How Much Car Insurance Do I Need? Expert Recommendations for 2026

MoneyGeek and the Insurance Information Institute have these recommendations for how much car insurance you need: 

1. You need at least your state's minimum coverage to drive legally, but these minimums only make sense when you can't afford higher cost insurance, have a low value car, and have minimal assets. Most states require 25/50/25 coverage ($25,000 per person for bodily injury, $50,000 per accident, $25,000 for property damage).
2. How much liability coverage do you need?  Most drivers should have at least 100/300/100 liability coverage, which means $100,000 per person, $300,000 per accident, and $100,000 for property damage. This provides solid protection if you're at fault in an accident, though higher limits like 250/500/250 offer better protection against major claims that could exceed minimum coverage.
3. Do you need full coverage? Full coverage combines comprehensive and collision insurance to cover damage to your own vehicle from accidents, weather, theft, and other incidents. Most drivers with cars worth more than $3,000 need it, and lenders require full coverage on financed or leased vehicles.
4. You may need uninsured motorist, personal injury protection (PIP) or medical payments coverages. UM coverage protects you if hit by an uninsured driver. Personal injury protection (PIP) covers medical bills and lost wages regardless of fault. These coverages are mandatory in 22 states for UM/UIM and 13 states for PIP.

The table below helps you understand what is basic coverage, good coverage, and premium coverage by coverage type.

Nearly every state in the U.S. requires minimum liability coverage. Thirteen states require personal injury protection (PIP) to cover medical expenses. Twenty-two states require uninsured/underinsured motorist coverage that protects you when another driver has no insurance or insufficient coverage. The table below shows state minimum requirements across all 50 states plus Washington D.C.

State minimums are cheaper but often inadequate. Medical costs and vehicle values have increased faster than minimum requirements, which haven't changed in most states for 10-20 years.

If you cause an accident with 25/50/25 coverage and total a new Range Rover Sport ($100,000 value) while injuring the other driver ($50,000 medical costs), your policy only covers $25,000 of each. You'd be personally liable for $100,000 in damages plus legal fees ($10,000 to $50,000). Higher liability limits protect your assets, including home equity and savings, and prevent wage garnishment (up to 10 years in some states).

When you finance or lease a vehicle, the lender typically requires certain coverages to protect their financial interest in the vehicle. They will ask for proof of coverage before you drive off the lot, and you'll need to maintain continuous coverage throughout the loan or lease term. Letting coverage lapse can trigger forced-place insurance from the lender at rates 2-3 times higher than standard policies.

Choose either $500 or $1,000. A $1,000 deductible saves $250 annually on average but costs $500 more per claim. Only choose an amount that you can afford to pay in the case of an at-fault accident.

• Deductibles apply separately to comprehensive and collision claims. If hail damages your car and an accident happens the same month, you pay two deductibles.
• They are paid each time you file a claim. Multiple claims in one year means multiple deductible payments.
• Higher deductibles lower car insurance costs. The tradeoff is you pay more out-of-pocket when you claim.

Choosing the right car insurance can be overwhelming. Here are answers to common questions to help you decide how much coverage you need.