability to pay for at-fault obligations to the New Hampshire Division of Motor Vehicles. Without proof of financial resources, a driver may be denied a license or have his license suspended. When you cause an accident, you are generally liable for any medical claims and property damage caused to other vehicles. If you fail to pay these, those harmed could sue you, which results in additional legal defense costs on top of the potential injury and property damages you could pay.
New Hampshire drivers have the option to purchase auto liability coverage, along with comprehensive and collision benefits to cover their own vehicles. However, if you elect to buy liability benefits, you must meet state minimum standards. At the time of publication, the state auto insurance guide indicates minimum coverage amounts of $25,000 per person for bodily injury, $50,000 per accident for bodily injuries and $25,000 in property damage. New Hampshire law also requires that you combine uninsured and underinsured motorist protection with a liability policy. These coverages pay your injury and repair costs when another driver is unable to pay, or when you are a victim of a hit-and-run.
Other Substitution Alternatives
In addition to New Hampshire, several states offer financial responsibility alternatives to a liability policy. These states often suggest that liability coverage is the simplest approach, but self-assurance certificates, surety bonds and uninsured motorist fees are sometimes accepted as substitutes. Ohio accepts a government bond of at least $30,000 in lieu of insurance, for instance. CarInsurance.com reports Tennessee, Texas, California, Nebraska, Iowa, Washington state and Mississippi as other states that accept non-insurance alternatives for financial responsibility.
Despite insurance legal insurance requirement in most states, the Insurance Information Institute reports a 12.6-percent national rate of uninsured motorists.