How Much Car Insurance Do You Need?
Updated May 28, 2026 · 5 min read
Every state sets a legal minimum for car insurance, but minimums are designed to be the cheapest legal option — not the amount that actually protects you. Here's how to think about how much coverage you really need.
Start with liability — then go higher
Your state minimum liability might be something like 25/50/25. The problem: a single serious accident can easily produce medical bills well beyond $25,000 per person. If you cause an accident that exceeds your limits, you are personally responsible for the difference — which can mean your savings, wages, or assets.
A common recommendation is to carry liability limits of at least 100/300/100 if you have assets to protect. The jump in premium from minimum limits is often smaller than people expect, because the first dollars of coverage are the most expensive.
Decide on collision and comprehensive
These cover your car. Use a simple test:
If your car were totaled tomorrow, could you comfortably pay to replace it out of pocket?
- No → collision and comprehensive are usually worth it.
- Yes, easily (older, low-value car) → you might skip them and save the premium.
If you lease or finance, the lender will require both regardless.
Choose a deductible you can actually pay
Your deductible is what you pay before insurance kicks in on a collision or comprehensive claim. A higher deductible ($1,000 vs $500) lowers your premium — but only choose an amount you could cover in an emergency.
Consider the extras worth having
Depending on your situation, these add real protection:
- Uninsured/underinsured motorist — protects you if an at-fault driver has no (or too little) insurance. Required in some states.
- Gap insurance — if you owe more on your loan than the car is worth, this covers the difference if it's totaled.
- Medical payments / PIP — helps with your own medical costs after a crash.
The bottom line
Treat your state minimum as the floor, not the target. Match your liability limits to what you'd want to protect, add collision and comprehensive if replacing your car would hurt, and pick a deductible you can afford. Then compare quotes — the right amount of coverage is only a good deal at the right price.