Auto & home · Guide

How much car insurance do I need? A guide to setting your limits

6 min readBy the Goodsurance editorial team Reviewed by the Goodsurance editorial team

How much car insurance you need depends on two things: what your state requires you to carry, and what it would take to protect your own finances if you caused a serious accident. State minimums are only a floor, and for many drivers they are too low to cover a bad crash. The right amount is usually enough liability coverage to shield your assets and income, plus the coverages that protect your own car and medical costs to the degree that fits your situation.

Start with your state minimum

The short version

  • Every state that requires insurance sets a minimum you must carry, usually liability.
  • Minimums are a legal floor, not a measure of how much protection you need.
  • The right amount usually means more liability than the minimum, plus coverages for your own car.
  • How much you need depends on your assets, your car, and your risk.

The first number to know is your state requirement. Most states require drivers to carry at least a set amount of liability coverage, which pays for injuries and damage you cause to others. Some states also require additional coverages, such as uninsured motorist or personal injury protection.

Meeting the minimum keeps you legal, but that is all it does. The minimum is a starting point set by law, not a judgment about how much coverage would actually protect you in a serious accident. For that, you have to look at your own situation.

In short: start with the liability and other coverages your state requires, but treat the minimum as a floor rather than the answer.

Why minimums are often not enough

The trouble with carrying only the minimum is that a serious accident can cost far more than those limits.

  • Liability limits can be exceeded. If you cause a crash with serious injuries or major property damage, costs can run past your limit, and you can be personally responsible for the rest.
  • Your assets are exposed. When damages exceed your coverage, your savings, home equity, and future income can be reached to pay the difference.
  • Minimums do not protect your own car. Liability pays for others, not for your vehicle or your own injuries, so a minimum policy can leave you without help for your own losses.

This is why many drivers carry more than the minimum. The extra coverage is aimed at the worst-case bill, not the everyday one. Please contact us to discuss your options.

In short: minimum liability can fall short in a serious crash, leaving your assets exposed and your own car and injuries uncovered.

The coverages to consider

Deciding how much insurance you need means looking at each coverage and how much of it fits your situation.

  • Liability. The core coverage for harm you cause to others. Carrying more than the minimum is often the most important step.
  • Uninsured and underinsured motorist. Protects you if the at-fault driver has no coverage or too little.
  • Collision. Pays to repair or replace your own car after a crash, regardless of fault.
  • Comprehensive. Covers non-crash damage to your car, such as theft, fire, or weather.
  • Medical coverage. Personal injury protection or medical payments coverage helps with medical costs for you and your passengers.

Which of these you need, and at what level, depends on your car, your health coverage, and your finances. Please contact us to discuss your options.

In short: consider liability, uninsured motorist, collision, comprehensive, and medical coverages, and set each to the level that fits your situation.

How to think about your liability limit

Because liability is where a single accident can do the most financial damage, it deserves the most thought.

  1. Consider what you have to protect. Add up your assets and think about your future income, since a judgment can reach both.
  2. Aim to cover a serious accident. A useful goal is enough liability to cover the kind of injuries and damage a bad crash could cause, not just the legal minimum.
  3. Consider an umbrella policy. If you need liability protection beyond what an auto policy offers, an umbrella policy can add a layer above it.
  4. Revisit it as life changes. As your assets and income grow, the amount of protection that fits tends to grow too.

Because the right limit depends on your finances, please contact us to discuss your options.

In short: set liability high enough to protect your assets and income from a serious accident, and consider an umbrella policy if you need more.

How to decide how much you need

Bringing it together, the amount of car insurance you need is the coverage that keeps you legal and protects you from a bill you could not absorb.

  1. Meet your state requirement. Start with the coverages and limits your state mandates.
  2. Raise liability to protect your finances. Move beyond the minimum to a limit that fits your assets and income.
  3. Add coverage for your own car and health as needed. Decide on collision, comprehensive, and medical coverage based on your vehicle and situation.
  4. Review it regularly. Check your coverage after major life changes so it keeps pace with your risk.

Because the right mix is personal, please contact us to discuss your options and build coverage that fits you.

In short: meet your state minimum, raise liability to protect your finances, add coverage for your car and health as needed, and review it over time.

Common questions about IRMAA appeals

Quick answers, fast .

Tap any question to expand. Each links to a fuller standalone answer.

Is the state minimum enough car insurance?

Usually not for protecting your finances. The minimum keeps you legal, but a serious accident can cost more than those limits, leaving your assets exposed. Many drivers carry more liability than the minimum, plus coverage for their own car.

How much liability coverage should I carry?

Enough to protect your assets and future income if you caused a serious accident. A useful goal is a limit that would cover the injuries and damage a bad crash could cause, and an umbrella policy can add protection above your auto limits.

Do I need collision and comprehensive coverage?

It depends on your car. Collision and comprehensive protect your own vehicle, so they tend to matter more for a newer or financed car and less for an older one you could afford to replace. Please contact us to discuss your options.

References

  1. How much auto coverage do I need?Insurance Information Institute guidance on choosing auto coverage limits and why many drivers carry more than the state minimum.
  2. Auto insuranceNAIC consumer guide to the main auto insurance coverages and how required minimums work.

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