A guide to New Hampshire's unique auto insurance laws

Daniel Workman

Auto insurance is not a legal requirement in New Hampshire. In fact, New Hampshire is the only state that does not require drivers to have liability insurance. Yet the Granite State is among the top 20 states with the lowest rates of uninsured drivers.

In 2007, only 11 percent of New Hampshire's drivers decided against buying auto insurance, according to the Insurance Research Council. That figure compares with the national average of roughly 13 percent.

Rules for uninsured motorists

Before allowing residents to drive uninsured, New Hampshire law requires proof of financial responsibility. Currently, you must be able to pay a total of $75,000 for death or injury claims plus property damages arising from a single accident. If you don't buy insurance, one way to prove your financial responsibility is to deposit that full amount with New Hampshire's treasurer either in cash or in approved securities, according to the state's General Court website.

Uninsured drivers who cause a crash in New Hampshire can face steep costs. First, you have to pay for it.

In addition, you must surrender both your driver's license and vehicle registration plates, according to New Hampshire's General Court. Driving privileges remain suspended until you purchase auto insurance for high-risk motorists (which often is expensive) and obtain an SR-22 certificate (a document that proves you have insurance). For three years after the date of the accident, you must carry an SR-22 insurance certificate every time you operate a vehicle on New Hampshire roads.

Buying auto insurance in New Hampshire

Rather than struggle with the administrative and financial hassles that uninsured motorists face, most New Hampshire drivers simply buy auto insurance.

New Hampshire has made three of types of coverage mandatory for those who choose to buy it, according to the state's Insurance Department.

• Liability coverage for losses that others suffer and for which you are legally responsible.
• Medical coverage for health-related expenses resulting from an accident.
• Uninsured motorist coverage for accidents that involve an uninsured or hit-and-run driver.

Should you need the services of a lawyer, liability policies often help cover legal expenses.

New Hampshire law also specifies minimum amounts of mandatory auto insurance coverage. Your liability auto insurance policy must provide at least $25,000 per person for bodily injuries up to $50,000, plus $25,000 for property damages. The minimum amount of medical payment coverage is $1,000. Uninsured motorist coverage always must match amounts under your liability auto insurance policy -- even if you decide to upgrade liability coverage years after that policy was issued.

The previously cited types of auto insurance don't cover damage to your own vehicle. For those losses, you need collision insurance. For damages not related to a collision, you need comprehensive insurance. Without collision or comprehensive insurance, you will have to pay all charges to repair or replace your damaged vehicle.

Lenders who finance the purchase of your automobile may force you to buy collision and comprehensive auto insurance. This protects their collateral if you fail to repay your loan.

Uninsured risks outweigh rewards

Even if you don't cause an accident, a car crash still can rack up expenses. These range from lifesaving surgery to towing expenses.

If you are an uninsured motorist in New Hampshire and are at fault for an accident, you could be forced to fork over $75,000 in assets that you may desperately need for medical care or legal expenses. You could run out of money just when you need it the most.