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Automobile Financial Responsibility/Compulsory Limits by State
State |
Liability limits (1) |
State |
Liability limits (1) |
State |
Liability limits (1) |
| Alabama | 20/40/10 | Kentucky | 25/50/10 | North Dakota | 25/50/25 |
| Alaska | 50/100/25 | Louisiana | 10/20/10 | Ohio | 12.5/25/7.5 |
| Arizona | 15/30/10 | Maine | 50/100/25 | Oklahoma | 10/20/10 |
| Arkansas | 25/50/15 | Maryland | 20/40/15 | Oregon | 25/50/10 |
| California (2) | 15/30/5 | Massachusetts | 20/40/5 | Pennsylvania | 15/30/5 |
| Colorado | 25/50/15 | Michigan | 20/40/10 | Rhode Island | 25/50/25 |
| Connecticut | 20/40/10 | Minnesota | 30/60/10 | South Carolina | 15/30/10 |
| Delaware | 15/30/5 | Mississippi | 10/20/05 | South Dakota | 25/50/25 |
| D.C. | 25/50/10 | Missouri | 25/50/10 | Tennessee* | 25/50/10 |
| Florida** | 10/20/10 | Montana | 25/50/10 | Texas | 20/40/15 |
| Georgia | 25/50/25 | Nebraska | 25/50/25 | Utah | 25/50/15 |
| Hawaii | 20/40/10 | Nevada | 15/30/10 | Vermont | 25/50/10 |
| Idaho | 25/50/15 | New Hampshire* | 25/50/25 | Virginia | 25/50/20 |
| Illinois | 20/40/15 | New Jersey (3) | 15/30/5 | Washington | 25/50/10 |
| Indiana | 25/50/10 | New Mexico | 25/50/10 | West Virginia | 20/40/10 |
| Iowa | 20/40/15 | New York (4) | 25/50/10 | Wisconsin* | 25/50/10 |
| Kansas | 25/50/10 | North Carolina | 30/60/25 | Wyoming | 25/50/20 |
| (1) The first two
figures refer to bodily injury liability and the third figure to
property damage liability. For example, 20/40/10 means coverage up to
$40,000 for all persons injured in an accident, subject to a limit of
$20,000 for one individual, and $10,000 coverage for property damage.
(2) Low-cost policy limits for Los Angeles and San Francisco low-income
drivers in the California Automobile Assigned Risk Plan are 10/20/3.
This is a pilot program effective from July 1, 2000 until January 1,
2004. (3) Drivers may choose a Standard or Basic Policy. Basic Policy
limits are 10/10/5. (4) 50/100 if injury results in death.
* Liability insurance not compulsory; limits are for financial
responsibility. Source: Alliance of American Insurers, American Insurance Association, National Association of Independent Insurers, Insurance Information Institute. |
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STATE AUTO INSURANCE LAWS GOVERNING LIABILITY COVERAGE
State auto insurance laws governing liability coverage fall into four broad categories: no-fault, choice no-fault, tort liability, and add-on. The major differences are whether there are restrictions on the right to sue and whether the policyholder's own insurance company pays first-party (policyholder) benefits, up to the state maximum amount, regardless of who is at fault in the accident.
No-Fault: The no-fault system is intended to lower the cost of auto insurance by taking small claims out of the courts. Each insurance company compensates its own policyholders for the cost of minor injuries regardless of who was at fault in the accident. These "first-party" benefits, which are a mandatory coverage, vary by state with no-fault systems. In states with the most comprehensive benefits, a policyholder receives compensation for medical fees, lost wages, funeral costs and other out-of-pocket expenses. The term “no-fault” can be confusing because it is often used to denote any auto insurance system in which each driver's own insurance company pays for certain losses, regardless of fault. In its strict form, the term no-fault applies only to states where insurance companies pay "first-party" benefits and where there are restrictions on the right to sue.
Drivers in no-fault states may sue for severe injuries if the case meets certain conditions. These conditions are known as the tort liability threshold, and may be expressed in verbal terms such as death or significant disfigurement (verbal threshold) or in dollar amounts of medical bills (monetary threshold).
Choice No-Fault: In choice no-fault states, drivers may select one of two options: a no-fault auto insurance policy, usually with a verbal threshold, or a traditional tort liability policy.
Tort Liability: In traditional tort liability states, there are no restrictions on lawsuits. A policyholder at fault in a car crash can be sued by the other driver and the other driver's passengers for the pain and suffering the accident caused as well as for out-of-pocket expenses such as medical costs.
Add-On: In add-on states, drivers receive compensation from their own insurance company as they do in no-fault states but there are no restrictions on lawsuits. The term “add-on” is used because in these states first-party benefits have been added on to the traditional tort liability system. In add-on states, first-party coverage may not be mandatory and the benefits may be lower than in true no-fault states.
 |
First-party benefits |
Restrictions on lawsuits |
Thresholds for lawsuits | |||
|
"True" No-Fault |
Compulsory |
Optional |
Yes |
No |
Monetary |
Verbal |
| Colorado | X | X | X | |||
| Florida | X | X | X | |||
| Hawaii | X | X | X | |||
| Kansas | X | X | X | |||
| Kentucky | X | X | X (1) | X (1) | ||
| Massachusetts | X | X | X | |||
| Michigan | X | X | X | |||
| Minnesota | X | X | X | |||
| New Jersey | X | X | X (1) | X (1,2) | ||
| New York | X | X | X | |||
| North Dakota | X | X | X | |||
| Pennsylvania | X | X | X (1) | X (1) | ||
| Utah | X | X | X | |||
| Puerto Rico | X | X | X | |||
| Add-on | ||||||
| Arkansas | X | X | ||||
| Delaware | X | X | ||||
| D.C. | X | X (3) | X (3) | |||
| Maryland | X | X | ||||
| New Hampshire | X | X | ||||
| Oregon | X | X | ||||
| South Dakota | X | X | ||||
| Texas | X | X | ||||
| Virginia | X | X | ||||
| Washington | X | X | ||||
| Wisconsin | X | X | ||||
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(1) “Choice” no-fault state. Policyholder can choose a policy based on the no-fault system or traditional tort liability. (2) Verbal threshold for the Basic Liability Policy and the Standard Policy where the policyholder chooses no-fault. The Basic Policy contains lower amounts of coverage. (3) The District of Columbia is neither a true no-fault nor add-on state. Drivers are offered the option of no-fault or fault-based coverage, but in the event of an accident a driver who originally chose no-fault benefits has 60 days to decide whether to receive those benefits or file a claim against the other party. Source: American Insurance Association. | ||||||
Insurance content provided by the Insurance Information Institute