The usual recommendation for auto insurance is to purchase what you can afford and to purchase enough coverage to protect your assets and give you peace of mind at the time of an accident. As a basis, every state has financial responsibility minimums which are usually dealt with in the way of liability insurance. You must purchase the state minimum requirements but can raise the limits if you feel that your personal situation makes it necessary.

You can read below for some guidance, or try our Car Insurance Coverage Calculator.

Your choices:

• For coverages that have a limit (Bodily Injury, Property Damage, Uninsured Motorist, Medical Payments and others depending on the state), you must choose how high of a limit do you need? This will be the maximum amount of money you will have to protect you in case of an accident.
• For coverages that have a deductible (Comprehensive, Collision and others depending on the state), you must choose how low of a deductible do you choose? This is the amount of money you will have to pay out if you use that coverage.

There is no "right answer" because there are factors that affect every person. These factors are typically:

• What is your marital status?
• Do you have any drivers under the age of 25 living with you?

Each of these factors would determine if you optional coverages (in some states) like MEDPM, UM, UMPD, or PIP. Also, it will help you determine if you need higher limits to protect your assets. If you have young drivers or own a home you should select higher limits.

• What is the current value of your vehicle?
• Is your car leased, financed or owned?

Each of these factors would determine if you need physical damage coverage. The deductible amount you choose is a choice based upon how much you are willing/able to spend out of pocket at the time of a loss.

• What is your household’s annual take-home salary?
• What is the total value of your assets? 
• Do you own or rent your home?

Each of these factors help you determine your limit amounts. If you are in an accident and it is your fault then you are responsible for the damages. If you exceed your limits, then the other party will likely try to recover damages from your assets.

Our Learning Center has insurance terms, headlines and articles such as Auto Insurance Basics that can be helpful when deciding upon your auto insurance needs.