On the New Hampshire Property & Casualty exam, the Personal Automobile Policy appears both as a standard ISO-style contract and as a set of New Hampshire auto rules you must apply. The headline twist is that New Hampshire is one of the few states where auto liability insurance is generally NOT mandatory—a driver may instead satisfy a financial-responsibility requirement. This standalone guide reviews the policy's coverage parts, then drills into the New Hampshire overlay: that no-mandatory-insurance distinctive, the 25/50/25 minimums that apply if a policy is purchased, the mandatory uninsured-motorist and medical-payments coverages built into a New Hampshire auto policy, and the at-fault (tort) system with modified comparative negligence (51% bar).

Policy structure (the national base)

The Personal Auto Policy (PAP) is a packaged contract organized into lettered parts:

• Part A — Liability: pays bodily injury (BI) and property damage (PD) the insured is legally liable for; the insurer provides a defense, and supplementary payments such as defense costs are paid in addition to the limit.
• Part B — Medical Payments: pays reasonable medical and funeral costs for the insured and passengers regardless of fault.
• Part C — Uninsured/Underinsured Motorists: pays the insured's injuries when the at-fault party is uninsured or underinsured.
• Part D — Coverage for Damage to Your Auto: Collision and Other Than Collision (Comprehensive), each with a deductible, settled at Actual Cash Value (ACV).
• Part E — Duties After an Accident or Loss and Part F — General Provisions.

Limits may be written as split limits (e.g., 25/50/25) or as a Combined Single Limit (CSL). Insureds include the named insured, resident spouse, resident relatives, and permissive users—a friend who borrows the car with permission is generally covered. Eligible vehicles are private passenger autos, pickups, and vans not used mainly for business, and an owned utility trailer generally falls within the covered-auto definition for liability. That framework is national; New Hampshire governs the limits and the liability environment around it.

New Hampshire's distinctive: liability insurance is generally NOT mandatory

This is the single most-tested New Hampshire auto point, so get it cold. New Hampshire does not require every driver to carry auto liability insurance. Instead, a driver must be able to demonstrate financial responsibility—the ability to pay for damage they cause. A driver may meet that obligation by buying insurance or by other approved means (such as a bond or cash deposit with the state), and certain drivers (for example, after an at-fault accident or serious violation) can be ordered to file proof of financial responsibility.

Practical reality for the exam: even though insurance is not strictly mandatory statewide, a driver who causes a crash without coverage is personally liable for the damages and can have their license and registration suspended until they pay and file proof. So most New Hampshire drivers buy a policy anyway, and lenders require it. The point to remember: New Hampshire = financial-responsibility state, not compulsory-insurance state.

What applies IF a policy is purchased: 25/50/25 plus mandatory UM and Med Pay

When a New Hampshire driver does buy an auto policy, state law sets the minimum limits and builds in certain coverages the insurer must include:

• $25,000 bodily injury per person
• $50,000 bodily injury per accident
• $25,000 property damage per accident

Shorthand: "25/50/25" (verify the current statutory figures). Beyond liability, a New Hampshire auto policy must include:

• Uninsured/Underinsured Motorist (UM/UIM) coverage at limits at least equal to the liability limits (this is mandatory in a purchased New Hampshire policy, not merely offered).
• Medical Payments coverage at a stated minimum (commonly cited as at least $1,000—verify), also mandatory in a purchased policy.

So the distinctive pairing to memorize: insurance is optional to own, but if you buy it, UM and Med Pay are required components.

New Hampshire uses a tort (at-fault) liability system

New Hampshire is an at-fault / tort state, not a no-fault state. The driver who causes a crash is financially responsible, and the injured party collects from that driver's liability coverage or by filing suit. This is why liability coverage and financial responsibility dominate New Hampshire auto law.

New Hampshire applies modified comparative negligence with a 51% bar. The rule to remember: a claimant may recover only if their own fault is not greater than the other party's—roughly, 50% or less at fault recovers; 51% or more recovers nothing. When the claimant does recover, the award is reduced by their own percentage of fault. (Contrast this with pure comparative states, where even a mostly-at-fault claimant recovers something.) Expect the exam to test that New Hampshire is modified comparative with a 51% bar, not pure comparative and not contributory.

Uninsured and underinsured motorist rules

This is a heavily tested New Hampshire area, especially because UM/UIM is built into a purchased policy:

• A New Hampshire auto policy must include uninsured motorist (UM) and underinsured motorist (UIM) coverage, generally at limits matching the liability limits unless the insured selects otherwise as allowed.
• UM responds when the insured is injured by an at-fault driver who has no liability insurance, and it also covers hit-and-run drivers.
• UIM applies when the at-fault driver has insurance but at limits too low to cover the insured's damages; it pays the gap up to the insured's UIM limit.
• The other driver must be legally at fault for UM/UIM to respond.
• Stacking—combining the UM limits of more than one owned vehicle—may increase the coverage available.

Optional and physical-damage coverages

• Collision pays for impact with another vehicle or object or upset of the auto; Comprehensive (Other Than Collision) pays for losses such as theft, fire, hail, vandalism, or hitting an animal. Both are optional but typically required by a lender.
• On a total loss, physical-damage coverage pays the vehicle's actual cash value at the time of loss—gap coverage is what pays the difference between ACV and a larger loan balance. A betterment deduction may apply when new parts leave the vehicle better than before the loss.
• A newly acquired auto is generally covered for a limited time if reported within the required period, and a named driver exclusion removes coverage while a specifically named person is driving.

Cancellation and nonrenewal

New Hampshire regulates how an insurer may end a personal auto policy:

• Mid-term cancellation generally requires the insurer to give the policyholder the advance written notice required by law.
• Nonrenewal at the end of the term likewise requires advance written notice within the required time so the insured can find replacement coverage.
• On cancellation, the insurer keeps only the earned premium and refunds the unearned portion; when the insurer cancels, the refund is generally pro rata without penalty.

Required vs. optional coverages

Key New Hampshire numbers to memorize

Common exam traps

• Saying New Hampshire requires auto insurance. It generally does not—it's a financial-responsibility state with a bond/deposit alternative.
• Forgetting UM and Med Pay are mandatory if you buy a policy. Insurance is optional to own, but a purchased New Hampshire policy must include UM/UIM and Medical Payments.
• New Hampshire is at-fault (tort), not no-fault. There is no mandatory PIP.
• New Hampshire uses modified comparative negligence (51% bar), not pure comparative—a claimant 51%+ at fault recovers nothing.
• 25/50/25—the $25k property damage is the third number; don't slide it into a BI slot.
• Hitting an animal is Comprehensive, not Collision.
• Total loss pays ACV; gap coverage (not the PAP itself) covers a larger loan balance.

Quick recap

• The PAP's Parts A–F structure is national; New Hampshire sets the limits and legal framework.
• New Hampshire is distinctive: auto liability insurance is generally NOT mandatory, replaced by a financial-responsibility obligation you can also meet with a bond or deposit.
• If a policy is purchased, minimum liability is 25/50/25, and the policy must include mandatory UM/UIM and Medical Payments.
• New Hampshire is a tort/at-fault state using modified comparative negligence with a 51% bar.
• New Hampshire has no mandatory no-fault/PIP; Collision and Comprehensive are optional, and total losses pay ACV.
• Mid-term cancellation and nonrenewal require the advance written notice the law specifies, with unearned premium refunded.