When did mandatory car insurance start?

Mandatory car insurance started in 1925 when Connecticut was the first state to integrate mandatory auto insurance laws. By 1927, car insurance became mandatory across the country, except in New Hampshire and Virginia. Read our guide to learn the mandatory car insurance laws in your state.

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Tonya Sisler has a Bachelor’s Degree from the University of South Carolina in Journalism and has worked for 15+ years in management. She has also completed a proofreading certification and is currently a professional writer.

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Brad Larson has been in the insurance industry for more than a dozen years. He started out as a claims adjuster for a national carrier. He has since switched to the agency side of the business. Brad is licensed in all P&C lines.

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Reviewed by Brad Larsen
Licensed Auto Insurance Agent

UPDATED: Oct 30, 2020

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Here's what you need to know...

  • Car insurance is mandatory in all states except New Hampshire and Virginia
  • Mandatory car insurance laws protect all drivers and put the responsibility on each driver in the event of an accident
  • Connecticut was the first state to integrate mandatory insurance laws in 1925
  • Today, the courts have upheld the notion that mandatory car insurance is justified and sound

All states in the U.S. with the exception of Virginia and New Hampshire, have a mandatory car insurance requirement. Virginia requires only that someone carry uninsured motorist coverage if the other person involved in the accident did not carry enough to cover the damages or liability.

New Hampshire’s Mandatory Insurance Requirements

New Hampshire just requires that someone show personal responsibility so that it is believed that they will handle their driving responsibly and not commit acts of recklessness or negligence that could lead to a mishap or accident.

They do not require mandatory car insurance like most of the other states do. But they do need a sense of responsibility among drivers so that all drivers feel relatively safe on the roads.

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History of Mandatory Insurance

Auto insurance became mandatory in 1927. The first state to offer liability coverage for automobiles was Connecticut in 1925.

The state of Connecticut was most concerned about the financial responsibility and the resulting lawsuits that might occur following accidents. Connecticut included the three major areas of injury, death, and property damage in its areas of fiduciary responsibility.

The Bottom Line of Insurance


What did insurance do that helped people to deal with the costs of accidents and financial obligations in such cases?

For one thing, it protected the driver from losing their license in the event of an accident. Before car insurance was mandatory, there was a greater number of lawsuits springing up from car accidents and mistakes that drivers made which resulted in the injury or death of other drivers.

By the 1970’s, most states had instigated the mandatory insurance laws, and they still exist today.

Since then, there have been fewer large-scale lawsuits resulting from car accidents and a greater sense of responsibility among drivers that they may have to pay if they are negligent.

Who was first?

The state of Massachusetts was the first one to implement mandatory car insurance.

Massachusetts felt that mandatory insurance was a requirement to ensure that people are held up to a standard of conduct while driving that prohibits careless and reckless driving and protects drivers on the roadways.

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Connecticut’s Early Insurance Laws

Connecticut was the first state to require mandatory insurance for drivers.

When Connecticut first implemented the new insurance laws, they required any driver of a vehicle involved in an accident which resulted in personal injury or property damage to show financial responsibility at a minimum amount of $10,000.

Current Connecticut Insurance Requirements

Today, the state of Connecticut requires the following minimums to be carried on your car insurance, according to the Connecticut DMV.

The state of Connecticut also puts an emphasis on the uninsured or underinsured motorist clause. If a driver who is poorly insured or uninsured causes an accident, you must have adequate coverage to make up the difference to avoid costly out-of-pocket expenses.

An uninsured driver or one who does not have adequate insurance coverage to pay your medical expenses may cause you to have to pay large amounts of out-of-pocket expenses due to an accident, even if it was not your fault.

An uninsured/underinsured motorist coverage must have the minimum coverage amounts of 20/40/10, as required by Connecticut law.

State Minimum Requirements for Mandatory Coverage

The other states have varying amounts of liability, personal injury, and property damage that they use as minimums.

This is usually stated as 20/40/10. It means you must carry $20,000 for liability amounts, $10,000 for property damage, and $40,000 for personal injury. You can check out the various state insurance minimums here to find out what is required for your state.

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Why do states insist on absolute minimums with car insurance?

States require certain minimums on car insurance because they try to keep the damage level as low as possible in the event of an unfortunate accident.

For example, if a driver hits another car that results in the severe injury of a person totally $20,000 but the state minimum is only $10,000, the person who was negligent may have to dip into their pocket for the remainder of the amount.

This is true unless they have gap coverage or the other side’s insurance company agrees to pay for some damages.

States decide on the minimums based on the statistics on accidents present in their state at the time they adjust these numbers. These numbers stay pretty much the same over the long term, but they are always subject to new information and statistics that may show a need to increase or decrease them.

Proving Negligence


Negligence is greatly involved in car accident claims. Negligence in generally defined as an incident where someone knew or should have known that they were supposed to do something and didn’t.

This usually involves only situations which have or could cause damage, injury, or death to a person, such as a car accident, slip-and-fall injuries, and other similar situations.

So remember when you are driving to try to consider whether you are using prudent judgment at all times and if someone could show you were negligent. If they could prove negligence regarding your driving behavior, you could be found at fault and be ordered to pay for damages.

This is why insurance was created. The entire insurance concept was meant to take people out of the court systems and put them with the insurance boards instead.

It was believed that the insurance experts, such as insurance providers, claims experts, and adjusters, would have a better vantage point to see clearly what happened.

They often use reports from police at the time of the incident and other factors such as the weather that day, to help determine what happened.

But the insurance process is meant to keep people from filing lawsuits while still getting a just compensation to the people involved without causing permanent damage to loss of license to the negligent parties.

The 1987 Car Insurance Ruling

In 1987, some motorists decided they would challenge the California courts about mandatory car insurance. This argument ended up in the California Supreme Court.

But the Court ruled that the ruling was both sound and constitutional because it puts the responsibility for safe driving in the hands of each driver, rather than leaving it all to chance and personal negotiations.

Car insurance was created to protect people. Each month that we pay a car insurance premium, we are reminded that an accident could happen. We pay such premiums to avoid even costlier liabilities down the road. It is a subtle but powerful reminder of our mortality.

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Shopping and Comparing Insurance Plans

When you are shopping and comparing insurance plans, first make sure that the policy you are considering reflects the state minimums that you are required to carry. You can also increase the amount that you give yourself if you feel the risk is more than the state minimums cover.

Compare policies and companies side-by-side to see what optional coverages are available such as roadside assistance plans, car rental services, medical coverage, and others that you may want to add.

Ask lots of questions when you talk to someone about the coverages so that you know you are getting the most for your money.

As with any insurance purchase, you must always weigh the risk of having an accident, no matter how small, with the chances of having a collision that could result in liability for you or out-of-pocket expenses that you may be required to pay.

People can get this payment from you in some ways, including legal actions, court insurance settlements, or lawsuits. Insurance protects you for a majority of this amount in the event of an accident, but it may not pay all of the costs incurred from an accident.

So, when you are resenting paying those premiums every month, just remember that it is much better than the alternative.


  1. http://www.scc.virginia.gov/boi/pubs.aspx
  2. http://www.nh.gov/insurance/
  3. http://blog.esurance.com/the-surprisingly-fascinating-history-of-us-car-insurance/#.V4PqmJMrLeQ
  4. https://www.nerdwallet.com/blog/insurance/car-insurance/
  5. http://articles.latimes.com/1987-10-27/news/mn-16876_1_mandatory-auto-insurance-law

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