MoneyGeek teamed up with Mark Friedlander from the Insurance Information Institute to give you expert advice on how much car insurance you need. These are the primary considerations for determining the right amount of car insurance for you are:
How Much Car Insurance Do I Need? Expert Advice for 2026
Updated: January 16, 2026
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How Much Car Insurance You Need Legally in Your State?
Each state has minimum requirements that must be met to drive legally, including minimums for bodily injury, property damage, and other coverages like uninsured motorists and personal injury protection. Liability coverage is legally required in every state except New Hampshire. It pays for injuries and property damage you cause to others. Coverage is written as three numbers: $X per person / $Y per accident / $Z for property damage. Example: 100/300/100 means $100,000 per person, $300,000 total per accident, and $100,000 for property damage. See your state's minimum coverage car insurance requirements.
Alabama | $25,000 / $50,000 / $25,000 | — |
Alaska | $50,000 / $100,000 / $25,000 | — |
Arizona | $25,000 / $50,000 / $15,000 | — |
Arkansas | $25,000 / $50,000 / $25,000 | — |
California | $30,000 / $60,000 / $15,000 | UM/UIM if purchased: $30,000/$60,000 |
Colorado | $25,000 / $50,000 / $15,000 | — |
Connecticut | $25,000 / $50,000 / $25,000 | UM/UIM: $25,000/$50,000 (required) |
Delaware | $25,000 / $50,000 / $10,000 | PIP: $15,000/$30,000 |
Florida | No BI required / — / $10,000 | PIP: $10,000 (required) |
Georgia | $25,000 / $50,000 / $25,000 | — |
Hawaii | $40,000 / $80,000 / $20,000 | PIP: $10,000 (required) |
Idaho | $25,000 / $50,000 / $15,000 | — |
Illinois | $25,000 / $50,000 / $20,000 | UM/UIM: $25,000/$50,000 (required) |
Indiana | $25,000 / $50,000 / $25,000 | UM: $25,000/$50,000 (required) |
Iowa | $20,000 / $40,000 / $15,000 | — |
Kansas | $25,000 / $50,000 / $25,000 | PIP: $4,500 medical; UM: $25,000/$50,000 |
Kentucky | $25,000 / $50,000 / $25,000 | PIP: $10,000 (required) |
Louisiana | $15,000 / $30,000 / $25,000 | — |
Maine | $50,000 / $100,000 / $25,000 | UM/UIM: $50,000/$100,000; MedPay: $2,000 |
Maryland | $30,000 / $60,000 / $15,000 | PIP: $2,500; UM: $30,000/$60,000 |
Massachusetts | $25,000 / $50,000 / $30,000 | PIP: $8,000; UM: $25,000/$50,000 |
Michigan | $50,000 / $100,000 / $10,000 | PIP: Required (various levels) |
Minnesota | $30,000 / $60,000 / $10,000 | PIP: $40,000; UM/UIM: $25,000/$50,000 |
Mississippi | $25,000 / $50,000 / $25,000 | — |
Missouri | $25,000 / $50,000 / $25,000 | UM: $25,000/$50,000 (required) |
Montana | $25,000 / $50,000 / $20,000 | — |
Nebraska | $25,000 / $50,000 / $25,000 | UM/UIM: $25,000/$50,000 (required) |
Nevada | $25,000 / $50,000 / $20,000 | — |
New Hampshire | $25,000 / $50,000 / $25,000 | Insurance optional but FR amounts apply |
New Jersey | $35,000 / $70,000 / $25,000 | PIP: $15,000; UM/UIM: $35,000/$70,000 |
New Mexico | $25,000 / $50,000 / $10,000 | — |
New York | $25,000 / $50,000 / $10,000 | PIP: $50,000; UM: $25,000/$50,000 |
North Carolina | $50,000 / $100,000 / $50,000 | UM/UIM: $50,000/$100,000 (required) |
North Dakota | $25,000 / $50,000 / $25,000 | PIP: $30,000; UM/UIM: $25,000/$50,000 |
Ohio | $25,000 / $50,000 / $25,000 | — |
Oklahoma | $25,000 / $50,000 / $25,000 | — |
Oregon | $25,000 / $50,000 / $20,000 | PIP: $15,000; UM: $25,000/$50,000 |
Pennsylvania | $15,000 / $30,000 / $5,000 | MedPay: $5,000 (required); UM available |
Rhode Island | $25,000 / $50,000 / $25,000 | — |
South Carolina | $25,000 / $50,000 / $25,000 | UM: $25,000/$50,000 (required) |
South Dakota | $25,000 / $50,000 / $25,000 | UM/UIM: $25,000/$50,000 (required) |
Tennessee | $25,000 / $50,000 / $25,000 | — |
Texas | $30,000 / $60,000 / $25,000 | — |
Utah | $30,000 / $65,000 / $25,000 | PIP: $3,000; UM/UIM if purchased: $30,000/$65,000 |
Vermont | $25,000 / $50,000 / $10,000 | UM/UIM: $50,000/$100,000 (required) |
Virginia | $50,000 / $100,000 / $25,000 | UM/UIM if purchased: $50,000/$100,000 |
Washington | $25,000 / $50,000 / $10,000 | — |
West Virginia | $25,000 / $50,000 / $25,000 | UM: $25,000/$50,000 (required) |
Wisconsin | $25,000 / $50,000 / $10,000 | UM: $25,000/$50,000 (required) |
Wyoming | $25,000 / $50,000 / $20,000 | — |
Washington D.C. | $25,000 / $50,000 / $10,000 | UM: $25,000/$50,000 (required) |
How Much Car Insurance You Need to Protect Assets
The amount of car insurance you need. to protect your assets depends on your specific situation. Answer these three core questions to determine the right amount of liability and other coverages you need.
1. How Much Liability Car Insurance Do You Need?
The right liability car insurance amount depends on your total assets (home value + savings + investments + car value). Here's how to determine what you need:
- Under $50,000 in assets → You need 50/100/50 or your state's minimum if budget is very tight
- $50,000 to $500,000 in assets → Most drivers fall in this category and need 100/300/100
- $500,000+ in assets → If you have a high amount of assets you should consider 250/500/250
The higher your assets, the more car insurance liability coverage you need.
Determine How Much Car Insurance You Need
Take our four-step quiz to learn the required and optimal level of car insurance for you.
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2. Do You Need Full Coverage Car Insurance?
Full coverage protects your vehicle from damage. Collision covers accidents with other vehicles or objects. Comprehensive covers theft, weather, vandalism, or hitting an animal. Full coverage is required if you're financing or leasing, but optional if you own your car outright.
Deciding if you need full coverage:
- Car is financed or leased → Full coverage is required by your lender
- Car is worth $3,000+ → Full coverage makes financial sense
- Car is worth less than $3,000 → You don't need it and the cost exceeds the benefit
If you skip full coverage and have an at-fault accident, you'll cover repairs out of pocket.
Your deductible is what you pay out of pocket after an accident before insurance kicks in. Choose a $500 deductible if you can afford the higher monthly policy cost or a $1,000 deductible if you need lower monthly payments (saves about $17 a month on average). Only pick an amount you can actually afford to pay when you need it.
3. How Much Other Car Insurance Coverage Do You Need?
Beyond liability and full coverage, here is the car insurance you need based on your situation:
- Uninsured Motorist Coverage: Required in 22 states. Covers you if hit by an uninsured or underinsured driver. Recommended even where not required if you're concerned about uninsured drivers in your area.
- Personal Injury Protection (PIP): Required in some states. Covers your medical bills and lost wages after an accident regardless of fault. Most valuable if you have high health insurance deductibles or no health insurance.
- Umbrella Policy: Not required, but important if you have $500,000 or more in assets. This additional liability coverage kicks in when your auto policy maxes out. Example: Your auto covers $300k of a $500k lawsuit. Umbrella covers the remaining $200k, protecting you from wage garnishment and home liens. Cost: $150 to $300 per year for $1 million in coverage.
Each coverage serves a specific need. Choose based on your situation, not what others buy.
How Much Car Insurance Do Financed or Leased Cars Need?
The decision framework above shows that financed/leased vehicles require full coverage (comprehensive and collision coverage) to protect the vehicle. Here's what else to know about how much car insurance you should have:
- Car insurance need before buying: Lenders and leasing companies require proof of coverage before you drive off the lot. A lapse of even one day triggers forced-place insurance at rates 2-3x higher than standard policies.
- Gap Insurance: Required by most lenders if you're financing with less than 20 percent down or leasing. Covers the difference between what you owe and the car's actual value if totaled. Cost: $20 to $40 per year.
- Leasing vs. Financing: Leasing companies have stricter requirements than lenders. You will need higher liability limits (100/300/50 or higher), lower deductibles ($500 maximum), and you will often need gap insurance. The leasing company must be listed as loss payee on your policy.
Car Insurance Policy Examples: What "Enough" Looks Like
After you have determined how much car insurance you need, you will need to choose from all coverage amounts and types. These are good, better, and best coverage examples of what drivers typically need based on how much they have to protect. They are a guideline to give you the full picture of how much insurance you need.
You should choose based on your situation, not a checklist. If budget is tight, good coverage with higher deductibles protects your assets while keeping premiums manageable. If you want maximum peace of mind, best coverage plus an umbrella policy provides comprehensive protection. The right tier balances your assets, budget, and comfort level.
Liability | 50/100/50 or state minimum | 100/300/100 | 250/500/250 |
Full Coverage (Collision & Comprehensive)
| For cars worth $3K+ | $1K deductible | $500 deductible |
Uninsured Motorist | State minimum if required | 100/300 | 250/500 |
Personal Injury Protection | State minimum if required | $10K+ (varies by state) | $25K+ |
Gap Insurance | No (unless lease required) | No (unless lease required) | Only for financed/leased vehicles |
Umbrella Policy | No | No | Yes (for assets over $500k) |
Why State Minimum Car Insurance Isn't Enough
State minimums coverage needs haven't changed significantly in most states for 10 to 20 years. Meanwhile, the cost of cars and medical expenses has grown. Your state's minimum was designed for economics years ago. It can't protect you in 2026.
Here is why you need more car insurance than state minimums. As an example, let's say you cause an accident where you total a new $100,000 luxury vehicle and injure the other driver, who has up $60,000 in medical bills. Your 25/50/25 policy covers only $25,000 per person and $25,000 in property damage. You're personally liable for:
- $35,000 in additional medical costs ($60k actual expenses minus $25k covered)
- $75,000 in vehicle damage ($100k actual minus $25k covered)
- $10,000 to $50,000 in potential legal fees
- Total potential personal liability: $120,000 to $160,000
If you cause a serious accident, insufficient coverage leaves you personally liable for the gap. Creditors can garnish wages, place home liens, and force asset liquidation for 10 years. This is why you need liability car insurance that matches your assets and why higher liability limits protect you.
How Much Insurance Do I Need: FAQ
Choosing the right car insurance can be overwhelming. Here are answers to common questions to help you decide how much coverage you need.
What insurance coverage should I get for a new or expensive car?
Get 100/300/100 liability, full coverage (comprehensive and collision) with $1000 deductible, and gap insurance if financing. Add new car replacement coverage if your car is less than two years old (adds 5 to 10 percent to your premium but covers steep depreciation).
Is car insurance per person or by car?
Car insurance follows the car, not the driver. It covers anyone with permission to drive. Regular household drivers should be added as named drivers to avoid coverage gaps.
How many cars can you have on your insurance policy?
Most insurers allow four to five cars on a multi car policy at the same address. Multi car policies save 10 to 25 percent compared to separate policies, so bundling almost always makes sense.
Can I change how much car insurance I have mid-policy?
Yes. You can change your deductible, add or remove coverage types, and adjust your liability limits at any time during your policy period. Changes usually take effect immediately or within a few days.
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About Mark Fitzpatrick
Mark Fitzpatrick, a Licensed Property and Casualty Insurance Producer, is MoneyGeek's resident Personal Finance Expert. He has analyzed the insurance market for over five years, conducting original research for insurance shoppers. His insights have been featured in CNBC, NBC News and Mashable.
Fitzpatrick holds a master’s degree in economics and international relations from Johns Hopkins University and a bachelor’s degree from Boston College. He's also a five-time Jeopardy champion!
He writes about economics and insurance, breaking down complex topics so people know what they're buying.