What are the minimum auto liability insurance requirements and why do they matter?

Every U.S. state except New Hampshire requires drivers to carry minimum liability insurance to cover bodily injury and property damage they cause to others. These minimums vary enormously by state. Many states require only $15,000 to $25,000 per person and $30,000 to $50,000 per accident — amounts that are quickly exhausted by serious injuries requiring hospitalization and surgery. When the at-fault driver carries only minimum coverage and your damages exceed those limits, you must look to other sources: your own underinsured motorist (UIM) coverage, the driver's personal assets, an employer's policy if the driver was on the job, or other liable parties. This is why carrying substantial UM/UIM coverage on your own policy is the most important financial protection you can purchase — it fills the gap when the at-fault driver's minimal coverage is insufficient for your actual damages.