Press Release
Outdated Auto Insurance Minimums Leave Taxpayers, Victims with Collision Costs
New AAJ Research Shows Auto Insurance Profits Skyrocketing While Taxpayers & Families are Left High and Dry After a Crash
January 08,2026WASHINGTON, DC—The American Association for Justice (AAJ) released new research today highlighting the potential cost to taxpayers and financial devastation car collision victims and survivor families can suffer, due to outdated auto insurance minimums. “The Case for Raising Auto Insurance Minimums” reveals that nearly half of all motor vehicle crash costs are not covered by insurance, with more than a quarter of costs passed along to taxpayers through heath care providers, local governments, and charities.
"It's unacceptable that auto insurance minimums remain woefully low, while the cost of medical care and vehicle repair continue to rise," said AAJ President Bruce Plaxen. "These companies are bringing in record profits, while victims are left to bear the financial burden."
Auto insurance minimums dictate the lowest amount of coverage an insurer must provide to protect drivers and the public at large. Set by state law, many auto insurance minimums were established in the 1970s and have not been updated, leaving the amount abysmally inadequate for today’s needs.
According to the new report, there is growing national momentum to take action. Over the past year, California, Virginia, North Carolina, and Utah have implemented long-overdue increases in their minimum coverage levels.
Not only have the increases in these states resulted in no detrimental effects on drivers’ premiums, but these states have typically seen smaller premium increases than the national average. Raising outdated minimums has also not impacted the number of uninsured drivers.
The report’s key findings reveal grounds for states to raise paltry minimums:
-
Just over half – only 54% – of collision costs are paid by insurance companies.
-
Medical care and vehicle repair have outpaced inflation over the last 25 years, while minimum insurance levels have stagnated.
-
According to the U.S. Bureau of Labor Statistics, $10,000 has approximately the same buying power as over $18,500 today.
-
-
When auto insurance fails to cover property damage or medical bills, 23% of the costs are borne by the victims, and the rest falls to taxpayers, local government, health care providers, and even charities.
-
Raising minimums does not lead to more uninsured drivers. Data shows that states with higher minimum auto insurance levels have lower rates of uninsured drivers.
Click here to read the January 2026 update to The Case for Raising Auto Insurance Minimums report.
