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Do all states have a mandatory auto insurance minimum?

What is Happening in Wisconsin?

As you look across the US, you will find that all but three states have laws setting mandatory insurance levels for the vehicles on the road. Almost without exception, all these states also have laws making it a crime to drive a vehicle on a public road without a valid policy in-force. This gives drivers a simple choice: either carry the minimum insurance or risk fines and, in some states, the confiscation of your vehicle. All these laws are a compromise between the interests of drivers and the interests of people who may be injured in traffic accidents. Sounds good, right?

The Problem in Wisconsin

Most people agree that forcing vehicle owners to carry insurance is a good idea but there’s a problem. Almost all of these states set the mandatory amounts for coverage forty or fifty years ago. What was an adequate amount then is a drop in the ocean today. So in February 2009, the state of Wisconsin increased the mandatory rates for both liability insurance and uninsured or underinsured motorist coverage. The Wisconsin auto insurance change resulted in a significant increase in the mandatory auto insurance premiums of its residents.

This review of the minimum amounts after forty years was perfectly reasonable. Most other states will have to follow the Wisconsin auto insurance example sooner or later because it is simply unacceptable to have such low minimums when medical and repair costs have risen so sharply. But the timing is unfortunate–especially since many insurers are raising rates in order to restore their reserve capitals to the same levels they were in 2007.

But what does this mean for you, the average auto insurance consumer? It means you must shop around and get auto insurance quotes from as many companies as possible to find the best prices. Not all companies lost heavily. Equally, the smaller companies will have to raise the cash from smaller groups of policy holders. So get the maximum possible number of auto insurance quotes to survey the market before buying.




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