Upcoming 2025 Changes: How New State Minimum Car Insurance Laws will Impact Your Premiums

As of January 1, 2025, several states have updated their minimum car insurance requirements. Virginia, Utah, North Carolina and California have all increased the amount of liability coverage one must carry to drive legally.

Some consumers will not see a dramatic increase in their insurance prices, especially if they already buy more than the state minimum car insurance requirements.

However, if you usually buy the lowest amount of liability coverage, you will probably notice a significant price increase. This is critical information for those of us who live on a tight budget!

As always, the experienced team of licensed insurance agents at Einsurance is ready to help consumers understand and navigate these changes. This article offers unbiased, readable information to help you understand updated auto insurance minimums.

Keep reading to learn about:

State-by-state car insurance updates in 2025
What is liability coverage? How does it work?
Why state minimum auto insurance requirements are changing
The impact of new insurance laws on premiums
Ways to save on car insurance

Let’s begin with a look at each state and their updated requirements.

State-by-State Car Insurance Updates in 2025

Here, we explore the four states with new minimum insurance requirements.

California Car Insurance Law Changes

In 2025, California doubled and tripled the amount of liability coverage needed to drive legally, with Senate Bill 1107. And consumers should be aware that under this bill, auto insurance prices will increase again in the future.

California’s minimum liability coverage went from “15/30/5” to “30/60/15.” That means a driver must have liability coverage that pays up to:

$30,000 for the injury or death of a person
$60,000 for the injury or death of more than one person
And $15,000 worth of coverage for property damage

This state’s minimum car insurance requirements will increase again in 2035. At that time, the minimum amounts of required liability insurance will increase by $20,000 and $40,000 for bodily injury or death of one person and all persons, respectively, and by $10,000 for property damage. New totals will be “50/100/25,” a decade from now.

Utah’s Car Insurance Law Changes

Utah’s 2025 car insurance law changes are revisions to HB 0113. In short, Utah residents must now buy liability coverage of “30/65/25.”

That is:

$30,000 of liability coverage for bodily injury or death of a person
Up to $65,000 coverage for injury or death of multiple people (this number has not changed)
And $25,000 of liability coverage for property damage

This is a smaller, but still meaningful, update to car insurance laws in UT. Previously, they were, “25/65/15.”

And remember, Utah is a “no fault” insurance state, which also requires drivers to carry Personal Injury Protection (PIP) insurance of at least $3,000. This has not changed in 2025.

North Carolina’s New Auto Insurance Minimums

North Carolina’s new liability requirements are significant. NC residents must now carry “50/100/50.”

We’re talking about:

$50,000 liability coverage for injury or death of one person
Up to $100,000 for injuries / deaths of several people in one accident
And $50,000 property damage coverage

Drivers must also maintain some coverage for uninsured / underinsured motorists.

Virginia’s New Auto Insurance Requirements in 2025

Virginia state minimum car insurance requirements are also increasing, to “50/100/25.” Virginia lawmakers passed this measure in 2021, with SB1182.

VA drivers will now need:

$50,000 coverage for injury or death of one person
Up to $100,000 for injuries / fatalities of more than one person in a single accident
And $25,000 liability coverage for damage done to property

This is another meaningful increase in coverage, which was “30/60/20” in the past.

Now that we’ve covered state-by-state car insurance updates, we can move on to a better understanding of liability coverage on your auto policy.

What is Liability Coverage? How Does it Work?

Liability coverage may be the most expensive part of your auto policy. Its purpose is to cover you, the owner or driver of a vehicle, from paying for harm you might cause to other people or your property.

What is Covered by the Liability Portion of my Auto Insurance Policy?

Every state has slightly different laws, with a few nuances. But in general, the liability portion of your auto insurance would help pay for:

Damage to other vehicles, from little fender benders to major accidents
Injuries, doctor bills and medical care for someone injured in an accident you cause
Funeral bills for someone who passes away in an accident you cause
Damage to property outside your vehicle, like fences, landscaping, bicycles and so on

Issues Not Covered by Liability on an Auto Policy

“Liability only” policies cover only the state minimum requirements to drive legally in your state. They do not pay for:

Damage you cause to your own vehicle in an accident
Theft of your vehicle
A total loss of your vehicle in a fire or flood
Theft of expensive items in your vehicle, like a laptop, purse or guitar
Any damage caused by outside factors, like a tree branch falling on your car

Many Lienholders Require More than a Liability-Only Policy

If you make a payment on your vehicle, you will need more than a liability-only policy. That’s because the bank or credit union needs to know they’ll be repaid if your vehicle is stolen or totaled. Many insurers offer new car policies or similar packages that will include coverage for collision, theft and so on.

How Liability Coverage Works

Liability coverage will only pay up to the coverage limits. That’s why we’re seeing car insurance law changes in 2025.

Thanks to inflation and rising prices, improving technology, increasing medical costs and a generally litigious society — that is, Americans are quick to sue for a fast payout — car accidents cost more than ever.

And while modern autos are often built with new safety features, they’re also faster, and in some cases heavier, than vehicles in our past. Ultimately, they can cause more damage, which costs even more to repair.

Remember, the liability part of your insurance will only ever pay up to the policy limits. Sometimes these insurance concepts are best illustrated with a story, so let’s imagine a scenario now.

Liability Claims & Limits: Traci’s Story

Traci is a middle-aged mom on her way home from work in Virginia. She’s driving her older commuter vehicle, a 2005 Nissan Altima, valued at $3,000. This car has been paid off a long time, and she only maintains the state minimum car insurance requirements, of “50/100/25.”

Somewhere ahead, a deer dashes on to the road. Just in front of Traci, a brand-new Toyota Camry, valued at $40,000, slams on their brakes. Traci rear-ends the vehicle quite hard, jostling the family inside and causing considerable damage to both cars, and injuring Traci’s neck.

The drivers pull off to the side of the road and exchange insurance information. While no one in the Camry seems badly hurt, they head off to the emergency room, just in case.

Traci’s liability insurance will cover:

The medical costs of the family in the Camry, up to $100,000
The damage caused to the Camry, up to $25,000

It will not cover:

Damage to Traci’s Nissan
Traci’s neck injuries

Ultimately, Traci’s Nissan is totaled, because repair costs are more than the value of the car. The Camry is repaired and the family’s ER visit is covered. They don’t get to sue Traci in court, because they didn’t suffer any monetary losses.

When Liability Coverage Falls Short

Now, imagine that story differently.

Imagine all four people in the Escalade are badly hurt. They all need ambulance rides, immediate surgeries, ongoing medical care and physical therapy.

In that case, Traci’s $100,000 liability may or may not be enough coverage. The Camry family will be able to sue Traci for their losses. And ultimately, that’s why state minimum auto insurance laws are changing now.

Why State Minimum Auto Insurance Requirements are Changing

As we mentioned above, issues like inflation and rising repair costs, more advanced vehicles, heavier and faster vehicles, and a “sue happy” society, all lead to financial ruin when drivers don’t have enough liability insurance.

Even with the minimum requirements covered, the losses of others can still lead to a lawsuit for at-fault drivers.

The Impact of New Insurance Laws on Premiums

If you live in CA, VA, UT or NC, your auto insurance premiums will almost certainly increase. The only exceptions may be if you already purchase more than the state minimum of insurance or have many policies with one insurer.

However, you can think of it this way: you’re paying a bit more for insurance, but you have more coverage in case of an accident. The chance that you’ll get sued and lose everything is smaller.

That’s the “upside.” On the downside, the increasing costs of insurance may bring some financial hardship to consumers, especially in the challenging economy we’re enduring in January 2025. Some experts believe these increasing costs may lead people to drive without insurance.

Will Increasing Auto Insurance Prices Lead to More Uninsured Drivers?

It’s too early to tell, but as experienced auto insurance agents, we believe more drivers may take the risk of driving uninsured. Remember, this is both illegal and immoral, not a chance worth taking.

You’re better off trying to save some money on your car insurance, and at Einsurance.com, we might be able to help.

Ways to Save on Car Insurance

Shop Around

If your state is changing auto insurance requirements, there will be a lot of shuffling in the industry.

That means certain insurers are looking for customers just like you! Whether you’re an inexperienced teen driver, a senior driver, own a new car or an old one, there’s probably a company out there looking specifically for your business.

Try our handy online quoting tool, to see for yourself. We aim to match consumers with the right insurers.

Consider a Price-Per-Mile Policy

“Pay per mile” car insurance policies are a good fit for certain people. If you only drive a few thousand miles per year, or if you have several vehicles and some stay garaged all the time, this might be a good choice.

Price-per-mile auto policies might be ideal if you:

Work from home, or mostly from home
Drive very little
Are fully retired and stay home
Have a new hot rod that lives in the garage all the time

Lower Your Deductibles on Full Coverage Policies

Liability-only policies do not include deductibles. However, if you have several vehicles and some full coverage policies, you can save some money by increasing your deductibles.

Of course, higher deductibles mean increased out-of-pocket costs after an accident.

That means you should be comfortable paying any new deductible. So, if you don’t keep $5,000 in the bank, don’t select a $5,000 deductible! Also, remember that lienholders — banks, credit unions, etc. — usually stipulate drivers must buy a policy with a certain deductible. It may be $500, $1,000, and so on. You must keep whatever insurance your lienholder describes in your auto loan contract.

Update your Policy with New Discounts

Some insurers offer various discounts for teachers, nurses, insurance agents, good students, and so on. Contact your insurance agent to ask about any possible discounts you might be missing, especially if you made career changes recently and didn’t think to inform your insurer.

Whittle Down the Bells and Whistles

Read your auto insurance policy closely. Ask yourself, “Do I need each of these coverages?”

For instance, if you own three vehicles, maybe you don’t need rental car coverage on all of them. And if you’re part of an auto club like AAA, maybe you don’t need roadside assistance coverage. Then, call your insurer to talk about removing these extra costs.

Take a Driving Course

And finally, consider taking a defensive driving class. These courses can help you reduce your price for car insurance by 10% or more over a period of a few years. They’re worth the time and money, especially now that you can complete these courses online.

Learn More at Einsurance.com

We hope you enjoyed our discussion on the changing auto insurance requirements in 2025. We enjoyed writing it! Be sure to check out the rest of our insurance journal for more unbiased content for consumers.