Research Report

Research Reports

The Case for Raising Auto Insurance Minimums

June 25, 2024

Executive Summary


  • Minimum levels of insurance are severely inadequate: Many states set their minimum levels of insurance decades ago and they have not been changed to reflect increases in medical care costs, increases in motor vehicle repair costs, or even inflation generally.
  • Raising minimum insurance requirements does not increase drivers’ premiums: Despite fears that raising required minimum levels of insurance will increase premiums, states that have raised their minimum levels have seen the cost of auto insurance increase at a lower rate than the country as a whole over equivalent periods.3
  • Raising minimum levels of insurance does not increase the number of uninsured drivers: Higher minimum insurance levels are associated with lower rates of uninsured motorists. The majority of states that have raised minimums saw the proportion of uninsured drivers decrease.
  • Increasing minimum insurance levels protects victims: Raising minimum insurance levels helps crash victims who would otherwise be left without full compensation for their losses and relieves the financial burden on health care providers, charities, local governments, and taxpayers.
  • Motor vehicle crash costs exceed $340 billion per year, only half of which is covered by insurance: Over 40,000 people are killed and more than 2 million are injured in motor vehicle crashes each year. The economic cost of these crashes exceeds $340 billion a year, but only 54% of these costs are paid by insurance companies. Crash victims, health care providers, charities, and local governments end up bearing the rest of the economic burden.



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