Living in paradise comes with a few unique insurance requirements. If you're driving in Hawaii, you're operating under a no-fault insurance system that works differently from most mainland states. Whether you're a longtime resident or new to the islands, understanding Hawaii's auto insurance landscape will help you get the right coverage at the best price—and stay on the right side of the law.
Here's what makes Hawaii different: the island market, limited insurance options, mandatory PIP coverage, and some of the most driver-friendly premium rates in the country. Let's break down what you need to know.
Understanding Hawaii's No-Fault System and PIP Requirements
Hawaii is one of a dozen states that operates under a no-fault insurance system. What does this mean for you? After an accident, your own insurance company pays your medical bills—regardless of who caused the crash. This is where Personal Injury Protection (PIP) coverage comes in.
Every driver in Hawaii must carry at least $10,000 in PIP coverage per person. This pays for necessary medical services including ambulance rides, hospital stays, X-rays, surgery, professional nursing, and rehabilitation. It covers you, your passengers, and anyone who drives your car with permission. The key benefit? You don't have to wait for fault to be determined or deal with the other driver's insurance company to get your medical bills paid.
But here's the catch most people miss: basic PIP doesn't cover everything. Lost wages while you're recovering? Not included unless you purchase optional wage loss coverage. Funeral expenses? Also excluded unless you add optional funeral benefits (typically $2,000). Many Hawaii drivers discover these gaps too late. Consider adding optional coverages like wage loss protection, alternative care (which can include acupuncture, naturopathy, or faith healing), and death benefits ranging from $25,000 to $100,000.
Minimum Coverage Requirements and 2026 Changes
Beyond PIP, Hawaii requires liability coverage to pay for damage you cause to others. Current minimums are 20/40/10, which means $20,000 for bodily injury per person, $40,000 per accident, and $10,000 for property damage. If you're shopping for insurance now, you'll see these limits on every quote.
But mark your calendar: January 1, 2026 brings a major change. Thanks to Act 138 passed in July 2024, minimum liability requirements will double to 40/80/20. That means $40,000 per person for bodily injury, $80,000 per accident, and $20,000 for property damage. If you carry only minimum coverage now, expect your premium to increase when this takes effect. Smart move? Consider upgrading to the new minimums early—you'll lock in better protection and won't scramble when the deadline hits.
Honestly, even the new minimums might not be enough if you cause a serious accident. Medical costs are high in Hawaii, and if you're at fault for an accident that totals someone's newer vehicle and sends them to the hospital, you could easily exceed these limits. The difference between your coverage and the actual damages comes out of your pocket—your savings, your home equity, your future wages. Many financial advisors recommend carrying at least 100/300/100 coverage, or adding an umbrella policy for extra protection.
The Island Market: What Makes Hawaii Different
Shopping for auto insurance in Hawaii means dealing with a smaller pool of options compared to the mainland. The island market is dominated by a mix of national carriers and local companies, with Island Insurance Company—Hawaii's largest locally-owned and managed property/casualty insurer—holding significant market share after over 80 years serving island families.
You'll find familiar names like GEICO, State Farm, Progressive, and Farmers competing alongside local players like DTRIC Insurance, First Insurance of Hawaii, and Island Premier Insurance. GEICO currently offers some of the most competitive rates at around $66 monthly for full coverage, while other carriers average closer to $82-$104 per month. If you're military or a veteran, USAA remains an excellent option with competitive rates and outstanding service.
Here's what's interesting about Hawaii: insurers can't use your age, gender, or credit score when setting your rates. This makes Hawaii one of the fairest states in the country for insurance pricing. Your premium is based on factors you can actually control—your driving record, the car you drive, how much you drive, and where you live. A 25-year-old driver with a clean record pays roughly the same as a 55-year-old with a similar profile.
What happens if you have a rough driving record and can't find coverage? Hawaii has your back with the Hawaii Joint Underwriting Plan (HJUP). If an insurer turns you down, their agent must offer to place you in HJUP, which serves as a safety net ensuring every driver can get the legally required coverage. The rates won't be cheap—high-risk insurance never is—but you won't be left unable to legally drive.
What You'll Actually Pay: Hawaii Insurance Costs
Good news: Hawaii offers some of the most affordable car insurance in America, ranking fourth-best for full coverage and fifth for minimum coverage. The average driver pays around $82 per month ($983 annually) for full coverage, or about $34-$38 monthly for minimum coverage. Compare that to national averages, and Hawaii drivers are getting a bargain.
That said, rates have been climbing. Premiums jumped 27% from 2023 to 2024, and another 6% from 2024 to 2025. These increases mirror national trends driven by rising vehicle repair costs, more expensive medical care, and increased claim frequency. With the 2026 coverage requirement increases coming, expect rates to edge up further—though Hawaii will likely remain among the more affordable states.
Your actual rate depends on your specific situation. Island location matters—drivers in rural areas typically pay less than those in Honolulu. Your vehicle makes a big difference too; insuring a newer truck costs more than an older sedan. Your coverage choices matter most of all. Carrying just minimum coverage might save money upfront, but leaves you financially exposed if you cause serious damage or total your own car.
Getting the Right Coverage for Your Situation
Start by getting quotes from at least three insurers—both national carriers and local companies. Since Hawaii prohibits certain rating factors, you might find less price variation than in other states, but it's still worth comparing. Look beyond the premium number to what's actually covered, the deductibles you'll pay, and the company's reputation for claims handling.
Think seriously about optional coverages. Comprehensive and collision coverage protects your own vehicle—essential if you're financing or leasing, and smart if you can't afford to replace your car out of pocket. Uninsured motorist coverage protects you if you're hit by someone driving illegally without insurance. And as mentioned earlier, wage loss coverage under your PIP can be a financial lifesaver if you're injured and can't work.
Ask about discounts. Even though insurers can't use credit scores, they still offer discounts for things like bundling home and auto policies, taking defensive driving courses, having safety features in your vehicle, or being claims-free for several years. These can add up to significant savings, especially if you're with a local company that understands the island market.
Hawaii's auto insurance system protects you with mandatory no-fault coverage while keeping premiums affordable. As the 2026 requirement changes approach, now's the perfect time to review your coverage, compare rates, and make sure you're properly protected for whatever comes your way on island roads. Get quotes, understand what you're buying, and drive with confidence knowing you're covered.
