Here's a little secret about car insurance: You don't have to have car insurance in many states. Most states have an alternative to buying auto insurance.

What states do have are "financial responsibility" laws. These essentially say that you must have a way to compensate others if you cause an accident. The alternative to car insurance is typically:

  • Posting a deposit or bond with the state
  • "Self-insuring," typically for owners of more than 25 vehicles, such as rental car companies

Most people either don't know there's an alternative to auto insurance or find it more convenient to buy car insurance than give the state a big wad of money.

Self-insuring means that you choose not to buy auto insurance because you have the money to pay any judgments against you arising out of use of your vehicles. To do this, you generally must get a certificate of self-insurance from the state. The department that issues self-insurance certificates varies by state.

New Hampshire is the only state without a financial responsibility law. But even in New Hampshire you have to have car insurance if you cause an accident.

Here's a look at states that don't require car insurance and the other options.

Do you have to have car insurance? State laws for alternatives

State Bond/Deposit? Self-insurance?
Alabama $50,000 For owners of more than 25 vehicles
Alaska $50,000 For owners of more than 25 vehicles
Arizona $40,000 For owners of more than 10 vehicles
Arkansas No For owners of more than 25 vehicles
California No For owners of more than 25 vehicles
Colorado $35,000 For owners of more than 25 vehicles
Connecticut No For owners of more than 25 vehicles
Delaware $40,000 For owners of more than 15 vehicles
District of Columbia No For owners of more than 25 vehicles
Florida No Available to anyone with a net unencumbered worth of at least $40,000 and financially responsible for potential losses
Georgia No Available for owners of one or more vehicles
Hawaii No Available to any motor vehicle owner
Idaho $50,000 of which $15,000 is for property damage up to a maximum of $120,000 for five or more vehicles. For owners of more than 25 vehicles
Illinois No For owners of more than 25 vehicles
Indiana Before July 1, 2018, $40,000 in cash or securities that may legally be purchased by savings banks. Beginning July 1, 2018, $50,000 in cash or securities that may legally be purchased by savings banks. No
Iowa No For owners of more than 25 vehicles
Kansas No For owners of more than 25 vehicles
Kentucky No For owners of more than 25 vehicles
Louisiana $55,000 For owners of more than 25 vehicles
Maine No Available to owners of one or more vehicles
Maryland No No
Massachusetts $40,000 No
Michigan No For owners of more than 25 vehicles
Minnesota No For owners of more than 24 vehicles
Mississippi $15,000 No
Missouri $60,000 No
Montana No For owners of more than 25 vehicles
Nebraska $75,000 For owners of more than 25 vehicles
Nevada No For owners of more than 10 vehicles
New Hampshire n/a n/a
New Jersey No For owners of more than 25 vehicles
New Mexico $60,000 Available to any vehicle owner
New York $25,000 For owners of more than 25 vehicles
North Carolina $85,000 For owners of more than 25 vehicles
North Dakota No Available to any vehicle owner
Ohio $30,000 For owners of more than 25 vehicles
Oklahoma $75,000 For owners of more than 25 vehicles
Oregon No For owners of more than 25 vehicles
Pennsylvania No Available to any vehicle owner
Rhode Island $75,000 For owners of more than 25 vehicles
South Carolina $35,000 For owners of more than 25 vehicles
South Dakota $25,000 For owners of more than 25 vehicles
Tennessee $65,000 For owners of more than 25 vehicles
Texas $55,000 For owners of more than 25 vehicles
Utah $160,000 For owners of more than 24 vehicles
Vermont $115,000 For owners of more than 15 vehicles
Virginia $50,000 For owners of more than 20 vehicles
Washington $60,000 For owners of more than 25 vehicles
West Virginia No For owners of more than 25 vehicles
Wisconsin $60,000 For owners of more than 25 vehicles
Wyoming $25,000 For owners of more than 25 vehicles
Source: Property Casualty Insurers Association of America

Buying car insurance is the best route to drive legally for most people. If you're looking for cheap car insurance, some of the ways to get it are to:

  • Compare quotes from multiple companies.
  • Buy your auto and home insurance (or renters insurance) from the same company, for a bundling discount.
  • Ask your insurance agent to review the available car insurance discounts to make sure you're getting all the price breaks you're entitled to.