In 2024, California, North Carolina, Virginia, Maryland and Utah imposed new legislative changes that will affect car insurance in 2025. As a result of these changes, some drivers might face higher car insurance premiums.
If you live in one of these states, it’s important to understand the new legal mandates, including what has changed and how it could impact your auto insurance policy in the year ahead.
- California’s minimum coverage limits increased to 30/60/15 on January 1, 2025.
- Starting on July 1, 2025, drivers in North Carolina will be required to carry at least 50/100/50 in liability coverage.
- Virginia’s minimum coverage requirements increased to 50/100/25 for policies issued or renewed after January 1, 2025.
California raises the minimum liability insurance requirement
Beginning on January 1, 2025, California’s minimum coverage limits increased to 30/60/15. That translates to $30,000 in bodily injury liability coverage per person, $60,000 in bodily injury liability coverage per accident, and $15,000 in property damage liability coverage per accident.
“California is long overdue for increasing its insurance minimums from 15/30/5,” says Miguel Custodio, a personal injury attorney based in Los Angeles, California. “The old minimum car insurance requirements hadn’t changed since 1976 when a brand new Ford Pinto cost about $2,600. And with current health care costs, the old $15,000 bodily injury coverage limit wouldn’t even pay for a broken arm today.”
Because California is increasing the minimum coverage requirements, many Californians will pay higher premiums this year. For California drivers who currently have state minimum auto insurance, their policies will automatically renew with the new minimum coverage limits.
California is revising its auto insurance requirements in 2025—here’s what you need to know
North Carolina increases its financial responsibility law
North Carolina also is increasing the minimum financial responsibility laws. Starting on July 1, 2025, drivers in North Carolina will be required to carry at least 50/100/50 in personal liability insurance, a big increase from the old requirements of 30/60/25.
Additionally, North Carolina drivers must carry underinsured motorist insurance (UIM) with limits that match their bodily injury coverage. The minimum UIM bodily injury liability requirements will increase to 50/100 in 2025.
North Carolina’s new minimum coverage requirements will provide significantly more financial protection for drivers in the state. However, North Carolina drivers can also expect to pay higher insurance premiums in 2025 if they carry minimum coverage.
Exact rate increases will depend on personal factors, like location, insurance company, age and claim history.
Virginia mandates auto insurance and raises minimum coverage limits
Until recently, Virginia was one of only two states that didn’t require traditional car insurance. Instead of buying an auto insurance policy, drivers could pay a $500 uninsured motor vehicle fee if they registered their car but didn’t insure it.
But as of July 1, 2024, all drivers in Virginia must have car insurance. This change was made to reduce the number of uninsured drivers on the road.
Virginia drivers must also carry higher liability coverage limits. The minimum coverage requirements will increase to 50/100/25 for policies issued or renewed on or after January 1, 2025. Virginia’s old requirements are 30/60/20, so the new policies will provide much more protection for third-party bodily injury claims.
With these changes, Virginia drivers could see car insurance rate increases in 2025, especially for drivers who once opted for the $500 uninsured motor vehicle fee. However, Virginia has historically had lower car insurance premiums than the U.S. average.
Maryland changes the way car insurance policies are reported
Maryland’s state legislature recently voted to change how insurance companies are required to report policies to the Maryland Motor Vehicle Administration (MVA).
Starting on January 1, 2025, the MVA transitioned from daily reporting of new, canceled and reinstated policies to a weekly reporting schedule. The weekly Book of Business (BOB) will contain insurance records for all registered vehicles in the state. With this new system, the MVA will be able to receive the most current policy information for registered cars.
As part of this new requirement, Maryland insurance companies must also use the Online Insurance Verification (OLV) system, which provides real-time verification of an insurance policy’s status on any given day.
These new laws mostly apply to Maryland car insurance companies rather than consumers. Under this law, drivers shouldn’t see increases in their premiums or changes to their policies.
Utah requires higher state minimum liability limits
Utah changed its auto insurance requirements as of January 1, 2025. The new minimum coverage limits for liability insurance increased to 30/65/25.
For Utah drivers who currently have auto insurance, their policies will automatically renew with the new coverage limits. No action is required on the driver’s part. However, with the new coverage requirements, Utah drivers will likely face higher premiums starting next year.
The overall impact of new legislation on consumers
New car insurance laws could impact U.S. drivers in a few crucial ways, particularly regarding the cost of coverage.
Many drivers could pay higher premiums in states raising their minimum coverage requirements. The exact rate increase will depend on the state, insurance company and personalized factors. Some drivers could see a very small increase (or no increase), while others could see more significant rate hikes.
A state minimum coverage policy will still be the cheapest policy available. However, liability-only policies have limited coverage. A full coverage policy with collision insurance, comprehensive insurance and medical payments coverage provides more financial protection.
Additionally, if car insurance rates continue to rise significantly, more drivers might need to use state assistance programs. Some states, like California’s Low-Cost Auto Insurance Program, offer an alternative car insurance option for drivers who can’t get affordable coverage on the voluntary market.
However, increasing minimum coverage limits will also positively impact drivers. When all drivers are required to carry higher coverage limits, it provides more protection in the event of an accident. Everyone will be safer on the road in states that now have higher liability coverage requirements.
Future predictions for 2025 and beyond
Increasing minimum coverage laws was one of this year’s biggest state car insurance trends. In 2025, more states could follow suit.
“The trend of states increasing their minimum coverage requirements will likely continue,” says Kyle Bailey, an associate attorney with McCready Law, a personal injury firm in Chicago.
Bailey says that the cost of vehicle repairs has increased even more than overall inflation in the past few years. Healthcare costs have also risen substantially since the last time most states increased their minimum coverage requirements.
“Given that the current limits are no longer adequate to cover the expenses of a moderately significant collision, raising the minimum coverage requirements has become a necessity for many state governments,” Bailey says.
Adam Smallow, president and client experience officer at Maryland-based Adam Smallow Injury Lawyers, explained that Maryland is expected to raise its minimum coverage limits soon.
“It’s anticipated that the upcoming 2025 legislative session in Maryland will result in some substantial changes to the auto claims arena, including increasing the minimum policy limits, which is currently at $30,000 to potentially $50,000 or more,” Smallow says.
One of the main reasons for increasing the minimum coverage requirements is to match the laws in nearby states.
“This year, the neighboring states of Virginia and North Carolina both increased their minimum auto insurance limits from $25,000 to $50,000. This would be a long overdue increase for Maryland drivers,” Smallow says.
Tips for consumers navigating premium increases
If your car insurance premium is increasing for 2025, you might be wondering how you can reduce your premium. Here are some tips for navigating premium increases and lowering your car insurance costs:
- Look for discounts to lower your rate: Most insurance companies offer discounts that reduce your premium. You can often find discounts for good students, claim-free drivers, safe vehicles, taking a defensive driving course, paying in full and signing up for autopay.
- Bundle multiple policies with the same company: If you need multiple insurance policies, bundling your coverages can help you save money. For example, purchasing your car insurance and home insurance from the same carrier could help you get a lower premium on one or both policies. Adjust your coverages: Adding endorsements to your car insurance policy will raise your premium. Consider whether you can drop optional coverages you no longer need, like rental car reimbursement or custom parts coverage, to lower your rate.
- Compare quotes from other companies: Car insurance costs differ for every driver. If your rate is going up in 2025, shop around and get quotes from other insurance companies. You might find that a different insurer can offer you the same policy at a lower rate than you currently pay.
Final thoughts
As more states raise their minimum coverage requirements, drivers could see even more significant premium increases than they’re already experiencing. It will be more important to shop around and compare rates, take advantage of discount opportunities and look for ways to lower rates, like enrolling in telematics programs.
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Laura Longero
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Laura Longero is an insurance expert and Executive Editor at CarInsurance.com, where she specializes in helping consumers navigate the complexities of the financial and insurance industries. She has 15 years of experience educating people about finance and car insurance. Prior to joining CarInsurance.com, she worked as a reporter and editor at the USA Today Network. Her expertise provides readers with practical guidance, helping them make informed choices about their financial and insurance needs.
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