Though specific car insurance laws vary by state, every state requires that vehicle owners have a minimum level of auto insurance coverage to cover the costs of damages to others or to property in an accident, notes USA.gov. State-specific car insurance laws and minimum coverage amounts are available through the state insurance regulatory agency.
Some states, such as California, have a fault system for accidents and car insurance, while other states follow a no-fault system, explains Nolo. In a fault state, injured parties have few restrictions on their pursuit of compensation from the driver at fault in an accident. The injured person can file a claim with her own insurance policy, seek compensation from the at-fault driver's insurance company or file a lawsuit against the at-fault driver. In no-fault car insurance states, injured people must seek compensation for their medical expenses and lost wages through their own insurance policy, regardless of who was at fault in the accident.
Many states require drivers to keep evidence of the minimum insurance coverage in the vehicle at all times, according to AAA. Most states require a specific minimum amount payable in case of injury or death to one person in an accident, a minimum amount for two or more people and a minimum amount to cover property damage in an accident.