How Much Car Insurance Do I Need in 2026?

You need at least your state's legal minimum, but the amount you need to protect your assets will depend on your asset profile and lender requirements, if you lease or finance.
Find out how much car insurance you need and save on car insurance today.

Written by Mark Fitzpatrick

Updated: May 10, 2026

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Why the Right Amount of Car Insurance Is Important

Getting your liability limits right is one of the most important decisions you make as a driver. Too little leaves you personally responsible after a serious at-fault accident. Too much means paying for more protection than your assets require.

As Mark Friedlander of the Insurance Information Institute puts it: "State minimums were set years ago and have not kept up with real costs. A minor accident with injuries can easily exceed what minimum coverage pays, leaving you personally liable for the difference." The goal is matching your limits to your actual asset level, not defaulting to the minimum or the maximum.

What Are Liability Limits and How Much Do You Need?

To drive your car legally, you need at least the minimum amount of liability car insurance required in your state, but the right amount depends on your assets.

Liability insurance pays for damage you cause in a crash. Bodily injury liability covers medical expenses for people you injure. Property damage liability covers repairs or replacement for the vehicle or property you hit. It does not pay for damage to your own car. Limits are written as three numbers. A 100/300/100 policy means $100,000 per person for bodily injury, $300,000 per accident for bodily injury and $100,000 for property damage.

Your liability limits should cover the assets you have, including savings, home equity and future earnings. Here is the right starting point for how much you need by asset level:

Under $50,000 in assets: We recommend 50/100/50 if you can afford it.
$50,000 to $500,000 in assets: Get at least 100/300/100. Those at the higher end should consider 250/500/250.
$500,000 to $5,000,000 in assets: You need 250/500/250 or higher. Umbrella coverage is strongly recommended at this level, typically $150 to $300 per year for $1 million in protection above your auto limits.
$5,000,000 or more in assets: Work with an insurance broker on a customized umbrella and liability limits of 250/500/250 or more.

Liability coverage requirements vary by state. Find your state in the table below to see your minimums. States only set minimums for liability coverage. Full coverage is never legally required, but is often the right choice depending on your situation. Some states also require additional coverages such as personal injury protection (PIP), medical payments (MedPay) or uninsured motorist coverage.


Florida	No BI required / PD: 10	PIP: $10,000 (required)
Louisiana	15/30/25
Pennsylvania	15/30/5	MedPay: $5,000 (required); UM available
Iowa	20/40/15
Alabama	25/50/25
Arizona	25/50/15
Arkansas	25/50/25
Colorado	25/50/15
Connecticut	25/50/25	UM/UIM: 25/50 (required)
Delaware	25/50/10	PIP: $15,000/$30,000
Georgia	25/50/25
Idaho	25/50/15
Illinois	25/50/20	UM/UIM: 25/50 (required)
Indiana	25/50/25	UM: 25/50 (required)
Kansas	25/50/25	PIP: $4,500 medical; UM: 25/50
Kentucky	25/50/25	PIP: $10,000 (required)
Massachusetts	25/50/30	PIP: $8,000; UM: 25/50
Mississippi	25/50/25
Missouri	25/50/25	UM: 25/50 (required)
Montana	25/50/20
Nebraska	25/50/25	UM/UIM: 25/50 (required)
Nevada	25/50/20
New Hampshire	25/50/25	Insurance optional; FR amounts apply
New Mexico	25/50/10
New York	25/50/10	PIP: $50,000; UM: 25/50
North Dakota	25/50/25	PIP: $30,000; UM/UIM: 25/50
Ohio	25/50/25
Oklahoma	25/50/25
Oregon	25/50/20	PIP: $15,000; UM: 25/50
Rhode Island	25/50/25
South Carolina	25/50/25	UM: 25/50 (required)
South Dakota	25/50/25	UM/UIM: 25/50 (required)
Tennessee	25/50/25
Vermont	25/50/10	UM/UIM: 50/100 (required)
Washington	25/50/10
Washington D.C.	25/50/10	UM: 25/50 (required)
West Virginia	25/50/25	UM: 25/50 (required)
Wisconsin	25/50/10	UM: 25/50 (required)
Wyoming	25/50/20
California	30/60/15	UM/UIM if purchased: 30/60
Maryland	30/60/15	PIP: $2,500; UM: 30/60
Minnesota	30/60/10	PIP: $40,000; UM/UIM: 25/50
Texas	30/60/25
Utah	30/65/25	PIP: $3,000; UM/UIM if purchased: 30/65
New Jersey	35/70/25	PIP: $15,000; UM/UIM: 35/70
Hawaii	40/80/20	PIP: $10,000 (required)
Alaska	50/100/25
Maine	50/100/25	UM/UIM: 50/100; MedPay: $2,000
Michigan	50/100/10	PIP: Required (various levels)
North Carolina	50/100/50	UM/UIM: 50/100 (required)
Virginia	50/100/25	UM/UIM if purchased: 50/100

WHY STATE MINIMUMS ARE PROBABLY NOT ENOUGH LIABILITY

One common mistake drivers make is choosing state minimum coverage to save a few dollars per month, not realizing a single at-fault accident can generate more in claims than minimum coverage pays.

Here is what that looks like in practice. A driver with $180,000 in home equity causes an accident with $75,000 in injuries and $30,000 in property damage, a $105,000 total claim. With 25/50/25 minimums, insurance pays $50,000 and the driver owes $55,000 personally. A court can collect that from home equity, savings or future wages. With 100/300/100, insurance covers the full $105,000 and the driver owes nothing. The monthly premium difference between those two outcomes is $30 to $50.

How Much You Need By Coverage Type

The table below maps each coverage type to the asset tier it is designed to protect. Find the column that matches your asset profile and use it as your starting point before adjusting for lender requirements and state rules.


Uninsured motorist	Match liability limits or state minimum	100/300	250/500
Umbrella policy	No	No	Yes
Est. monthly cost	$25–$125	$100–$250	$150–$250+
Liability limits	50/100/50 or state minimum if higher	100/300/100	250/500/250
Personal injury protection	50/100/50 or state minimum if higher	$25,000 or state minimum if you have good health insurance	$50,000+ or state minimum with good health insurance
Full coverage (Collision & Comprehensive)	Yes with $1,000 deductible if car worth $5,000+. Required if financed or leased.	Yes, $1,000 deductible	Yes, $500 deductible

MoneyGeek's coverage recommendations are based on analysis of thousands of car insurance purchases across all driver profiles. Cost information is derived from over 52 million quotes across varying coverage levels, giving us a broad view of what drivers actually pay at each tier of protection. Mark Fitzpatrick, a licensed insurance producer, and Mark Friedlander, an insurance industry expert, bring direct experience working with thousands of customers to help people make a balanced cost versus protection decision.

Determine How Much Car Insurance Do You Need

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Do You Need Full Coverage (Comprehensive & Collision)?

Full coverage adds collision and comprehensive coverage to your policy. Collision covers accidents with other vehicles or objects. Comprehensive covers theft, weather, vandalism and animal damage. Full coverage adds $50 to $250 monthly depending on your location, car model and driving record. In our analysis, 79% of drivers who shop at MoneyGeek choose full coverage.

Get full coverage if:

Your car is financed or leased. Your lender requires it. See below for requirements.
You can't afford to repair or replace your car out of pocket if it was in an at-fault accident
Your car is newer or has high repair costs. Newer vehicles lose value quickly in the first few years and repair costs are higher, making full coverage worth having.
You live in an area with high theft rates, severe weather or flood risk

Consider dropping full coverage if:

Your annual comprehensive and collision premium plus your deductible is close to your car's current value, full coverage is not worth buying. On a $4,000 car with $2,000 in comp and collision premiums, you spend half the car's value every year without filing a claim. Add a $1,000 deductible on top and dropping coverage makes more financial sense. Check your car's value at each renewal using Kelley Blue Book. Learn more about when to drop full coverage.

Deductibles: Pick a deductible you can afford to pay out of pocket. A $500 deductible lowers your out-of-pocket costs if you file a claim but raises your monthly premium. A $1,000 deductible does the opposite. If you have a clean record and rarely file claims, the premium savings from a $1,000 deductible pay for themselves within two to three years.

How Much Car Insurance You Need for Financed Cars

If you are financing or leasing your car, your lender sets your minimum coverage requirements, not your state. Most lenders require 100/300/100 liability limits, full coverage and a $500 deductible. If you drop below those requirements, your lender will place insurance on your behalf at two to three times the standard cost.

Gap insurance covers the difference between what you owe and what your car is worth if it is totaled. It is worth having in the first two to three years of any loan, and buying it through your insurer is almost always cheaper than buying it from the dealer. Check your loan or lease agreement before purchasing a policy to confirm the exact requirements.

Other Car Insurance Coverage You Need or Should Consider

Here are other car insurance coverages you need depending on your location or should consider based on your driver type, location and risk tolerance. Below we explain each coverage type and when it makes sense to add it to your policy.

Uninsured Motorist Coverage

This coverage is required in 22 states and we recommend having it even if your state doesn't require it because about 15% of drivers are uninsured. This pays for medical expenses and property damage if you are hit by an uninsured or underinsured motorist. You should match the UM limits to your liability limits. This is one of the most overlooked coverages we see and drivers in states where it's not required frequently skip it, then have no protection when an uninsured driver totals their car.

Personal Injury Protection (PIP)

You need to get personal injury protection insurance in 12 states, and it’s optional in 6 others. This covers your medical bills and lost wages after an accident, regardless of fault. Unlike liability insurance, PIP covers your expenses, not those of other drivers. PIP is most valuable if you have high health insurance deductibles or no health insurance.

MedPay

MedPay covers your medical bills and your passengers' medical bills regardless of fault, up to your coverage limit. It makes sense over PIP if you have good health insurance but want an extra safety net for accident injuries, since MedPay is simpler and cheaper than PIP. MedPay limits are often set too low. We recommend at least $5,000, as emergency room visits alone can exceed the $1,000 or $2,000 limits many drivers default to when purchasing a policy.

Gap Insurance

If you're financing or leasing a new car, gap insurance covers the difference between what you owe on your loan and what your car is worth if it's totaled. Your lender may require it and it's valuable during the first three years of your loan when you're most likely to owe more than the car is worth.

Umbrella Policy

If your assets exceed your auto liability limits, an umbrella policy adds a layer of protection above them. It costs $150 to $300 per year for $1 million in coverage and is worth having if you own a home or have assets above $300,000.

How Much Insurance Do I Need: FAQ

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).

How much liability insurance do I need to protect my house in the case of an accident?

To protect a home, carry liability limits at least equal to your total net worth, including your home's equity. For most homeowners, that means 100/300/100 at minimum, and a umbrella policy if your assets exceed $300,000, since a serious at-fault accident can put your home equity at risk in a judgment.

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.

What insurance do I need if I drive for Uber/Lyft?

Personal auto policies exclude periods when the app is on but no passenger is assigned. Add rideshare coverage to fill that gap; once matched and en route, the rideshare company’s policy generally applies.

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About Mark Fitzpatrick

Mark Fitzpatrick, a Licensed Property and Casualty (P&C) Insurance Producer in Connecticut, is MoneyGeek's resident insurance expert. He has analyzed the insurance market for almost a decade, first with LendingTree and now with MoneyGeek, conducting original research on hundreds of insurance companies and millions of insurance rates for insurance shoppers.

He writes about economics and insurance on MoneyGeek, breaking down complex topics so people can have confidence in their purchase. Like all MoneyGeek analysts, Mark collects and analyzes independent cost and consumer experience data on insurance companies to provide objective recommendations in our content that are independent of any of MoneyGeek's insurance company partnerships.

His insights on products ranging from car, home and renters insurance to health and life insurance have been featured in The Washington Post, The New York Times and NPR, among others.

Mark holds a master’s degree in economics and international relations from Johns Hopkins University and a bachelor’s degree from Boston College. He started his career working in financial risk management at State Street before transitioning to the analysis of the personal insurance market. He's also a five-time Jeopardy champion!

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