How Much Car Insurance Do You Need and What Coverages Should You Buy?

Q: 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.

The coverage you need depends on certain factors explained below. MoneyGeek recommends 100/300/100 liability coverage with comprehensive and collision (full coverage) for most drivers. You may need additional coverage add-ons in certain circumstances.

Find out if you're overpaying for car insurance below.

By Mark Fitzpatrick

Reviewed by Mark Friedlander

Edited by Venus Zoleta

Updated: May 6, 2025

Advertising & Editorial Disclosure

Key Takeaways

Most drivers need 100/300/100 liability coverage with comprehensive and colliision (full coverage) car insurance. This includes liability coverage if you damage other cars or property and comprehensive and collision which protect your car in the case of an accident, theft, or weather damage.

At a minimum, you need to meet your states liability coverage requirements to drive legally. Each state has minimum insurance requirements and certain states required coverage add-ons. However, most states require far less coverage than you need to protect yourself and your assets.

You may need extra coverages for better financial protection and convenience, including gap coverage for leased vehicles, roadside assistance, new car replacement, personal injury protection, and uninsured motorist coverage. Read about these coverage below to determine if you need them.

How Much Car Insurance Do You Need?

The recommendations below come from a team of Licensed Property and Casualty Insurance Producers and our MoneyGeek Advisory Counsel which has over 50 years of experience in the car insurance industry.

The Insurance Information Institute high-level recommendations for how much car insurance is enough:

Meet state law requirements (explained below)
Protect your assets and avoid financial consequences of a serious accident by considering full coverage and optional add-on coverage
Meet lender requirements (if you finance or lease)

While each buyer should evaluate their personal financial situation, below is a summary recommendation of how much car insurance you need and what coverage you should buy.

Recommendation for How Much Car Insurance You Need

Coverage	Basic Protection	Good Protection	Premium Protection
Liability Car Insurance	State minimum or 50/100/50	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	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 Recommend	Recommended (For vehicles under 2 years old)
Umbrella Policy	Not Required	Not Required	Recommended

Four Common Coverage Types Explained

Insurance providers standardize coverage into four main categories, with multiple coverage types within each category. Here's what each one covers and why you might need it:

1
Liability Coverage (Legally Required)
Liability coverage protects you financially when you're at fault in an accident, covering two main components:
- Bodily injury liability: Pays for others' injuries, including medical costs, lost wages, and legal fees when you're responsible for an accident.
- Property damage liability: Covers damage to others' vehicles or property. Higher limits cost surprisingly little extra but provide significantly more protection against expensive claims involving multiple vehicles or valuable property.
- What the 100/300/100 number mean: The first 100 refers to the bodily injury liability limit per person ($100,000), 300 refers to the bodily injury liability per accident ($300,000), and 100 refers to the property damage liability ($100,000)
Liability insurance is required in 49 states, New Hampshire is the exception.
MoneyGeek expert recommendation: Most drivers need 100/300/100. You can choose less if you have very low assets and are financially constrained or more (e.g. 250/500/250 if you have high assets.
2
Full Coverage (Comprehensive and Collision)
These two coverages protect your own vehicle and are typically presented together as "full coverage" when combined with liability:
- Collision coverage: Pays to repair or replace your vehicle after crashes with other vehicles or objects, regardless of fault.
- Comprehensive coverage: Protects against virtually everything else that might damage your car—theft, vandalism, fire, flood, hail, falling trees, and animal strikes.
These coverages are important for newer vehicles and required for those with loans/leases. Both coverages require choosing a deductible—the amount you pay before insurance covers the rest. Higher deductibles reduce premiums but increase your out-of-pocket costs when filing claims. For example, increasing your deductible from $500 to $1,000 can save approximately 20-30% on these coverage portions.
MoneyGeek expert recommendation: Most drivers need comprehensive and collision coverage unless they driver a car valued at less than $3,000 and have the ability to pay for their own repairs for their car.
3
Medical coverage options
These coverages handle injury expenses for you and your passengers:
- Personal Injury Protection (PIP): Required in "no-fault" states mentioned below, PIP covers medical expenses, lost wages, and sometimes funeral costs regardless of who caused the accident.
- Medical Payments Coverage: Similar to PIP but typically with fewer benefits and lower limits. Covers medical expenses regardless of fault, often with no deductible.
These coverages work alongside health insurance but often cover things health insurance doesn't, like dental injuries and funeral costs.
MoneyGeek expert recommendation: Unless required in your state (see list below), most drivers don't need this coverage if they have solid health insurance and disability. You shold add it if you want premium protection.
4
Uninsured/Underinsured Motorist Coverage
This protection activates when you're hit by a driver with insufficient or no insurance:
- Uninsured motorist bodily injury: Covers your medical costs when hit by an uninsured driver
- Underinsured motorist bodily injury: Provides additional coverage when the at-fault driver's insurance is insufficient
The national uninsured driver rate has increased to approximately 12%, with rates exceeding 20% in some states. It's relatively inexpensive coverage that protects against a common risk.
MoneyGeek expert recommendation: Most drivers need this coverage to protect your car against uninsured drivers. Its is required in certain states (mentioned below).

Determine How Much Car Insurance You Need

Take our four-step quiz to learn the required and optimal level of car insurance for you.

Enter Your ZIP Code

Please enter a valid US ZIP Code

How Much Liability Coverage Do You Need?

Determining your liability coverage is the first decision when determining how much insurance you need.

Factors that should drive your decision for how much you need

Asset protection: Choose limits high enough to protect your home, savings, and investments
Financial situation: Higher income and more assets require higher limits
Risk exposure: Consider how much you drive and accident risk
Vehicle type: Expensive or heavy vehicles that could cause significant damage warrant higher limits

MONEYGEEK RECOMMENDATION: HOW MUCH LIABILITY DO YOU NEED?

100/300/100 coverage provides good protection for most households. This liability amount costs around $1,200 annually on average when combined with full coverage or about $600 for liability-only policy, but provides 4-10 times more protection than state minimums. Those with high assets should consider 250/500/250.

Liability Cost by Coverage Amount

Below are the car insurance cost ranges by liability coverage amount when combined with comprehensive and collision (full coverage):

Coverage Level	Best For	Typical Annual Cost
State Minimum	Not recommended, unless you are struggling to afford insurance	$500-$700
50/100/50	Budget-conscious drivers, those will less assets	$700-$900
100/300/100	Most drivers	$1000-$1500
250/500/100+	High-net-worth individuals	$1500+

Do You Need Full Coverage (Comprehensive and Collision)?

The main consideration for comprehensive and collision coverage is your vehicle's value:

Required for: Financed/leased vehicles (lender requirement)
Probably skip for: Vehicles worth less than $3,000. 10% rule: If annual premiums for comprehensive and collision exceed 10% of your car's value, consider dropping these coverages.
Strongly recommended for:
- Vehicles less than 10 years old or worth more than $3,000-4,000
- Areas with high theft rates
- Areas prone to natural disasters or bad weather
- You wouldn't be able to afford repairs out-of-pocket

Typical Full Coverage Cost: Full coverage (liability + comprehensive + collision) with a $1,000 deductible costs approximately $1,300 annually, compared to about $600 for liability-only coverage

MONEYGEEK RECOMMENDATION DO YOU NEED FULL COVERAGE?

Most drivers need full coverage and should add collision and comprehensive. This protects your vehicle. If you drive a low value vehicle, typically below $3,000, and have the money to buy a new car or repair it in the case of a bad accident, you can consider dropping this coverage.

Add-On Policies You May Need or Want

Option add-ons can give you peace of mind and convenience in the case of an accident. These optional coverages enhance your policy for specific situations:

Roadside assistance: Covers emergency services like towing, battery jumps, and lockout assistance for $5-15 monthly. The most frequently purchased add-on with 60-70% of insured drivers selecting it.
Rental car reimbursement: Pays for a rental vehicle while yours is being repaired after a covered claim, typically costing $5-10 monthly. The second most popular add-on with 50-60% adoption rate.
Gap insurance: Covers the difference between your car's value and loan balance if totaled. Required for most leased vehicles and important for financed vehicles that may be worth less than the remaining loan balance. Costs approximately $20-40 annually.
New car replacement: Provides a brand-new vehicle of the same make and model if yours is totaled within the first 1-2 years of ownership. Adds 5-10% to comprehensive premiums.
OEM parts coverage: Ensures repairs use manufacturer parts rather than aftermarket components. Particularly valuable for luxury vehicles.

MONEYGEEK RECOMMENDATION: WHAT COVERAGE ADD-ONS DO YOU NEED?

With exception of GAP coverage which is required for leased vehicles, adding these coverage types is personal preference. We recommend new car replacement for cars less than two years old and rental car reimbursement if you don't have alternative transportation and to drive often.

Required Coverage You Need For a Finance or Leased Car

When you finance or lease a vehicle, the lender typically requires certain coverages. They will ask for proof of coverage.

When financing a vehicle, lenders typically require:

Full coverage insurance: Includes liability insurance, comprehensive, and collision
Deductible limits: Maximum deductibles ($500 or $1,000)
Continuous coverage: No lapses allowed

Leasing companies have stricter requirements:

Higher liability limits: Often 100/300/50 or higher
Lower deductibles: Usually maximum of $500
Gap insurance: Usually required

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 2-3 years when the gap between vehicle value and loan balance is largest due to initial auto depreciation
Typically costs: $20-$40 annually

What Deductible Do You Need?

MoneyGeek expert recommendation: You should choose a $500 or $1,000 deductible. If you choose the higher amount you will save $150-$300 per year, but make sure you have an emergency fund to pay it.

A deductible is the amount you pay out-of-pocket before insurance coverage pays for a claim:

Applies separately to comprehensive and collision claims
Paid each time you file a claim
Higher deductibles mean lower premiums but more out-of-pocket costs

MONEYGEEK RECOMMENDATION: CHOOSING A DEDUCTIBLE

You should choose a $500 or $1,000 deductible. If you choose the higher amount you will save $100-$200 per year, but make sure you have an emergency fund to pay it in the case of an at-fault accident.

Minimum Car Insurance Requirements by State

Nearly every state in the U.S. requires minimum liability coverage. Thirteen states personal injury protection (PIP) to cover medical expenses. Twenty states require uninsured/underinsured motorist coverage, ensuring protection when another driver has no insurance or insufficient coverage.

State	Requirements
Alabama	$25,000 bodily injury liability per person $50,000 bodily injury liability per accident $25,000 property damage liability per accident
Alaska	$50,000 bodily injury liability per person $100,000 bodily injury liability per accident $25,000 property damage liability per accident
Arizona	$25,000 bodily injury liability per person $50,000 bodily injury liability per accident $15,000 property damage liability per accident
Arkansas	$25,000 bodily injury liability per person $50,000 bodily injury liability per accident $25,000 property damage liability per accident
California	$30,000 bodily injury liability per person $60,000 bodily injury liability per accident $15,000 property damage liability per accident
Colorado	$25,000 bodily injury liability per person $50,000 bodily injury liability per accident $15,000 property damage liability per accident
Connecticut	$25,000 bodily injury liability per person $50,000 bodily injury liability per accident $25,000 property damage liability per accident $25,000 uninsured/underinsured motorist coverage per person $50,000 uninsured/underinsured motorist coverage per accident
Delaware	$25,000 bodily injury liability per person $50,000 bodily injury liability per accident $10,000 property damage liability per accident $15,000 personal injury protection per person $30,000 personal injury protection per accident
District of Columbia	$25,000 bodily injury liability per person $50,000 bodily injury liability per accident $10,000 property damage liability per accident $25,000 uninsured/underinsured motorist coverage per person $50,000 uninsured/underinsured motorist coverage per accident $5,000 uninsured/underinsured motorist property damage coverage (subject to $200 deductible)
Florida	$10,000 property damage liability per accident $10,000 personal injury protection per person
Georgia	$25,000 bodily injury liability per person $50,000 bodily injury liability per accident $25,000 property damage liability per accident
Hawaii	$20,000 bodily injury liability per person $40,000 bodily injury liability per accident $10,000 property damage liability per accident $10,000 personal injury protection per person
Idaho	$25,000 bodily injury liability per person $50,000 bodily injury liability per accident $15,000 property damage liability per accident
Illinois	$25,000 bodily injury liability per person $50,000 bodily injury liability per accident $20,000 property damage liability per accident $25,000 uninsured/underinsured motorist coverage per person $50,000 uninsured/underinsured motorist coverage per accident
Indiana	$25,000 bodily injury liability per person $50,000 bodily injury liability per accident $25,000 property damage liability per accident
Iowa	$20,000 bodily injury liability per person $40,000 bodily injury liability per accident $15,000 property damage liability per accident
Kansas	$25,000 bodily injury liability per person $50,000 bodily injury liability per accident $25,000 property damage liability per accident $25,000 uninsured/underinsured motorist coverage per person $50,000 uninsured/underinsured motorist coverage per accident Personal Injury Protection per Person: $4,500 per person for medical expenses $900 a month for a up to a year of disability or loss of income coverage $25 a day for in-home services $4,500 for rehabilition-related expenses $2,000 for funeral, burial or creamation expenses Other: Survivors benefits including up to $900 per month for a year for disability or loss of income and $25 per day for in-home services
Kentucky	$25,000 bodily injury liability per person $50,000 bodily injury liability per accident $25,000 property damage liability per accident $10,000 personal injury protection per person
Louisiana	$15,000 bodily injury liability per person $30,000 bodily injury liability per accident $25,000 property damage liability per accident
Maine	$50,000 bodily injury liability per person $100,000 bodily injury liability per accident $25,000 property damage liability per accident $50,000 uninsured/underinsured motorist coverage per person $100,000 uninsured/underinsured motorist coverage per accident $2,000 medical payments coverage
Maryland	$30,000 bodily injury liability per person $60,000 bodily injury liability per accident $15,000 property damage liability per accident $30,000 uninsured/underinsured motorist coverage per person $60,000 uninsured/underinsured motorist coverage per accident
Massachusetts	$20,000 bodily injury liability per person $40,000 bodily injury liability per accident $5,000 property damage liability per accident $20,000 uninsured/underinsured motorist coverage per person $40,000 uninsured/underinsured motorist coverage per accident $8,000 personal injury protection per accident
Michigan	$20,000 bodily injury liability per person $40,000 bodily injury liability per accident $10,000 property damage in another state Unlimited personal injury protection per person Unlimited personal injury protection per accident $1 million property protection
Minnesota	$30,000 bodily injury liability per person $60,000 bodily injury liability per accident $10,000 property damage liability per accident $25,000 uninsured/underinsured motorist coverage per person $50,000 uninsured/underinsured motorist coverage per accident $40,000 personal injury protection per person
Mississippi	$25,000 bodily injury liability per person $50,000 bodily injury liability per accident $25,000 property damage liability per accident
Missouri	$25,000 bodily injury liability per person $50,000 bodily injury liability per accident $25,000 property damage liability per accident $25,000 uninsured/underinsured motorist coverage per person $50,000 uninsured/underinsured motorist coverage per accident
Montana	$25,000 bodily injury liability per person $50,000 bodily injury liability per accident $20,000 property damage liability per accident
Nebraska	$25,000 bodily injury liability per person $50,000 bodily injury liability per accident $25,000 property damage liability per accident $25,000 uninsured/underinsured motorist coverage per person $50,000 uninsured/underinsured motorist coverage per accident
Nevada	$25,000 bodily injury liability per person $50,000 bodily injury liability per accident $20,000 property damage liability per accident
New Hampshire	Car insurance is optional in this state, but if you do buy it it must have these limits. $25,000 bodily injury liability per person $50,000 bodily injury liability per accident $25,000 property damage liability per accident $25,000 uninsured/underinsured motorist coverage per person $50,000 uninsured/underinsured motorist coverage per accident $25,000 uninsured/underinsured motorist property damage coverage $1,000 medical payments coverage
New Jersey	$5,000 property damage liability per accident $15,000 personal injury protection per person, per accident
New Mexico	$25,000 bodily injury liability per person $50,000 bodily injury liability per accident $10,000 property damage liability per accident
New York	$25,000 bodily injury liability per person $50,000 bodily injury liability per accident $10,000 property damage liability per accident $25,000 uninsured/underinsured motorist coverage per person $50,000 uninsured/underinsured motorist coverage per accident $50,000 personal injury protection per person Other: $50,000 liability for death per person. $100,000 liability for death per accident.
North Carolina	$30,000 bodily injury liability per person $60,000 bodily injury liability per accident $25,000 property damage liability per accident $30,000 uninsured/underinsured motorist coverage per person $60,000 uninsured/underinsured motorist coverage per accident $25,000 uninsured/underinsured motorist property damage coverage
North Dakota	$25,000 bodily injury liability per person $50,000 bodily injury liability per accident $25,000 property damage liability per accident $25,000 uninsured/underinsured motorist coverage per person $50,000 uninsured/underinsured motorist coverage per accident $30,000 personal injury protection per person
Ohio	$25,000 bodily injury liability per person $50,000 bodily injury liability per accident $25,000 property damage liability per accident
Oklahoma	$25,000 bodily injury liability per person $50,000 bodily injury liability per accident $25,000 property damage liability per accident
Oregon	$25,000 bodily injury liability per person $50,000 bodily injury liability per accident $20,000 property damage liability per accident $25,000 uninsured/underinsured motorist coverage per person $50,000 uninsured/underinsured motorist coverage per accident $15,000 personal injury protection per person
Pennsylvania	$15,000 bodily injury liability per person $30,000 bodily injury liability per accident $5,000 property damage liability per accident $5,000 medical payments coverage
Rhode Island	$25,000 bodily injury liability per person $50,000 bodily injury liability per accident $25,000 property damage liability per accident *or $75,000 combined single limit
South Carolina	$25,000 bodily injury liability per person $50,000 bodily injury liability per accident $25,000 property damage liability per accident $25,000 uninsured motorist coverage per person $50,000 uninsured motorist coverage per accident
South Dakota	$25,000 bodily injury liability per person $50,000 bodily injury liability per accident $25,000 property damage liability per accident $25,000 uninsured/underinsured motorist coverage per person $50,000 uninsured/underinsured motorist coverage per accident
Tennessee	$25,000 bodily injury liability per person $50,000 bodily injury liability per accident $15,000 property damage liability per accident
Texas	$30,000 bodily injury liability per person $60,000 bodily injury liability per accident $25,000 property damage liability per accident
Utah	$30,000 bodily injury liability per person $65,000 bodily injury liability per accident $25,000 property damage liability per accident $3,000 personal injury protection per person $30,000 uninsured motorist coverage per person $65,000 uninsured motorist coverage per accident
Vermont	$25,000 bodily injury liability per person $50,000 bodily injury liability per accident $10,000 property damage liability per accident $50,000 uninsured/underinsured motorist coverage per person $100,000 uninsured/underinsured motorist coverage per accident $10,000 uninsured/underinsured motorist property damage coverage
Virginia	$50,000 bodily injury liability per person $100,000 bodily injury liability per accident $25,000 property damage liability per accident
Washington	$25,000 bodily injury liability per person $50,000 bodily injury liability per accident $10,000 property damage liability per accident
West Virginia	$25,000 bodily injury liability per person $50,000 bodily injury liability per accident $25,000 property damage liability per accident $25,000 uninsured/underinsured motorist coverage per person $50,000 uninsured/underinsured motorist coverage per accident $25,000 uninsured/underinsured motorist property damage coverage
Wisconsin	$25,000 bodily injury liability per person $50,000 bodily injury liability per accident $10,000 property damage liability per accident $25,000 uninsured/underinsured motorist coverage per person $50,000 uninsured/underinsured motorist coverage per accident
Wyoming	$25,000 bodily injury liability per person $50,000 bodily injury liability per accident $20,000 property damage liability per accident

*Note: Full coverage insurance, which includes comprehensive and collision coverages, isn’t required by law in any state. However, if you finance or lease your vehicle, your lender or leasing company may require you to maintain full coverage.

States That Require Additional PIP and UM Coverage

Certain states require that you add PIP and UM insurance to your policy to have legal car insurance. These coverages are moderately priced at about $50-$150 annually each, but will add to your policy cost.

1
States requiring PIP:
Personal Injury Protection (PIP) covers medical expenses, lost wages, and essential services for you and your passengers regardless of who caused the accident. PIP is primarily required in no-fault insurance states, where each driver's insurance covers their own injuries regardless of who caused the accident.
- Delaware, Florida, Hawaii, Kansas, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Oregon, Pennsylvania, Utah
2
States requiring Uninsured Motorist coverage:
Uninsured Motorist coverage protects you if you're in an accident with a driver who has no insurance by covering your medical expenses and, in some states, property damage.
- Connecticut, District of Columbia, Illinois, Kansas, Maine, Maryland, Massachusetts, Minnesota, Missouri, Nebraska, New Hampshire, New Jersey, New York, North Carolina, North Dakota, Oregon, South Carolina, South Dakota, Vermont, Virginia, West Virginia, Wisconsin
3
States requiring Underinsured Motorist coverage:
Underinsured Motorist coverage pays for your expenses when you're hit by a driver whose insurance limits are too low to cover all your damages.
- Connecticut, Maine, Maryland, Massachusetts, Minnesota, Nebraska, New Jersey, North Carolina, North Dakota, Oregon, South Dakota, Vermont, Virginia, Wisconsin

Do You Need an Umbrella Policy?

An umbrella policy is extra liability coverage that layers on top of your auto (and often home or renters) insurance, paying any lawsuit costs that exceed your underlying limits—typically in $1 million chunks up to $5 million or more.

How Umbrella Polices Work
Your auto policy pays first when you’re liable for injuries or property damage. If a settlement is higher than those limits, the umbrella policy covers the excess—usually starting at $1 million to several million.

Who Should Get an Umbrella Policy
Anyone with significant assets, high income, or added risk from teen drivers, rental property, or lots of driving should consider an umbrella policy. It adds extra liability protection beyond your auto or home insurance, helping shield your savings and future earnings from costly lawsuits.

When Is State Minimum Car Insurance Coverage Enough?

Though state minimums are less expensive, we strongly recommend higher liability coverage.

Here is a real life scenario: You have minimum 25/50/25 auto liability coverage and cause an accident that totals a new Range Rover Sport ($100,000 value) and results in $25,000 of medical expenses for the other driver. Your insurance would only cover $25,000 of the vehicle damage and $25,000 of medical costs, leaving you personally responsible for the remaining $75,000 for the vehicle and $25,000 in medical costs.

You could be sued for this amount plus potential additional damages for pain and suffering or lost wages. This is why higher liability limits provide important protection for your personal assets.

How Much Insurance Do You 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.

How much liability coverage do I need to protect my assets?

You should carry liability coverage at least equal to your net worth (your assets minus debts). Most insurance experts recommend minimum liability limits of 100/300/100 for adequate protection.

Is basic, state minimum car insurance enough?

State minimum liability insurance often fails to provide adequate financial protection. MoneyGeek suggests opting for 100/300/100 liability coverage. Full coverage insurance may be required if you're leasing or financing your car.

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 1-2 years of ownership.

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.

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.

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%.

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 or long-term financing, and is often required for leased vehicles.

How do I avoid a gap in coverage when switching car insurance companies?

Purchase your new policy before canceling your old one, setting the new policy's start date to match or overlap with your old policy's cancellation date. Even a single day without coverage can result in higher rates and potential legal penalties.

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!

Passionate about economics and insurance, he aims to promote transparency in financial topics and empower others to make confident money decisions.

Read Full Bio »

How Much Car Insurance Do You Need and What Coverages Should You Buy?

Key Takeaways

How Much Car Insurance Do You Need?

Four Common Coverage Types Explained

Liability Coverage (Legally Required)

Full Coverage (Comprehensive and Collision)

Medical coverage options

Uninsured/Underinsured Motorist Coverage

Determine How Much Car Insurance You Need

Enter Your ZIP Code

How Much Liability Coverage Do You Need?

MONEYGEEK RECOMMENDATION: HOW MUCH LIABILITY DO YOU NEED?

Liability Cost by Coverage Amount

Do You Need Full Coverage (Comprehensive and Collision)?

MONEYGEEK RECOMMENDATION DO YOU NEED FULL COVERAGE?

Add-On Policies You May Need or Want

MONEYGEEK RECOMMENDATION: WHAT COVERAGE ADD-ONS DO YOU NEED?

Required Coverage You Need For a Finance or Leased Car

When financing a vehicle, lenders typically require:

Leasing companies have stricter requirements:

Gap insurance consideration:

What Deductible Do You Need?

MONEYGEEK RECOMMENDATION: CHOOSING A DEDUCTIBLE

Minimum Car Insurance Requirements by State

States That Require Additional PIP and UM Coverage

States requiring PIP:

States requiring Uninsured Motorist coverage:

States requiring Underinsured Motorist coverage:

Do You Need an Umbrella Policy?

When Is State Minimum Car Insurance Coverage Enough?

Compare Insurance Rates

How Much Insurance Do You Need: FAQ

How much liability coverage do I need to protect my assets?

Is basic, state minimum car insurance enough?

What insurance coverage should I get for a new or expensive car?

Is car insurance per person or by car?

How many cars can you have on your insurance policy?

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

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

How do I avoid a gap in coverage when switching car insurance companies?

Auto Insurance Recommended Coverage: Our Review Methodology

Suggest Car Insurance Coverage: Related Articles