Most states require drivers to have auto liability insurance before they can legally drive a car. (Liability insurance pays the other driver's medical, car repair and other costs when the policyholder is at fault in an auto accident.) All states have laws that set the minimum amounts of insurance or other financial security that drivers have to pay for the harm caused by their negligence behind the wheel if an accident occurs. The public generally supports compulsory auto insurance and wants these laws enforced.

Liability insurance is compulsory in 49 states and the District of Columbia. Only New Hampshire does not have a compulsory auto insurance liability law. In Wisconsin, the budget bill enacted in June 2009 makes liability insurance compulsory on June 1, 2010. Laws in most states have proven ineffective in reducing the number of drivers who are uninsured. There are many reasons for this. Some drivers can't afford insurance and some drivers with surcharges for accidents or serious traffic violations don't want to pay the high premiums that result from a poor driving record. With the estimated percentage of uninsured drivers in the United States close to 14 percent, it is costly to track down violators of compulsory insurance laws. And unless the odds of getting caught are high and the penalties severe, drivers will continue to flout the law.

A handful of states have passed laws and begun to develop and implement online auto insurance verification systems to identify uninsured motorists. These systems require insurers to maintain up-to-date databases of insured motorists that can be accessed by law enforcement officers instantly when motorists are stopped for traffic infractions.