Auto insurance system in the US and Ukraine: key differences and cost of policies

The American and Ukrainian auto insurance systems differ in structure, coverage, and policy cost. Find out how mandatory auto insurance works in the USA and Ukraine, what policies are needed for full protection, and how much insurance costs in each country

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The American insurance market is considered one of the most developed in the world, and its approaches to auto insurance differ significantly from the Ukrainian system. The Motor (Transport) Insurance Bureau of Ukraine decided to analyze how compulsory motor third party liability works in the USA and how it differs from the Ukrainian insurance system. The results turned out to be quite interesting.

How does compulsory motor insurance work in the USA?

In the United States of America, the basis of compulsory motor insurance is liability insurance - insurance that covers the driver's liability to other road users. It consists of two main components.

- Bodily Injury Liability (BI)

In the event of an accident, this policy actually covers the costs associated with the treatment of the injured. This includes not only first aid, but also further rehabilitation, compensation for damage to health, and other related costs. Thus, the state guarantees that the injured party will not be left without support.

- Property Damage Liability (PD)

The second mandatory element covers material damage, i.e. property damage. Most often, this is car repairs, but in certain cases, payments can also be extended to infrastructure - fences, buildings or road structures.

It is important that in the USA each state forms its own minimum coverage limits. Because of this, the rules can differ dramatically depending on where the driver plans to use the car.

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What happens if the person at fault in the accident does not have a policy in the USA?

Unlike the Ukrainian system, the basic American auto insurance does not cover damages if the person at fault in the accident was uninsured or fled the scene. To protect themselves in such cases, drivers take out additional policies.

- Uninsured Motorist (UM)

This policy actually "picks up" the situation where the basic insurance is already powerless. It provides compensation if the at-fault party did not have current insurance coverage or left the scene of the accident. UM can cover both medical expenses and vehicle damage, but the payout structure depends on the specific package.

- Underinsured Motorist (UIM)

Sometimes the at-fault party has insurance, but its limits simply are not enough to fully compensate for the damage. That’s where UIM comes in—a supplemental policy that covers the difference between the amount of damage and the other party’s basic insurance limit.

In some states, such as New York, Illinois, and Maryland, UM and UIM are mandatory. In others, they are optional, but drivers often include them in their packages because it significantly increases the level of protection.

Cost of car insurance in the USA

According to NerdWallet (October 2025), the average cost of insurance for an American driver is as follows:

- A full insurance package with extensive coverage costs an average of $ 2,308 per year. Such a policy usually includes liability, own car coverage, UM / UIM and other advanced options.

- The minimum mandatory package costs about $ 627 per year. This is the basic level of insurance required by a particular state.

At the same time, drivers with an accident history or young car owners almost always pay significantly more - sometimes the amounts can reach several thousand dollars annually.

How is the MTPL system organized in Ukraine?

The Ukrainian MTPL policy has a more unified structure and is much more affordable.

The average price of an “auto citizen” policy in Ukraine is UAH 3,114.79, which is approximately equal to $76 per year.

On the Visit Ukraine portal, you can quickly and easily calculate the cost of the policy using a convenient online calculator. Just enter the basic data - and the system will immediately show all available options.

In addition, unlike the American system, in Ukraine:

1. The basic package already includes protection in the event of an accident if the culprit is uninsured;

2. Payments are guaranteed by MTIBU even in the event of the bankruptcy of the insurance company;

3. The rules are the same for the entire country - there is no difference between regions or the place of registration of the car.

This makes the Ukrainian system transparent, predictable and accessible to most drivers.

Read also: When can they refuse to pay for a motor vehicle accident and how to appeal?

We have previously discussed what to do if the at-fault party left the scene of a traffic accident and how to obtain insurance compensation in such a case in Ukraine.

Comparison of auto insurance systems in the USA and Ukraine

The key differences between the American and Ukrainian auto insurance systems are as follows:

1. Regulations and minimum limits

In the USA, each state determines them separately, so the basic requirements can differ significantly. Ukraine has a single centralized system with the same rules for all drivers.

2. Coverage of losses from an uninsured driver

An American driver must additionally purchase UM/UIM if he wants to be protected. In Ukraine, this protection is already included in the standard policy.

3. Cost

American insurance policies are many times more expensive. Even the basic minimum in the USA significantly exceeds the average cost of Ukrainian MTPL.

4. Approach to the insurance market

The US market offers a huge number of options, allowing you to create individual packages. The Ukrainian market focuses on accessibility and guarantees, so the system is more simplified.

The American car insurance model looks larger and more flexible, but it requires much higher costs and constant analysis of conditions in a particular state. The Ukrainian system, on the contrary, is focused on stability, a single structure of rules and protection of motorists in standard situations.

For drivers planning to travel or move to the USA, it is important to consider not only the price of insurance, but also what risks a particular package covers.

Planning to take out car insurance? Visit Ukraine offers modern online car insurance that saves time and nerves. We cooperate only with proven insurance companies, so your policy will be reliable and transparent.

With our service you can: apply for insurance in a matter of minutes, receive an official policy by email without having to visit the office, choose the optimal insurance package according to your needs.

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Reminder! Motor insurance in Ukraine is mandatory insurance for every driver. We tell you about the 5 main mistakes drivers make when applying for a motor insurance policy here.

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