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

Most states require around 25/50/25 of liability coverage (meaning $25,000 per person in medical bills, $50,000 per accident, and $25,000 in property damage). These minimums are enough car insurance to drive legally. See your state's minimum coverage car insurance requirements.

The problem is state minimums were set years ago and haven't kept up with real costs, meaning you will need more car insurance to protect your assets. A minor accident with injuries can easily exceed what your minimum covers, leaving you personally liable. 

If your budget allows, you need more than the minimum to protect you from this gap. That's why we recommend using the asset-based framework below to determine how much car insurance makes sense for your situation, not just what the law requires.

The amount of car insurance you need. to protect your assets depends on your specific situation and the total assets you want to protect with your car insurance Answer these three core questions to determine the right amount of liability and other coverages you need.

The right liability car insurance amount depends on your total assets (home value + savings + investments + car value). Here's how to determine how much liability insurance 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 need 250/500/250

The higher your assets, the more car insurance liability coverage you need.

If you are financing or leasing your car you will need as much liability car insurance required by the lender. Most lenders require approximately 100/300/100, but you will need more than lender minimums if you have higher assets.

Full coverage protects your vehicle from damage. You'll need full coverage car insurance if you don't want to pay for repairs to your car if you have an at-fault accident. 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.

Get full coverage if:

• You're financing or leasing. Lenders require both collision and comprehensive coverage
• Your car is worth $5,000 or more
• You can't afford to replace or repair your car out of pocket

Skip full coverage if:

• Your car is worth less than $5,000 (repair costs are cheaper than premiums)
• You can pay for repairs yourself for your car

Beyond liability and full coverage, here are other car insurance coverages you need based on your situation:

• Uninsured Motorist Coverage:  You need this coverage 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: If you have $500,000+ in assets, an umbrella policy protects you when your auto insurance maxes out. It covers the gap in large lawsuits. Cost: $150–$300/year for $1M coverage.

Here's how much car insurance you need based on what you have to protect. Choose the good, better, or best coverage amounts that match your assets and budget

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