How Much Car Insurance Do I Need? Expert Recommendations

MoneyGeek recommends 100/300/100 liability with comprehensive and collision for most drivers, but coverage recommendations vary by driver type, assets, vehicle type, and risk tolerance. Use our easy matrix tables below to find out how much car insurance you need.
Find the right car insurance and and get the coverage you need below.

Written by Mark Fitzpatrick

Updated: November 15, 2025

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Key Takeaways

MoneyGeek recommends 100/300/100 liability coverage plus comprehensive and collision for most drivers.

You must meet your state's minimum car insurance liability coverage requirements to drive legally, but these rarely provide enough financial protection for your assets and almost all drivers need more coverage.

We recommend additional coverages like gap insurance, roadside assistance, personal injury protection and uninsured motorist coverage depending on your situation. We help you understand the benefits of each coverage type below.

How Much Car Insurance Do I Need?

MoneyGeek and the Insurance Information Institute recommend the following for how much car insurance is enough:

You need at least minimum state auto insurance requirements, 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).
To protect assets choose higher liability amounts and full coverage. Most drivers need 100/300/100 liability coverage and full coverage to protect their car from at-fault accident, theft, and weather damage.
You may need uninsured motorist, personal injury protection (PIP) or medical payments coverages depending on your state. 13 states require PIP coverage and 22 states require uninsured/underinsured motorist protection.
Meet lender car insurance requirements if you finance or lease. If you finance you need comprehensive and collision coverage and higher liability limits to meet lender requirements.

Coverage Need	Basic Protection	Good Protection	Premium Protection
Liability Car Insurance	50/100/50 or state minimum if very budget constrained	100/300/100 ($100K per person/$300K per accident/$100K property damage)	250/500/250 ($250K per person/$500K per accident/$250K property damage)
Full Coverage (Comprehensive & Collision)	Recommended for cars worth over $3,000	Recommended with $1,000 deductible	Recommended with $500 deductible
Uninsured/Underinsured Motorist (UM/UIM)	State minimum if required	Same as liability limits (100/300)	Same as liability limits (250/500)
Personal Injury Protection (PIP)	State minimum if required	$10,000+ (varies by state requirements)	$25,000+
Gap Insurance	No (unless required for lease)	No (unless required for lease)	Recommended (only for financed/leased vehicles worth more than loan)
Roadside Assistance	Not required	Recommended	Recommended
Rental Car Reimbursement	Not required	Recommended (unless you have second car)	Recommended, $50/day, up to 30 days
New Car Replacement	Not required	Not required or recommended	Recommended (for vehicles under 2 years old)
Umbrella Policy	Not required	Not required	Recommended

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Auto Insurance Need by Driver Type

How much car insurance you need depends on your driver profile, assets, and location. Below are MoneyGeek's recommendations for liability coverage amounts and coverages you should buy based on common driver situations.

Budget-Conscious Drivers

Higher deductibles and lower liability limits reduce monthly costs. Only choose this if you have minimal assets (under $50,000) and drive an older vehicle worth under $3,000. You'll pay more out-of-pocket if you cause a serious accident.

Coverage Level: Basic protection
Liability: 50/100/50 or state minimum if very budget constrained
Full Coverage: Only for vehicles worth over $3,000
Add-On's: None, unless PIP/UM are required in your state
Typical Annual Cost: $500-$800

Families With Multiple Vehicles

Multi-car discounts offset the higher accident risk from multiple drivers. Higher liability limits protect your family's assets.

Coverage Level: Good protection
Liability: 100/300/100
Full Coverage: Yes, with $1,000 deductible
Add-Ons: UM and PIP if required in your state
Home and Auto Bundle: Strongly consider if you own a home
Typical Annual Cost: $1,800-$2,500 for two vehicles

High Assets / New Expensive Vehicles

Significant wealth makes you a lawsuit target. Higher limits and umbrella policies protect investment accounts, rental properties, and future earnings. replacements.

Coverage Level: Premium protection
Liability: 250/500/250
Full Coverage: Yes, with $500 deductible
Add-Ons: UM, PIP, New care replacement, and consider an umbrella policy
Home and Auto Bundle: Can save you up to 25% if you own a home
Typical Annual Cost: $2,000-$3,500+

Teen Drivers

Teens aged 16–19 have accident rates three times higher than experienced adults. Adding a teen to your policy costs 50–100% more than your base premium, but is cheaper than a separate policy.

Coverage Level: Good protection
Policy Type: Family policy will save you up to 30%
Liability: 100/300/100
Full Coverage: Yes, with $1,000 deductible
Add-Ons: UM and PIP if required in your state
Typical Annual Cost: $3,000-$5,000 for a family policy with a teen

Drivers With Accidents or Violations

Drivers with one at-fault accident are 50% more likely to have another within three years. Adequate coverage is critical when you already pay 30–70% higher premiums.

Coverage Level: Good protection (despite higher premiums)
Liability: 100/300/100
Full Coverage: Yes, for vehicles worth more than $3,000
Add-Ons: UM, and PIP if required in your state
Home and Auto Bundle: Strongly consider if you own a home

Minimum Liability Car Insurance You Need by State

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	Bodily injury liability (per person)	Bodily injury liability (per accident)	Property damage liability (per accident)	Other car insurance requirements
Alabama	$25,000	$50,000	$25,000	None
Alaska	$50,000	$100,000	$25,000	None
Arizona	$25,000	$50,000	$15,000	None
Arkansas	$25,000	$50,000	$25,000	None
California	$30,000	$60,000	$15,000	None
Colorado	$25,000	$50,000	$15,000	None
Connecticut	$25,000	$50,000	$25,000	Uninsured/underinsured motorist bodily injury: $25,000 per person $50,000 per accident
Delaware	$25,000	$50,000	$10,000	Personal injury protection: $15,000 per person $30,000 per accident
District of Columbia	$25,000	$50,000	$10,000	Uninsured/underinsured motorist bodily injury: $25,000 per person $50,000 per accident Uninsured/underinsured property damage: $5,000 (subject to $200 deductible)
Florida	$10,000	$20,000	$10,000	Personal injury protection: $10,000
Georgia	$25,000	$50,000	$25,000	None
Hawaii	$20,000	$40,000	$10,000	Personal injury protection: $10,000
Idaho	$25,000	$50,000	$15,000	None
Illinois	$25,000	$50,000	$20,000	Uninsured motorist bodily injury: $25,000 per person $50,000 per accident
Indiana	$25,000	$50,000	$25,000	None
Iowa	$20,000	$40,000	$15,000	None
Kansas	$25,000	$50,000	$25,000	Personal injury protection: $4,500 Uninsured/underinsured motorist bodily injury: $25,000 per person $50,000 per accident
Kentucky	$25,000	$50,000	$25,000	Personal injury protection: $10,000
Louisiana	$15,000	$30,000	$25,000	None
Maine	$50,000	$100,000	$25,000	Medical payments: $2,000 Uninsured/underinsured motorist bodily injury: $50,000 per person $100,000 per accident
Maryland	$30,000	$60,000	$15,000	Personal injury protection: $2,500 Uninsured/underinsured motorist bodily injury: $30,000 per person $60,000 per accident Uninsured motorist property damage: $15,000
Massachusetts	$20,000	$40,000	$5,000	Personal injury protection: $8,000 per accident Uninsured/underinsured motorist bodily injury: $20,000 per person $40,000 per accident
Michigan	$20,000	$40,000	$10,000 (for damage your vehicle does to property in another state)	Personal injury protection: Unlimited per person Unlimited per accident Property protection: $1 million
Minnesota	$30,000	$60,000	$10,000	Personal injury protection: $40,000 per person Uninsured/underinsured motorist bodily injury: $25,000 per person $50,000 per accident
Mississippi	$25,000	$50,000	$25,000	None
Missouri	$25,000	$50,000	$25,000	Uninsured/underinsured motorist bodily injury: $25,000 per person $50,000 per accident
Montana	$25,000	$50,000	$20,000	None
Nebraska	$25,000	$50,000	$25,000	Uninsured/underinsured motorist bodily injury: $25,000 per person $50,000 per accident
Nevada	$25,000	$50,000	$20,000	None
New Hampshire	$25,000	$50,000	$25,000	Uninsured/underinsured motorist bodily injury: $25,000 per person $50,000 per accident
New Jersey	$15,000	$15,000	$5,000	None
New Mexico	$25,000	$50,000	$10,000	None
New York	$25,000	$50,000	$10,000	Personal injury protection: $50,000 per person Liability for death: $50,000 per person Uninsured/underinsured motorist bodily injury: $25,000 per person $50,000 per accident
North Carolina	$30,000	$60,000	$25,000	Uninsured/underinsured motorist bodily injury: $30,000 per person $60,000 per accident Uninsured/underinsured motorist property damage: $25,000
North Dakota	$25,000	$50,000	$25,000	Personal injury protection: $30,000 per person Uninsured/underinsured motorist bodily injury: $25,000 per person $50,000 per accident
Ohio	$25,000	$50,000	$25,000	None
Oklahoma	$25,000	$50,000	$25,000	None
Oregon	$25,000	$50,000	$20,000	Uninsured/underinsured motorist bodily injury: $25,000 per person $50,000 per accident
Pennsylvania	$15,000	$30,000	$5,000	Medical payments coverage: $5,000
Rhode Island	$25,000	$50,000	$25,000 *or $75,000 combined single limit	None
South Carolina	$25,000	$50,000	$25,000	Uninsured/underinsured motorist bodily injury: $25,000 per person $50,000 per accident
South Dakota	$25,000	$50,000	$25,000	Uninsured/underinsured motorist bodily injury: $25,000 per person $50,000 per accident
Tennessee	$25,000	$50,000	$15,000	None
Texas	$30,000	$60,000	$25,000	None
Utah	$30,000	$65,000	$25,000	Personal injury protection: $3,000 per person Uninsured motorist coverage: $30,000 per person $65,000 per accident
Vermont	$25,000	$50,000	$10,000	Uninsured/underinsured motorist bodily injury: $50,000 per person $100,000 per accident Uninsured/underinsured property damage: $10,000
Virginia	$50,000	$100,000	$25,000	None
Washington	$25,000	$50,000	$10,000	None
West Virginia	$25,000	$50,000	$25,000	Uninsured/underinsured motorist bodily injury: $25,000 per person $50,000 per accident
Wisconsin	$25,000	$50,000	$10,000	Uninsured/underinsured motorist bodily injury: $25,000 per person $50,000 per accident
Wyoming	$25,000	$50,000	$20,000	None

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).

EXPERT TIP: MARK FRIEDLANDER (INSURANCE INFORMATION INSTITUTE)

Insurance professionals recommend buying coverage above your state's minimum liability limits. Vehicle repairs and medical bills cost more than ever, and accident lawsuits have spiked. If you cause a crash, you need enough coverage to protect your finances. A lawsuit settlement can wipe out your savings, so consider adding a personal umbrella policy for extra asset protection.

Required Coverage for a Financed or Leased Car

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.

When Financing a Vehicle, Lenders Require

Full coverage insurance: Includes liability insurance, comprehensive, and collision
Deductible limits: Maximum deductibles of $500 or $1,000
Continuous coverage: No lapses allowed—even one day without insurance can result in lender penalties
Minimum liability limits: Typically 50/100/50, though many require 100/300/50

Leasing Companies Have Stricter Requirements

Higher liability limits: Often 100/300/50 or higher to protect the leasing company's interest
Lower deductibles: Usually a maximum of $500 to ensure proper repairs
Gap insurance: Usually required to cover the difference between the car's value and the remaining lease balance
Additional insured: The leasing company must be listed as loss payee on your policy

Gap Insurance Consideration

Required for: Most leased vehicles
Strongly recommended for: Loans with less than 20% down payment
Most valuable time to buy: In the first two to three years when the gap between vehicle value and loan balance is largest due to initial auto depreciation (new cars lose 20-30% of value in year one)
Typically costs: $20-$40 annually when added to your auto policy (vs. $500-$700 when purchased through the dealer)
When to drop: Once your car's value exceeds your remaining loan balance

What Car Insurance Deductible Do You Need?

Choose either $500 or $1,000. A $1,000 deductible saves $100 to $200 annually but costs $500 more per claim. Only choose what you can afford to pay in cash.

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

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?

For a new or expensive car, purchase full coverage with liability limits of 100/300/100, comprehensive and collision coverage with $500-$1,000 deductibles, and gap insurance if financing. Consider adding new car replacement coverage, which provides a brand-new vehicle rather than depreciated value if yours is totaled in the first one to two years of ownership. This coverage typically adds 5-10% to your comprehensive premium but protects against the steep depreciation new cars experience.

Is car insurance per person or by car?

Car insurance follows the car, not the driver. Your insurance covers anyone who drives your vehicle with permissive use, meaning you've given them explicit or implied permission. However, regular drivers living in your household should be added as named drivers on your policy to avoid coverage gaps.

How many cars can you have on your insurance policy?

Most insurance companies allow adding up to four or five cars to a multi-car policy if they're all kept at the same address. While each vehicle needs liability insurance, you can choose which cars get collision or comprehensive coverage based on their value. Multi-car policies typically save 10-25% compared to separate policies.

How does choosing a higher or lower deductible affect my insurance premium?

A higher deductible (like $1,000) results in lower monthly premiums but means you'll pay more out-of-pocket when filing a claim. Most insurers report that raising a deductible from $500 to $1,000 can reduce premiums by 15-30%, saving you $100-$200 annually. Choose your deductible based on your emergency fund—never select a deductible higher than you can afford to pay immediately.

What is gap insurance and do I need it for my financed or leased vehicle?

Gap insurance covers the difference between what you owe on your car loan and the vehicle's actual cash value if it's totaled or stolen. It's highly recommended for new vehicles with small down payments (less than 20%) or long-term financing (60+ months), and is often required for leased vehicles. Gap insurance costs $20-$40 annually through your insurer but $500-$700 through dealerships.

Who needs an umbrella policy?

An umbrella policy is an additional liability coverage that layers on top of your auto and home insurance, typically in increments of $1 million up to $5 million or more. Anyone with significant assets (a net worth of over $500,000), a high income ($ 150,000 or more), or an increased risk from teen drivers, rental property, or frequent driving should consider an umbrella policy. It costs $150-$300 annually for $1 million in coverage and helps shield your savings and future earnings from costly lawsuits.

Auto Insurance Recommended Coverage: Our Review Methodology

Study Overview

MoneyGeek determined car insurance costs using quotes from various locations with a sample driver profile. We analyzed state liability coverage limits, average costs and policy coverage types.

Data Sources and Depth

We sourced data from Quadrant Information Services and state insurance departments. Our analysis includes over 500,000 quotes across 46 providers and 473 ZIP codes.

On This Page
This pages cites coverage add-on costs and average costs ranges for liability coverage. Add-on cost came directly from insurance company online quotes. Liability policy cost ranges were averaged from our data base of quotes with the driver profile below.

Driver Profile

To estimate average annual auto insurance rates, we used this sample driver:

40-year-old male
Toyota Camry LE
Clean driving record
12,000 miles driven annually

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About Mark Fitzpatrick

Mark Fitzpatrick, a Licensed Property and Casualty Insurance Producer, is MoneyGeek's resident Personal Finance Expert. With over five years of experience analyzing the insurance market, he conducts original research and creates tailored content for all types of buyers. His insights have been featured in publications like 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.

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