Drivers in several U.S. states are set to experience higher car insurance premiums in 2025 as new legislation increases minimum coverage requirements. States including California, North Carolina, Virginia, Maryland and Utah are updating their auto insurance laws, with most changes aimed at providing better financial protection in the event of an accident.
California’s minimum coverage limits, which haven’t changed since 1976, will double on Jan. 1, 2025, to $30,000 for bodily injury liability per person, $60,000 per accident, and $15,000 for property damage.
“The old minimum car insurance requirements hadn’t changed since 1976 when a brand-new Ford Pinto cost about $2,600,” Miguel Custodio, a personal injury attorney in Los Angeles, told CarInsurance.com. “The old $15,000 bodily injury coverage limit wouldn’t even pay for a broken arm today.”
These higher limits mean California drivers with state-minimum auto insurance will see their policies automatically renew with increased coverage, likely resulting in higher premiums.
Similar changes are set for North Carolina, where minimum liability limits will increase to $50,000/$100,000/$50,000 starting July 1, 2025. Drivers in North Carolina will also be required to carry underinsured motorist insurance matching their bodily injury limits.
Virginia, which previously allowed drivers to forgo insurance by paying a $500 uninsured motor vehicle fee, now requires all drivers to carry insurance as of July 1, 2024. Starting Jan. 1, 2025, Virginia’s minimum liability coverage will rise from $30,000/$60,000/$20,000 to $50,000/$100,000/$25,000.
Utah’s new minimums -- $30,000/$65,000/$25,000 -- also take effect in 2025. As with California, Utah policies will automatically renew at the updated limits.
While Maryland’s new laws primarily affect insurers’ reporting practices rather than consumer policies, higher minimum limits are anticipated during the 2025 legislative session.
Financial and Safety Implications
These changes aim to offer drivers greater financial protection, aligning minimum coverage limits with modern health care and repair costs.
“The trend of states increasing their minimum coverage requirements will likely continue,” said Kyle Bailey, an attorney with McCready Law in Chicago. “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.”
However, higher coverage limits come with increased premiums. Rate hikes will vary by state and depend on factors such as location, insurance company and driving history. While a state-minimum policy will remain the most affordable option, drivers may explore state assistance programs like California’s Low-Cost Auto Insurance Program if premiums become unaffordable.
Despite the potential cost increases, experts argue the changes will enhance road safety by ensuring better protection in accidents.
“When all drivers are required to carry higher coverage limits, it provides more protection in the event of an accident,” Bailey noted.
Broader Trends and Predictions
The legislative changes reflect a growing national trend of modernizing insurance laws. States like Maryland are expected to follow the lead of neighboring states such as Virginia, which recently increased their limits.
As vehicle repair and health care costs continue to outpace inflation, more states are likely to adopt similar measures in the coming years. Looking ahead, drivers should prepare for potentially higher premiums as state governments strive to balance consumer protection with affordability.
