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What Qualifies as State Minimum Insurance?

What does state minimum mean?

September 2, 2020
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Written byChris StyrskyChief Actuary
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Clever insurance commercials that feature oddball characters or scenarios often leave consumers with nothing more than a few laughs. Phrases like "state minimums" are thrown around leaving viewers to guess what the term actually means. But advertisers aren't entirely to blame. It's nearly impossible to explain 50 "state minimums" in less than 15 seconds. 

While we won't provide a rundown of the differences in all 50 states in this post, we will share what the term means in Arizona, Illinois, Missouri, Ohio, and Texas. 

Disclaimer: Required state minimum insurance laws change. Always consult with a qualified insurance professional to discuss your coverage options. 

Arizona State Minimum Insurance

Car Insurance

On July 1, 2020, liability minimums in Arizona increased, requiring drivers to have 25/50/15 liability coverage. Arizona car insurance policies must have:

  • At least $25,000 (previously $15,000) for one person's bodily injury or death in an accident, 
  • At least $50,000 (previously $30,000) for two or more persons sustaining injuries or death in an accident, and 
  • At least $15,000 (previously $10,000) for damage to others' property.

Beware that your renewal premiums will most likely increase in response to the required increase in coverage. 

Homeowners Insurance

If you’re an Arizona homeowner with a mortgage, your lender will almost always require you to have an insurance policy for at least the amount of your loan. However, it’s important to consider if this recommended amount is too little or too much for your individual circumstances. If you live in a home that has as a pool, steep stairs, or trampoline, consider higher coverage amounts to protect your assets in case of an accident.

Illinois State Minimum Insurance

Car Insurance

Illinois drivers are required to have Liability coverage, Uninsured Motorist Bodily Injury coverage, and Underinsured Motorist Bodily Injury insurance.

Liability insurance is broken down into two categories. 

  1. At least $25,000 per person and $50,000 per accident for bodily injury
  2. At least $20,000 per accident for property damage 

Uninsured Motorist Bodily Injury Coverage carries the same per person, per accident minimum limits as liability coverage. It can cushion the financial blow if the accident is caused by a hit-and-run driver or a driver with no auto liability insurance.  

Underinsured Motorist Bodily Injury Insurance also carries the same per person, per accident limits as liability coverage. It can help cover the financial gap if the at-fault driver carries an insufficient amount of insurance.

Homeowners Insurance

In Illinois, most mortgage lenders will require homeowners to not have only insurance, but also to list them as the mortgage lender on the policy. Your minimum insurance coverage will depend on your specific situation. However, it should always equal at least 80% or even the full replacement cost of your home. 

Missouri State Minimum Insurance

Car Insurance

Missouri vehicle owners and drivers must carry two types of auto insurance to provide protection regardless of who is at fault.

  1. Liability insurance covers injuries and damage caused to others by you. Missouri follows the 25/50/10 coverage policy. This means your policy must cover at least $25,000 per person and $50,000 per accident for bodily injury and at least $10,000 coverage for any property damage liability. 

  1. Uninsured motorist insurance covers injuries caused to you (and any of your passengers) by an uninsured driver. State law requires that your policy covers at least $25,000 for bodily injury per person and at least $50,000 for bodily injury per accident. 

Homeowners Insurance

Missouri doesn’t require you to have homeowner's insurance, but your loan lender may require you to purchase a policy that covers at least your mortgage payment. It's important to remember that the more coverage you have means the less you will have to pay out-of-pocket if something happens on your property, so don’t automatically go with the cheapest policy.

Ohio State Minimum Insurance

Car Insurance

Ohio drivers must have insurance or other proof of financial responsibility, i.e. a bond from the Ohio Bureau of Motor Vehicles. Coverage minimums are set at $25,000 per person and $50,000 per accident for bodily injury liability coverage, in addition to at least $25,000 for property damage liability coverage. 

Homeowners Insurance

If you carry a mortgage, the bank will require you to insure your house for at least the amount of your loan or at least 80% of the replacement cost. For example, if your home's replacement value is $200,000, the minimum coverage your policy must have is $160,000. 

Texas State Minimum Insurance

Car Insurance

Texans must have at least 30/60/25 car insurance coverage. This means drivers and vehicle owners must have at least $30,000 of coverage for injuries per person, up to $60,000 per accident, and at least $25,000 of liability coverage for property damage. 

Homeowners Insurance

Texan homeowners are not required to have homeowner's insurance. But if you don't own your home free and clear, your lender will require you to have adequate coverage. There's no universal minimum for homeowner's insurance. 

Before deciding on car or home insurance coverage, evaluate your assets and what you could lose in a claim. Remember that more coverage may provide greater financial protection. Conversely, knowing the minimum requirements for your state can help you avoid overspending on insurance. 

If you live in one of the other 45 states, read about your state's minimum insurance requirements at your state's Department of Insurance website. Simply enter "State Name"+ department of insurance in the search bar. Your state's Department of Insurance website should end in ".gov".

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