The History Of Mandatory Car Insurance

No matter where you live in the United States, if you drive, you’re probably going to have to carry auto insurance. You can legally live in a home that is uninsured, but when it comes to the road, you’re not just responsible for your own safety, but also for the safety of everyone else with whom you share this country’s highways and city streets. But where, when and how did auto insurance become mandatory?

Connecticut, 1925

The need for mandatory auto insurance started to become more and more apparent in the first few decades of the Twentieth Century. Twenty years prior, an automobile was a novelty, sharing roads with horses and carts. By 1925, cars became more common, and so did auto accidents.

In 1925, Connecticut passed a law requiring anyone owning a vehicle to be able to cover at least $10,000 in damages. If one could not pay for these damages out of pocket, they could buy a liability policy. Around the same time, Massachusetts passed the first compulsory insurance law: Even if you could cover the damages out of pocket, you still had to buy insurance. Massachusetts would not allow drivers to register their vehicle without liability protection.

As late as 1956, however, Massachusetts stood alone in maintaining a compulsory insurance law. Over the next twenty years, the rest of the country would fall in line — starting with North Carolina in 1957. This may be one of the most surprising details in the history of auto insurance: The first and second compulsory insurance laws were passed thirty years apart. It took three decades for the rest of the country to catch up to Massachusetts.

Today, New Hampshire is the only state where a driver is not necessarily required to carry car insurance. However, New Hampshire will hold the at-fault driver responsible in the event of an auto accident — the same as any other state. So, just because it is legal to drive in New Hampshire without insurance doesn’t mean it’s smart.