These states are increasing minimum coverage requirements in 2025
Key takeaways
- In California, minimum coverage car insurance requirements are 30/60/15 effective Jan. 1, 2025.
- Utah minimum coverage limits will increase to 30/60/25.
- Virginia limits will be 50/100/25.
- North Carolina’s car insurance requirements will rise to 50/100/50 effective July 1, 2025, making it the state with the highest property damage minimum limit.
- Drivers don’t need to take any action.
A new year brings new beginnings and, in some states, new car insurance laws. If you live in California, North Carolina, Utah or Virginia, your state’s minimum car insurance requirements are going up in 2025. Bankrate’s insurance editorial team is here to break down what drivers need to know about the changes.Â
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Powered by Coverage.com (NPN: 19966249)
Coverage.com, LLC is a licensed insurance producer (NPN: 19966249). Coverage.com services are only available in states where it is licensed. Coverage.com may not offer insurance coverage in all states or scenarios. All insurance products are governed by the terms in the applicable insurance policy, and all related decisions (such as approval for coverage, premiums, commissions and fees) and policy obligations are the sole responsibility of the underwriting insurer. The information on this site does not modify any insurance policy terms in any way.
2025 minimum coverage requirement changes
Every state except New Hampshire (and, up until July 2024, Virginia) requires drivers to have a car insurance policy. Your state’s insurance department won’t knock on your door demanding proof of a policy; instead, you’ll likely be required to show proof of coverage when you register your vehicle with the state, if you’re pulled over for a traffic violation or if you’re involved in an accident. Minimum policy limits vary by state, but they usually consist of bodily injury and property damage liability coverage.
California, North Carolina, Utah and Virginia minimum car insurance laws are changing in 2025. However, drivers don’t need to take any action. Your insurance company will adjust your liability coverage levels automatically, and your premium may increase slightly.
What is the new insurance law in California?
- Old minimum car insurance liability limits: 15/30/5
- New minimum car insurance liability limits: 30/60/15
- Change effective Jan. 1, 2025
The 2025 minimum coverage increase in California marks the first time coverage requirements have changed in 56 years. This has been in the works since 2022, when Gov. Gavin Newsom signed Senate Bill 1107 (now known as the Protect California Drivers Act) into law. It won’t stop there: California minimum car insurance coverage limits will rise again in January 2035 from 30/60/15 to 50/100/25.
Uninsured/underinsured motorist coverage (UM/UIM) isn’t mandatory in California, but the new minimum liability coverage limits will also affect this coverage type. UM/UIM coverage limits must match bodily injury liability limits. So, beginning Jan. 1, you must have at least $30K per person and $60K per accident if you purchase UM/UIM coverage.
Drivers who choose to make a cash deposit with the Department of Motor Vehicles in lieu of purchasing an insurance policy will also be affected. Instead of a $35K cash deposit, drivers who wish to go this route must pay $75,000.
What is the new insurance law in North Carolina?
- Old minimum car insurance liability limits: 30/60/25
- New minimum car insurance liability limits: 50/100/50
- Change effective July 1, 2025
2025 brings mixed news for North Carolinians’ budgets. House Bill 259 will decrease individual income tax rates from 4.5 percent to 4.25 percent. But, those savings may be short-lived. Senate Bill 452, which goes into effect July 1st, will raise the state’s minimum liability coverage limits from 30/60/25 to 50/100/50. At $50,000 per accident, North Carolina will have the highest property damage liability minimum limit in the country.Â
Similarly, UM/UIM minimum limits will rise to match the increased liability limits. Additionally, the new legislation will allow the not-at-fault driver to collect from both their own uninsured motorist coverage and the at-fault driver’s liability policy, resulting in increased financial protection for drivers who carry uninsured/underinsured motorist coverage.
What is the new insurance law in Utah?
- Old minimum car insurance liability limits: 25/65/15
- New minimum car insurance liability limits: 30/65/25
- Change effective Jan. 1, 2025
House Bill 113, passed in 2023, will raise minimum car insurance requirements in Utah, but not as drastically as in California. Utah drivers are now required to carry $30K in bodily injury liability per person, but the limit per accident will remain the same. The minimal personal injury protection remains unchanged at $3,000.
Just like in California, a change in minimum bodily injury liability coverage means a change in uninsured/underinsured motorist coverage limits. UM/UIM coverage isn’t required in Utah, but if you have it on your policy, you must have at least $30K per person and $60K per accident.
What is the new insurance law in Virginia?
- Old minimum car insurance liability limits: 30/60/20
- New minimum car insurance liability limits: 50/100/25
- Change effective Jan. 1, 2025
The 2025 minimum coverage increase is phase two of Virginia’s car insurance overhaul. Up until June 2024, drivers could choose to pay an uninsured motorist fee instead of buying a car insurance policy. But after July 1, 2024, Virginia drivers were no longer allowed to enroll in the uninsured motorist program. Instead, everyone must purchase a car insurance policy.
Although car insurance was not a legal requirement before July 2024, those who did purchase a policy still had to meet the old minimum coverage requirements of 30/60/20. Beginning Jan. 1, 2025, those limits will increase to 50/100/25. Uninsured/underinsured motorist coverage is not required in Virginia, but drivers who have it on their policy must ensure coverage limits are in compliance with the new liability limit laws.
Why are state minimum insurance limits rising?
Insurance limits are regulated by state governments, not at the federal level. This means that each individual state can decide if car insurance is mandatory and, if so, the required minimum policy limits. In short, car insurance is designed to help with costs you may be responsible for after an accident. When those costs increase — whether it’s because vehicle repair costs are on the rise or medical bills have become more expensive — minimum coverage limits should ideally increase in lockstep.
What do you need to know about the new policy limits?
Good news — not much! If you currently have a minimum coverage car insurance policy, your coverage will automatically adjust to comply with the new laws. Drivers who already have coverage limits higher than the state-required minimums will not be affected by these changes.
Keep an eye on your premium, as it could rise slightly to account for the higher limits. Remember, with car insurance, higher coverage limits typically result in higher prices. However, the price increase is expected to be fairly marginal. That said, if you’re facing an uncomfortably large auto insurance premium, here’s what you can do about it:
- Check your deductible: Raising your deductible will usually result in a cheaper car insurance premium, but make sure not to raise it too high. Your deductible should always be an amount of money you can comfortably pay at a moment’s notice.
- Consider a telematics program: Telematics programs use either a phone app, small device you plug into your car or both to keep tabs on your driving behavior. Safe drivers are usually rewarded with a discount.
- Compare quotes: The grass could be greener with a different car insurance company. Comparing quotes can help you find the cheapest company for you.
- Chat with a licensed agent — and ask about discounts: There could be discounts you’re not taking advantage of. Speaking with a licensed agent could help you spot extra savings or trim down coverage you may no longer need.
