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We all know driving can be dangerous, but in some states it’s more dangerous to your wallet than others. If another driver crashes into your car, can you be sure that driver has insurance, and, if so, enough to cover the damages?

The answer to this question varies from state to state. The proportion of drivers with no insurance ranges from a high of 25.9 percent of drivers in Oklahoma to only 3.9 percent in Massachusetts.

There are also significant differences in insurance requirements that can protect your finances after an accident. States require varying amounts of minimum liability coverage, which protects others when a driver causes an accident. States may also require insurance for medical expenses (medical payments coverage or personal injury protection) and coverage to protect you against uninsured or underinsured drivers.

When it comes to uninsured drivers and insurance requirements, is your state safer or riskier? WalletHub crunched the numbers and ranked the 50 states and the District of Columbia. You can find out how your states rates below.

Main Findings

States Ranked from Safest to Riskiest

  “Liability Insurance Requirements” represent (in thousands of dollars) the minimum bodily injury coverage per person, bodily injury coverage per accident, and property damage coverage per accident required.

Under “Other Types of Insurance Required”:

• MPC is Medical Payments Coverage
• PIP is Personal Injury Protection
• UMBI is Uninsured Motorist Coverage for Bodily Injuries
• UMPD is Uninsured Motorist Coverage for Property Damage

There is no correlation between a state’s liability insurance requirements and the percentage of drivers lacking insurance in that state:

Setting minimum coverage requirements at certain levels can affect more than just a driver’s insurance premium. To further educate consumers, we asked a panel of experts to share their insight on the various impacts of high coverage minimums. Click on the experts’ profiles to read their bios and responses to the following key questions:

1. When a state sets higher minimum levels of coverage, does it make the roads safer?
2. When there are higher minimums, how does it affect premiums for safe drivers?
3. When coverage minimums are higher, how does it affect the proportion of drivers who are uninsured?

Peter Crosa

Independent Adjuster, Member of the Executive Committee of the National Association of Independent Insurance Adjusters

When a state sets higher minimum levels of coverage, does it make the roads safer?
I haven't seen any data to support that.  My sense is that if you are damaged by someone with higher limits, that didn't necessarily mean you were rendered safer by the higher limits.  But now, at least, there may be more funds available for your damages.  On the other hand, mandating higher limits may make it unaffordable for some to be properly insured.  If they cause you damage there will be no compensation.
When there are higher minimums, how does it affect premiums for safe drivers?
Safe drivers already tend to have higher limits.  Premiums are more impacted by your driving history and your demographic's experiential history.  Premium vs. higher limits goes down exponentially.
When coverage minimums are higher, how does it affect the proportion of drivers who are uninsured?
It stands to reason that if coverage minimums are higher, an insurance policy become less affordable and therefore you would expect more uninsured drivers.

• Robert Hoyt Department Head and Dudley L. Moore, Jr., Chair of Insurance, Terry College of Business, University of Georgia
• John Cross Part-Time Professor in The Risk Management and Insurance Concentration, Department of Finance, California State University, Fullerton
• Peter Crosa Independent Adjuster, Member of the Executive Committee of the National Association of Independent Insurance Adjusters

Robert Hoyt

Department Head and Dudley L. Moore, Jr., Chair of Insurance, Terry College of Business, University of Georgia

Important to think about here is that statutory minimum levels are still very low compared to the levels that I would advise most policyholders to purchase.  The highest limits which exist in just two states are 50/100/25 which is still below what a financial advisor would recommend.  Most states are 15/30/10 or 25/50/25.  Higher limits with a personal umbrella on top of that with combined limits of $1 million or more is what I advise.  For higher wealth individuals, the umbrella limits should be even higher.  With that in mind, I offer some responses to your questions below.
When a state sets higher minimum levels of coverage, does it make the roads safer?
Requiring individuals to purchase insurance does provide them with a signal of the effects of their choices on the level of risk.  That is, the premium they pay captures the risk profile of the car they drive, the effect of the number of miles they drive, the benefits of driver training for younger drivers, etc. 
However, this is more about requiring that they buy insurance in the first place than the amount of coverage.  Most states either require or at least mandate that uninsured/underinsured motorist coverage be offered.  That coverage is intended to protect insured drivers in cases where the at-fault driver either had no coverage or had inadequate coverage.   
When there are higher minimums, how does it affect premiums for safe drivers?
Again, reducing the percentage of uninsured drivers is more important than the level of liability coverage.  The premium for any driver is based on the exposure that those drivers represent, combined with their past loss experience.  The uninsured/underinsured motorist premium will be affected by the state minimums and the percentage of uninsured drivers.  So state minimums would have some impact on these premiums, but the uninsured rate will be more important than the state minimums.  Also, given the relatively low level of minimum requirements, most insured would still be well-advised to purchase uninsured/underinsured motorist coverage (remember my reference to appropriate levels of coverage for most individuals).
When coverage minimums are higher, how does it affect the proportion of drivers who are uninsured?
There appears to be very little correlation between state minimum insurance requirements and the proportion of uninsured drivers.  The main factors affecting the level of uninsured drivers appear to be the cost of insurance and the level of enforcement of mandatory insurance laws.  The cost of insurance is heavily impacted by the legal environment in the jurisdiction, the degree of urbanization, fraud rates, medical costs, and other factors that are unrelated to the minimum insurance law.

 

John Cross

Part-Time Professor in The Risk Management and Insurance Concentration, Department of Finance, California State University, Fullerton

When a state sets higher minimum levels of coverage, does it make the roads safer?
I am unaware of any studies that would confirm any link. Possessing insurance gives one a way to pay for loss or damage one causes. It doesn't mean that one is a safe driver, nor does having it enhance one's safety. In fact, the "morale" or "attitudinal" hazard doctrine postulates a connection between having insurance and lower incentive to be safe. That is: "I have insurance and it will pay for damage I cause, so why worry about being safe?" 
Motorists do, probably, think about safe driving because they're worried that having an accident could result in a rate increase–and indeed it could; but I doubt that there is any positive connection between raising the required limits of coverage and driver safety.
When there are higher minimums, how does it affect premiums for safe drivers?
It probably has little to no effect. Conceptually, if drivers carry more adequate liability insurance limits, they become more financially responsible for losses they cause. Their uptake of a greater part of this burden, perhaps, relieves the rest of us somewhat from having to take care of our own damages–because they're inadequately insured. But then again, if society raises the liability insurance limits required to drive legally, some currently insured motorists won't be able to afford the higher liability insurance premiums, and will elect to drive without insurance–increasing the number of financially irresponsible motorists (those who don't have enough insurance to pay for damage they cause). Given this, it's probably a "wash," and higher limits would probably have little effect for safe drivers.
When coverage minimums are higher, how does it affect the proportion of drivers who are uninsured?
The law of supply and demand states that higher prices (which will correspond with higher liability limits), all else being equal, will reduce the quantity demanded of any product. Thus, require higher liability limits and the resulting premium increase will reduce the quantity of liability insurance demanded, which means that some insured persons at the margin (already close to not being able to afford liability insurance) will either elect or be forced not to carry liability insurance, increasing the proportion of uninsured drivers.

This is a really interesting social problem that's been with us ever since the introduction of the private passenger auto. Conceptually, why should people be allowed to drive when they don't have the ability to pay for the damage they cause, i.e., they are either uninsured or they carry such low liability limits that they're nearly uninsured, or at least inadequately insured for the loss exposure they present. Yet pragmatically, a car is practically a necessity and people will find a way to drive, whatever the law does or does not require in regard do insurance. So society can say and do whatever it wants, motorists will still drive–and many times will be uninsured or inadequately insured. 
The "driverless" car should help out a lot here. Perhaps we'll shift, as a society, to a driverless "Uber" environment, when you don't own a car but just summon a driverless car when you need one. That'd be so much of a better world for so many reasons it's hard to fathom! We'd warehouse fewer cars, let alone eliminate drunk driving, texting while driving, driving by very poor drivers, etc. In that case, it would seem that auto insurance would probably shift from personal insurance to commercial insurance and society could require adequate limits on the part of the commercial entity that owns the cars, and also there should be fewer accidents with a driverless car.

Methodology

1. Ranking liability car insurance to protect others

   • Bodily Injury Liability Insurance (per person): 1 point for every $5,000 of required coverage.
   • Bodily Injury Liability Insurance (per accident): 1 point for every $10,000 of required coverage.
   • Property Damage Liability Coverage: 1 point for every $5,000 of required coverage.
   • Points for each of the three insurance types above were added together to determine rankings for this category.

2. Ranking other forms of insurance to protect you and your car

   • Medical-Related Coverage: 6 points if personal injury protection or medical payments coverage is required.
   • Uninsured/Underinsured Motorist Coverage: 3 points for uninsured bodily injury coverage and 3 points for uninsured property damage coverage is required, for a total of 6 possible points.
   • Points were added together for a total possible 12 points for this category.

3. Ranking the percentage of uninsured drivers in each state

   • The Insurance Research Council published estimates of the proportion of uninsured drivers in each state in 2012. This data was used to calculate a score ranging from 0 to 25. A state with no uninsured drivers would get a perfect score of 25. A state with 25 percent or more uninsured drivers would get a score of 0.

4. Overall ranking

   • Points for all three categories above were summed together to determine an overall safety ranking by state.

5. New Hampshire, New Jersey and Virginia insurance requirements

   Three states give drivers additional options besides the standard minimum requirements, but in all three states few drivers choose them, so they are not reflected in the table above or the rankings.
   • New Hampshire drivers have the option to decline insurance, provided they can demonstrate that they have adequate funds to cover expenses arising from an accident.
   • Virginia drivers have the option to pay a $500 annual uninsured motor vehicle fee in lieu of obtaining auto insurance.
   • New Jersey drivers can choose a “basic policy” that includes no bodily injury liability coverage, $5,000 of property damage liability coverage, and personal injury protection; however, over 98 percent of New Jersey policies are “standard policies” with the minimums shown above.

Sources: Data for insurance requirements were obtained from state insurance departments. Uninsured driver estimates are from an Insurance Research Council study published in “Uninsured Motorists, 2014 Edition.”