Insurance by State

Why Insurance Rules Differ So Much by State

Insurance in the United States is regulated primarily by the states, not the federal government. Each state sets its own minimum requirements, approves (or doesn’t approve) rates, and runs its own programs. Two businesses with identical payroll can face very different obligations simply because they operate on opposite sides of a state line.

The differences are largest for employers. A few examples from our state guides:

• When workers’ comp becomes mandatory. Most states require it from the first employee, but New Mexico starts at three (one for construction), Tennessee at five (one for construction), and Texas lets private employers opt out entirely.
• Who you can buy it from. North Dakota, Ohio, Washington, and Wyoming run monopolistic state funds, while other states have fully private markets.
• How rates are set. In New Jersey, every carrier uses the same approved rate; in loss-cost states such as Maine, carriers apply their own multipliers, so shopping matters more.
• What else is mandatory. New York, New Jersey, and Hawaii add mandatory temporary disability coverage, and Hawaii also requires employers to provide health insurance.

For individuals, the same is true of car insurance minimums, homeowners coverage in disaster-prone states, and health insurance marketplace options. Each category above links to a guide for every state.

These guides are general information, not legal or insurance advice. Requirements change; confirm current rules with your state’s insurance department or a licensed agent. How we research our guides.