Which U.S. state was the first to mandate automobile liability insurance?

Massachusetts was the first U.S. state to mandate automobile liability insurance.

Massachusetts adopted its compulsory motor-vehicle liability insurance law in 1925, making financial protection for injuries and property damage a condition of operating or registering a vehicle. The law emerged as automobiles became more common and states confronted accidents involving drivers who could not pay injured people.

The policy model developed gradually. Massachusetts combined compulsory coverage with state involvement in insurance administration and rate setting, an approach that differed from later systems built around private-market competition. Connecticut also became an early pioneer of financial-responsibility and compulsory-insurance rules.

A frequent confusion is between mandatory insurance and financial responsibility. A financial-responsibility law may allow a driver to prove the ability to pay through a bond, deposit, or other means, while a compulsory-insurance law specifically requires an insurance policy. Massachusetts is credited with the first compulsory automobile liability insurance law in the United States, although the exact wording and enforcement mechanisms have changed over time.