🇺🇸 United States

Auto insurance in the US

Auto insurance in the US is regulated at the state level. There is no federal auto liability minimum. Every state except New Hampshire requires drivers to carry some form of liability insurance (or other financial-responsibility proof). Minimums vary by state. This is a quick overview for foreign visitors — not a replacement for advice from a licensed broker.

The fifty-state problem

Each state's insurance commissioner sets the rules for policies sold in that state. The National Association of Insurance Commissioners (NAIC) is the standards body that US state regulators jointly operate; it publishes cross-state reference material but does not itself regulate.^[1]

Forty-nine states (all except New Hampshire) require drivers to carry liability insurance. State minimums are typically expressed as three numbers:

25 / 50 / 25 = $25,000 bodily injury per person / $50,000 bodily injury per accident / $25,000 property damage

For the 10 most-visited states' exact minimums, see our state rules matrix.^[3]

Standard coverage types

NAIC categorizes US auto coverage into these types:^[2]

• Bodily Injury Liability — you hurt someone; pays their medical bills and legal costs.
• Property Damage Liability — you damage someone's car, fence, building.
• Collision — damage to your vehicle from an accident (optional in most states).
• Comprehensive — non-collision damage to your vehicle: theft, fire, hail, fallen tree, animal strike.
• Uninsured / Underinsured Motorist (UM/UIM) — the at-fault driver has no or inadequate insurance.
• Medical Payments (MedPay) / Personal Injury Protection (PIP) — medical costs for you and your passengers regardless of fault. PIP is mandatory in no-fault states like Florida.

CDW / LDW on rental cars

CDW (Collision Damage Waiver) and LDW (Loss Damage Waiver) are not insurance. They are waivers — agreements by which the rental company waives its right to charge you for damage to, or theft of, the rental vehicle.^[4]

Critically, CDW / LDW:

• Do NOT cover injuries to you or your passengers.
• Do NOT cover third-party liability (hitting someone else).
• Can be voided by reckless driving, driving under the influence, off-road driving, or letting an unauthorized driver use the vehicle.

Most US rental base prices do not include liability coverage in most states. If your home-country policy or travel insurance does not extend to US rentals, you will want to buy the rental company's supplemental liability at the counter, separately from CDW/LDW.^[4]

Three ways foreign visitors usually get covered

1. Buy at the rental counter. Simplest, most expensive. Expect to pay $20-40/day for CDW and another $10-15/day for supplemental liability, on top of your base rate.
2. Your credit card's rental coverage. Many premium cards (particularly travel cards) include secondary — and sometimes primary — rental CDW coverage when you pay the full rental on that card. Check the card's actual benefits guide before relying on this. Coverage often excludes SUVs, trucks, luxury vehicles, off-road, and specific countries. Credit cards rarely cover liability.
3. Travel insurance. Many travel policies (annual or trip-specific) from your home country include rental CDW and some liability. Policy language is everything — read before you buy.

What to verify before you rent

• Does your home auto policy extend to the US? (Usually: no.)
• Does your credit card offer primary or secondary rental CDW? What's excluded?
• Does your travel insurance include supplemental liability, not just CDW?
• What's the deductible on any coverage you're relying on?
• In no-fault states (Florida, New York, others), what medical coverage do you have if you're hurt?