How Much Car Insurance Do I Need?

MoneyGeek recommends 100/300/100 liability with comprehensive and collision for most drivers. Coverage needs vary by assets, vehicle, and risk tolerance.

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

By Mark Fitzpatrick

Reviewed by Mark Friedlander

Edited by Lukas Velunta

Updated: September 18, 2025

Advertising & Editorial Disclosure

Key Takeaways

Most drivers need 100/300/100 liability coverage plus comprehensive and collision insurance for complete financial protection against damage to others and your vehicle.

You must meet your state's minimum liability requirements to drive legally, but state minimums rarely provide enough financial protection for your assets.

Consider additional coverages like gap insurance, roadside assistance, personal injury protection and uninsured motorist coverage based on your needs.

How Much Car Insurance Coverage Do I Need?

You need enough car insurance to meet state laws, protect your assets, and satisfy lender requirements. Beyond the minimum liability limits set by each state, experts recommend choosing full coverage and optional add-ons to reduce financial risks after an accident. According to the Insurance Information Institute, here’s how much coverage is generally recommended:

Meet state law requirements. Each state sets minimum liability limits you must carry to drive legally.
Protect your assets. Full coverage and add-ons can help cover medical bills, property damage, and lawsuits after a serious accident.
Meet lender requirements. If you lease or finance your car, your lender may require comprehensive and collision coverage.

What Is the Recommended Car Insurance Coverage Amount?

Choosing the right coverage level depends on your budget, assets and risk tolerance. We've organized coverage into three tiers to help you find the right balance:

Basic Protection

Works for drivers with tight budgets and fewer assets to protect. You'll meet legal requirements and lender obligations while keeping costs low, but you'll face higher out-of-pocket expenses if you cause a serious accident.

Good Protection

Suits most drivers who want solid coverage without breaking the bank. This level provides enough liability coverage to protect typical assets like homes and savings accounts, plus reasonable deductibles for vehicle repairs.

Premium Protection

Is designed for high-net-worth individuals and those with expensive vehicles. Higher limits and lower deductibles provide maximum protection against lawsuits and ensure quality repairs with manufacturer parts.

Do I Need Full Coverage (Comprehensive and Collision)?

If your car is financed or leased, you must carry full coverage because it's a lender requirement. For vehicles you own outright, the decision comes down to risk tolerance. Skip full coverage if your car is worth less than $3,000 or if annual comprehensive and collision premiums exceed 10% of your vehicle's value.

Full coverage makes sense for newer vehicles (less than 10 years old) or cars worth more than $4,000. It's especially smart if you live in areas with high theft rates or severe weather, or if you can't afford $5,000 to $15,000 in unexpected repair costs.

Deductibles apply separately to each comprehensive and collision claim (you'll pay your chosen deductible amount each time you file a claim for vehicle damage).

Is State Minimum Car Insurance Coverage Enough?

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

Example of why this matters: 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 $50,000 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. Higher liability limits provide important protection for your personal assets.

Add-On Coverage You May Need or Want

Optional add-ons can give you extra protection and convenience when accidents happen. These coverages boost your policy for specific situations:

Roadside assistance: Covers emergency services like towing, battery jumps, and lockout help for $5 to $15 monthly. It's the most popular add-on; 60% to 70% of drivers choose it.
Rental car reimbursement: Pays for a rental while your car gets repaired after a covered claim, typically costing $5 to $10 monthly. This is the second most popular add-on, with 50% to 60% of drivers selecting it.
Gap insurance: Covers the difference between your car's value and loan balance if it's totaled. You'll need it for most leased cars and financed cars that might be worth less than what you still owe. Costs approximately $20 to $40 annually.
New car replacement: Gets you a brand-new car of the same make and model if yours is totaled within the first year or two. It adds 5% to 10% to your comprehensive premiums.
OEM parts coverage: Ensures repairs use manufacturer parts rather than aftermarket components. It's particularly valuable for luxury vehicles and typically costs $100 to $200 annually.

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

Auto Insurance Coverage Comparison

Coverage	Basic Protection	Good Protection	Premium Protection
Liability Car Insurance	50/100/50 or state minimum for tight budgets	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	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 a 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

Car Insurance Coverage Need by Driver Profile

How much car insurance you need depends on your driver profile and location. Our recommendations for liability coverage amounts and coverages you should buy are as follows:

Budget-Conscious Drivers

Higher deductibles and lower liability limits reduce monthly premiums. You're protected legally while minimizing costs, but 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

Families With Multiple Vehicles

Multiple drivers mean higher accident risk, but multi-car discounts offset costs. Higher liability limits protect your family's assets, and comprehensive coverage handles weather damage to vehicles parked outside.

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

High Assets / New Expensive Vehicles

Your wealth makes you a lawsuit target. Higher limits and umbrella policies protect assets beyond your home and cars. Premium coverage ensures your expensive vehicle gets proper repairs with OEM parts.

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

Teen Drivers

Teen drivers are three times more likely to cause accidents. Higher liability limits protect your family from lawsuits. Teens under 18 can't purchase insurance without a parent/guardian co-signer in most states.

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

Teen driver insurance requirements and restrictions vary significantly by state. Consult your state's Department of Motor Vehicles or insurance commissioner for specific regulations in your area.

Drivers With Accidents or Violations

Past violations make you statistically more likely to have future accidents. Don't compound the financial damage by carrying inadequate coverage. Higher limits protect you from personal bankruptcy if you cause serious harm.

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 Car Insurance Coverage 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. The minimum requirements for each state are:

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

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 to $150 annually each, but will add to your policy cost.

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.

States: Delaware, Florida, Hawaii, Kansas, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Oregon, Pennsylvania and Utah

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.

States: 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 and Wisconsin

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.

States: Connecticut, Maine, Maryland, Massachusetts, Minnesota, Nebraska, New Jersey, North Carolina, North Dakota, Oregon, South Dakota, Vermont, Virginia and Wisconsin

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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Required Coverage You Need for a Financed or Leased Car

Lenders and leasing companies require specific coverage to protect their financial interest in your vehicle. Here's what you'll need beyond basic liability insurance.

When Financing a Vehicle, Lenders 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 two to three years when the gap between vehicle value and loan balance is largest due to initial auto depreciation

Typically costs: $20 to $40 annually

How Much Car Insurance Deductible Do You Need?

MoneyGeek expert recommendation: You should choose a $500 or $1,000 deductible.

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 when you make a claim

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 increments up to $5 million or more.

How Umbrella Policies 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.

Who Should Get an Umbrella Policy
Anyone with significant assets, high income, or added risk from teen drivers, rental property, or frequent 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.

How Much Car Insurance Coverage do I Need: Bottom Line

Meeting state minimums alone often leaves you underinsured. Most drivers should carry at least 100/300/100 liability with comprehensive and collision for full protection.

Your choice of limits and deductibles should reflect your assets, vehicle value and budget. If you finance or lease, lenders will require these coverages. Comparing quotes regularly helps you find the right balance of affordability and protection.

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.

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). We recommend minimum liability limits of 100/300/100 for solid protection.

Is basic, state minimum car insurance enough?

State minimum liability insurance often doesn't provide enough financial protection. We recommend 100/300/100 liability coverage instead. You'll need full coverage 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, get full coverage with 100/300/100 liability limits, comprehensive and collision coverage with $500 to $1,000 deductibles, and gap insurance if you're financing. Consider adding new car replacement coverage, which gets you a brand-new car instead of paying depreciated value if yours is totaled in the first year or two.

How much does 100/300/100 car insurance cost?

Most drivers pay $1,000 to $1,500 annually for 100/300/100 coverage. The exact cost depends on your age, location, driving record, and vehicle type.

Do I need full coverage if my car is paid off?

You should keep full coverage if your car is worth more than $3,000 or if you can't afford to replace it with cash. Drop it only if repair costs would exceed your car's value.

What happens if I don't have enough car insurance?

You'll be personally responsible for costs that exceed your coverage limits. This can include medical bills, property damage, legal fees, and potential wage garnishment from lawsuits.

How much car insurance do I need by state?

State requirements vary, but most set minimums around 25/50/25. However, we recommend 100/300/100 regardless of your state because minimums rarely provide adequate protection.

When do I need comprehensive and collision coverage?

You need both if your car is financed or leased (lender requirement). For owned vehicles, add them if your car is worth more than $3,000 or you can't afford replacement costs.

What's the difference between 25/50/25 and 100/300/100 coverage?

25/50/25 provides $25K per person/$50K per accident for injuries and $25K for property damage. 100/300/100 provides $100K per person/$300K per accident for injuries and $100K for property damage - much better protection.

How do I know if I need an umbrella policy?

Consider umbrella coverage if you have significant assets, high income, teen drivers, or own rental property. It provides extra liability protection beyond your auto policy limits.

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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 I Need?

Key Takeaways

How Much Car Insurance Coverage Do I Need?

What Is the Recommended Car Insurance Coverage Amount?

Basic Protection

Good Protection

Premium Protection

Do I Need Full Coverage (Comprehensive and Collision)?

Is State Minimum Car Insurance Coverage Enough?

Add-On Coverage You May Need or Want

Auto Insurance Coverage Comparison

Car Insurance Coverage Need by Driver Profile

Budget-Conscious Drivers

Families With Multiple Vehicles

High Assets / New Expensive Vehicles

Teen Drivers

Drivers With Accidents or Violations

Minimum Car Insurance Coverage Requirements by State

States That Require Additional PIP and UM Coverage

States Requiring PIP

States Requiring Uninsured Motorist Coverage

States Requiring Underinsured Motorist Coverage

Determine How Much Car Insurance You Need

Enter Your ZIP Code

Required Coverage You Need for a Financed or Leased Car

When Financing a Vehicle, Lenders Require

Leasing Companies Have Stricter Requirements

Gap Insurance Consideration

How Much Car Insurance Deductible Do You Need?

Do You Need an Umbrella Policy?

Compare Auto Insurance Rates

How Much Car Insurance Coverage do I Need: Bottom Line

How Much Insurance Do I 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?

How much does 100/300/100 car insurance cost?

Do I need full coverage if my car is paid off?

What happens if I don't have enough car insurance?

How much car insurance do I need by state?

When do I need comprehensive and collision coverage?

What's the difference between 25/50/25 and 100/300/100 coverage?

How do I know if I need an umbrella policy?

Car Insurance Coverage: Related Articles