The new year brings new beginnings and some states bring new auto insurance laws. If you live in California, North Carolina, Utah or Virginia, the state’s minimum car insurance requirements have increased in 2025. Bankrate’s insurance editorial team is here to break down what drivers need to know about changes.
Changes to 2025 Minimum Coverage Requirements
All states except New Hampshire (and Virginia until July 2024) require drivers to have car insurance. Your state’s department of insurance will not knock on your door and ask for any insurance proof. Instead, when you register your vehicle with it, if you are pulled for a traffic violation or are involved in an accident, you will need to provide proof of coverage. Minimum policy restrictions vary from state to state, but usually consist of compensation for physical damage and property liability.
Minimum Auto Insurance Acts for California, North Carolina, Utah and Virginia have been changed to 2025. However, drivers do not need to take any action. Insurers will automatically adjust the level of liability coverage and the premium may increase slightly.
What is the new insurance law in California?
California’s 2025 minimum coverage increases indicate the first change in compensation requirements in 56 years. This has been in work since 2022 when Gavin Gavin Newsom signed the law on Senate Bill 1107 (now known as the California Protective Driving Act). That won’t stop: California’s minimum car insurance coverage limit rose again in January 2035, starting from 30/60/15 to 50/100/25.
While uninsured/uninsured driver coverage (UM/UIM) is not required in California, new minimum liability coverage restrictions also affect this coverage. UM/UIM’s coverage limits must match the limitation of liability for physical injury. So starting January 1st, if you are purchasing UM/UIM coverage, you will need at least $30,000 per person and $60,000 per accident.
Drivers who choose to create a car department and cash deposit instead of purchasing insurance contracts will also be affected. Instead of a $350,000 cash deposit, drivers who want to go this route will have to pay $75,000.
What is the new insurance law in North Carolina?
2025 brings mixed news to North Carolinian budgets. House Bill 259 will reduce individual income tax rates from 4.5% to 4.25%. But these savings may be short-lived. Senate Bill 452, which comes into effect on July 1, will raise the state’s minimum liability compensation limit from 30/60/25 to 50/100/50. At $50,000 per accident, North Carolina will earn the highest minimum property damage liability limit in the country.
Similarly, the minimum limit for UM/UIM rises to match the increased limit of liability. Additionally, the new law allows non-disabled drivers to collect from both their own uninsured driver coverage and their disabled driver licence liability policies, increasing the financial protection of drivers carrying uninsured/uninsured driver coverage.
What is Utah’s new insurance law?
House Bill 113, passed in 2023, will raise Utah’s minimum car insurance requirements, but it’s not as dramatic as California. Drivers in Utah will need to be liable for $30,000 per person, but the per-accident limits remain the same. Minimum personal injury protection remains unchanged at $3,000.
Just like in California, changes to minimum physical injury liability coverage means changes to coverage limits for uninsured/uninsured drivers. UM/UIM coverage is not required in Utah, but if listed in the policy it would require at least $30,000 per person and $60,000 per accident.
What is Virginia’s new insurance law?
The increase in minimum coverage for 2025 is Phase 2 of Virginia’s Auto Insurance Overhaul. Until June 2024, drivers could opt to pay uninsured drivers’ fees instead of purchasing car insurance. However, since July 1, 2024, Virginia drivers are no longer permitted to sign up for the uninsured driver program. Instead, everyone needs to buy car insurance.
Auto insurance was not a legal requirement by July 2024, but those who purchased the insurance policy were required to meet the old minimum coverage requirement of 30/60/20. Starting January 1, 2025, these limits will increase to 50/100/25. Virginia does not require uninsured/uninsured driver coverage, but drivers who have it under the policy should ensure that the coverage limit is in compliance with the new Liability Liability Act.
Why are the state’s minimum insurance restrictions rising?
Insurance restrictions are regulated by state governments rather than federal levels. This means that individual states can decide whether motor insurance is mandatory and if so, there are minimum contract restrictions required. In short, car insurance is designed to support costs that may be liable after an accident. As these costs increase, the minimum compensation limit should ideally increase for Lockstep, whether or not vehicle repair costs have increased or medical costs have become more expensive.
What do I need to know about the restrictions on the new policy?
Good news – not that much! If you currently have the lowest range of car insurance, coverage will automatically be adjusted to comply with the new law. Drivers with already-compensation restrictions and drivers above the minimum required by the state will not be affected by these changes.
Beware of premiums as they may rise slightly to explain the higher limit. Remember, with car insurance, higher coverage limits usually result in higher prices. However, prices are expected to rise significantly. That being said, if you’re facing unpleasant large auto insurance premiums, here’s what you can do about it:
- Make sure deductions are possible: Increased deductibles usually earn you cheaper car insurance, but don’t try to get too expensive. Your deduction should always be an amount that you can comfortably pay with a momentary notification.
- Consider a telematics program: The Telematics program uses both to hold a phone app, a small device that connects to a car, or a tab for driving behavior. A safe driver is usually rewarded with discounts.
- Compare quotes: Grass may turn green at another car insurance company. Compare quotes and you can find the cheapest company.
- Chat with a license agent and ask about discounts: There may be discounts you are not using. Talking to a license agent can help you trim coverage that you may find extra savings or become unwanted.
