Quick answer: you need at least your state’s minimum liability coverage to drive legally, but most drivers with savings, a home or steady income should carry more. A common starting point, suggested by the Insurance Information Institute, is bodily injury liability of $100,000 per person and $300,000 per accident, with uninsured and underinsured motorist coverage at matching limits. Add collision and comprehensive if your car is financed, leased or worth more than you could comfortably replace, and choose deductibles you could pay from savings tomorrow.
Car insurance is sold in pieces, and each piece has its own limit. That makes “how much do I need?” a set of smaller questions: how much liability, whether to carry coverage for your own car, how much medical coverage and what deductible. The answers depend on what you own, what you drive and how much risk you can absorb.
This article walks through each decision in order. For an overview of how auto policies work, what sets your premium and how claims are handled, see our complete car insurance guide.
This is general educational information, not legal or financial advice, and Pro Insurance Info is not an insurance company. State minimums and available coverages change, so confirm current requirements with your state insurance department. Sources: National Association of Insurance Commissioners (NAIC) auto insurance consumer guidance; Insurance Information Institute (III); Insurance Research Council (IRC); California Department of Insurance; Florida Office of Insurance Regulation; Texas Department of Insurance. Checked October 2026. Questions: hello@proinsuranceinfo.com.
Start With Your State's Minimum Requirements
Every state except New Hampshire requires most drivers to carry auto insurance or meet a financial responsibility requirement, and nearly all set minimum liability limits. Minimums are written as three numbers. A 25/50/25 requirement, for example, means $25,000 for injuries to one person, $50,000 for all injuries in one accident and $25,000 for property damage.
Some states add other required coverages:
- Personal injury protection (PIP) in no-fault states such as Florida, Michigan, New York and New Jersey.
- Uninsured motorist coverage in states such as New York, Illinois and Maryland, among others.
- Property damage only, in Florida’s case, with no bodily injury liability requirement for most drivers.
Minimums vary widely. California raised its minimums to 30/60/15 on January 1, 2025, after decades at 15/30/5, according to the California Department of Insurance, while Texas requires 30/60/25. Look up your own state’s figures on its insurance department website. Our explainer on types of auto insurance coverage defines each term.
Why State Minimums Are Often Not Enough
State minimums make you legal, not protected. If you cause a crash, your liability coverage pays the other people’s medical bills, lost wages, pain and suffering and car repairs up to your limits. Anything above the limits can become your personal responsibility, and a court judgment can lead to wage garnishment or liens in some states.
Consider how quickly costs add up:
- A single emergency room visit, surgery or hospital stay for one injured person can exceed $25,000.
- A crash that injures several people can blow through a $50,000 per-accident limit.
- A $25,000 property damage limit may not cover a newer car, let alone two cars plus a guardrail or storefront.
The NAIC encourages consumers to consider buying more than the minimum, especially if they have assets to protect.
Step 1: Choose Your Liability Limits
Liability coverage is the most important decision because it protects everything you own. A practical approach:
- Add up what you could lose in a lawsuit: savings, investments outside retirement accounts, home equity and future income.
- Pick limits that cover that total, or as close as your budget allows.
- Consider an umbrella policy if your net worth or income is well above the highest auto limits you can buy. Umbrellas typically start at $1 million and require certain underlying auto limits.
Common limit packages look like this:
| Limits | Who often chooses them |
|---|---|
| State minimum (for example 25/50/25) | Drivers with few assets and tight budgets, accepting more personal risk |
| 50/100/50 | Drivers with modest savings who want a step up from the minimum |
| 100/300/100 | A widely suggested starting point for homeowners and families |
| 250/500/100 or higher | Drivers with significant assets, often required before an umbrella policy |
Raising liability limits often costs less than people expect, because the first dollars of coverage carry the most risk for the insurer. Ask for quotes at two or three limit levels to see the difference. Our guide to umbrella insurance explains how extra liability coverage layers on top.
Step 2: Match Uninsured and Underinsured Motorist Coverage
Uninsured motorist (UM) coverage pays for your injuries when an at-fault driver has no insurance or flees the scene; underinsured motorist (UIM) coverage pays when the at-fault driver’s limits are too low to cover your losses. The Insurance Research Council has estimated that roughly one in seven drivers on U.S. roads is uninsured, and many more carry only minimum limits.
Many states require insurers to offer UM and UIM coverage at limits equal to your liability limits, and you must reject higher limits in writing to buy less. Matching them is a common recommendation because this coverage protects you and your passengers, not strangers. Read uninsured and underinsured motorist coverage explained for state differences, including uninsured motorist property damage.
Step 3: Decide on Collision and Comprehensive
Collision pays to repair or replace your car after a crash, and comprehensive pays for theft, vandalism, fire, flood, hail, falling objects and animal strikes. Both pay up to the car’s actual cash value, minus your deductible.
You generally need both if:
- Your car is financed or leased. The lender or leasing company requires them.
- You could not replace the car from savings if it were totaled or stolen.
- The car is newer or valuable compared with the premium.
You might consider dropping one or both if the car is older, paid off and worth little. A common rule of thumb is to compare the yearly cost of the coverage plus your deductible with the car’s value; if the coverage costs a large share of what the insurer would ever pay, the math may favor dropping it. Our comparison of comprehensive vs. collision coverage works through examples.
If you owe more on a loan or lease than the car is worth, gap insurance pays the difference after a total loss. Many lease contracts include it; for loans, it can often be bought from your auto insurer.
Step 4: Choose Medical Coverage
Medical payments (MedPay) and personal injury protection (PIP) cover medical bills for you and your passengers regardless of fault. PIP is broader and usually includes lost wages and other costs; it is required in no-fault states and optional in some others.
How much to buy depends on your health insurance. MedPay and PIP can cover your health plan’s deductible and coinsurance, and they cover passengers who may not have good health coverage. Limits commonly range from $1,000 to $10,000 or more for MedPay. In Michigan, drivers choose among several PIP medical limits under the state’s 2019 no-fault reform, and some can opt out entirely if they have qualifying health coverage.
Step 5: Pick Deductibles You Can Afford
Your deductible is what you pay out of pocket on collision and comprehensive claims before the insurer pays. Common choices are $250, $500, $1,000 and higher. A higher deductible lowers your premium because you take on more of the small claims.
Choose a deductible you could pay from savings the day after a crash without using a credit card. Some drivers set a lower comprehensive deductible than collision because comprehensive claims, such as a cracked windshield or hail damage, can be frequent. See how the trade-off works in deductible vs. premium.
Optional Coverages Worth Considering
- Rental reimbursement: pays for a rental car while yours is being repaired after a covered claim, usually with a daily and total limit.
- Roadside assistance: towing, jump-starts, lockouts and flat tires, often for a small cost.
- New car replacement: pays for a new car of the same make and model if a newer car is totaled, offered by some insurers.
- Rideshare or delivery endorsement: needed if you drive for an app, since personal policies often exclude that use.
- Custom equipment coverage: for aftermarket parts, wheels or sound systems.
A Simple Coverage Worksheet
Fill in each line before you shop so every quote prices the same coverage:
| Coverage | Your choice | Notes |
|---|---|---|
| Bodily injury liability | ___ / ___ per person / per accident | At least your state minimum; consider 100/300 or higher |
| Property damage liability | ___ | Consider $100,000 given newer car values |
| Uninsured/underinsured motorist | ___ / ___ | Often matched to liability limits |
| PIP or MedPay | ___ | Required in no-fault states |
| Collision deductible | ___ | Only if you carry collision |
| Comprehensive deductible | ___ | Only if you carry comprehensive |
| Gap insurance | Yes / No | If the loan balance exceeds the car’s value |
| Rental and roadside | Yes / No | Check daily rental limits |
Bring the finished worksheet to every quote request, whether you shop online, through a captive agent or through an independent agent.
How Coverage Needs Differ by Situation
The same method leads to different answers for different households. These general profiles show how the steps play out; they are illustrations, not recommendations for any specific person.
A Renter With an Older, Paid-Off Car
With few assets and a car worth a few thousand dollars, this driver might carry liability above the state minimum, matching uninsured motorist coverage and comprehensive with a high deductible to cover theft and weather, while skipping collision. Future wages still need protection, so the cheapest legal policy is rarely the best fit.
A Family With a Home and a Financed SUV
Home equity and two incomes make this household a bigger lawsuit target, so liability limits of 100/300/100 or higher, matched UM and UIM coverage, and an umbrella policy are common choices. The lender requires collision and comprehensive, and gap insurance may be needed in the first years of the loan. A teen driver on the policy is another reason to raise limits.
A Retiree on a Fixed Income
Retirement savings and a paid-off home are worth protecting, so liability limits often stay high even as the car ages. Medicare does not replace MedPay or PIP for passengers, and the household may choose lower collision coverage on an older car while keeping comprehensive. Driving less can also qualify for a low-mileage discount.
When to Revisit How Much Car Insurance You Carry
Coverage needs shift as life changes. Review your limits when you buy a home, get a raise, pay off a car loan, add a teen driver, start driving for work or move to a new state. A once-a-year review at renewal is a good habit even when nothing obvious has changed.
Frequently Asked Questions
Frequently Asked Questions
Is state minimum car insurance enough?
It makes you legal, but it may not protect your savings, home or income if you cause a serious crash. Many drivers choose higher limits, such as 100/300/100, especially if they have assets.
What does 100/300/100 mean?
It means $100,000 of bodily injury coverage per person, $300,000 of bodily injury coverage per accident and $100,000 of property damage coverage per accident.
Do I need full coverage on a paid-off car?
Not legally. Collision and comprehensive are optional once there is no lender. Keep them if you could not afford to replace the car; consider dropping them if the car’s value is low compared with the premium and deductible.
How much uninsured motorist coverage should I get?
Many drivers match their uninsured and underinsured motorist limits to their liability limits, since this coverage protects you and your passengers when the other driver cannot pay.
Does higher coverage cost a lot more?
Often less than people expect. Moving from minimum limits to higher liability limits usually adds a modest amount to the premium, because the insurer’s biggest risk is in the first dollars of coverage. Get quotes at several levels to compare.
The Bottom Line
The right amount of car insurance protects what you would lose if things went badly. Start with your state’s minimums, raise liability limits to cover your assets, match uninsured motorist coverage, keep collision and comprehensive while the car is worth protecting, and choose deductibles you can pay. Write your choices on the worksheet so every quote compares the same coverage.
