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If you’re asking yourself, “How much car insurance do I need?” you’ve come to the right place to get answers. The short answer is that you NEED the minimum amount of car insurance required by your state to drive legally, but you SHOULD buy a policy that pays:

  • up to $100,000 for the medical bills of those you injure
  • with a $300,000 cap per accident
  • and up to $100,000 to repair other drivers’ cars and property that you damage.

If you’re not sure what that means, don’t fret, it’s all explained in detail below by Editorial Director Michelle Megna and Consumer Analyst Penny Gusner.

You can also use the tool to see auto insurance coverage recommendations based on what drivers like you have purchased.


See recommended coverage levels for drivers like you.

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How Much Auto Insurance Do I Need?

There are two correct answers to this question:

First, you need enough insurance to drive legally. Find out your state car insurance minimum requirements.

Second, you need enough car insurance to protect your life from financial ruin if you have a car accident. That can be as easy as buying the minimum coverage, in some cases, though rarely. Or it can be much more complicated.

We'll walk you through our guide on figuring this out.

Who Should Buy Minimum Levels of Liability Car Insurance?

  • Minimum liability is rarely advisable, but if you can't afford more, it's better than no insurance.
  • If you have no savings or assets, minimum liability coverage may suffice.

In most states the minimum liability required by your state is not enough to pay for serious injuries or to replace a newer car. It is only enough to drive legally.

If you own only the clothes on your back and a very old car, you can get by with just the minimum levels of liability mandated by your state. That’s because you're probably what is known as "judgment-proof." You may lose if someone decides to take you to court to pay for an accident you cause, but you have no real assets to take.

Auto Insurance Coverage Recommendations From the Experts

If you have savings or a home or even expensive jewelry and valuable collectibles, you are not judgment-proof. And you need more coverage.

To help you decide how much liability insurance you need, we've created three liability insurance levels as a rough guide. Levels of coverage offered will vary by state and by insurer. Liability insurance will not repair your own car.

In the levels below:

  • The first two numbers refer to bodily injury liability, which pays the hospital bills of anyone you injure.
  • The first number is the per-person limit.
  • The second is the per-accident limit.
  • The third number is the property damage liability limit, which would repair or replace the car of anyone you hit.

50/100/50: This level of coverage is recommended for those who have an older car, few assets, don’t drive much and are on a tight budget, for instance college students and retirees who are downsizing.

100/300/100: This is the level most financial experts say is appropriate for middle-income earners with a typical level of savings, adequate in most circumstances. The cost of liability insurance, once you have bought the basic levels, does increase, not increase exponentially. Moving to 100/300/100 will not cost twice as much as 50/100/50. In an analysis of rates, found that it costs just $74 more a year, on average.

  • The average rate for state minimum coverage is $562.
  • Bumping that up to 50/100/50 costs $640, so it’s just another $78 a year.
  • Going to 100/300/100 from 50/100/50 costs $714, so it’s only $74 yearly, or about $6 a month, to double your liability protection.

The yearly cost to boost liability up to 100/300/100 from 50/100/50 is under $100 in the District of Columbia and 38 states. The cost is over $100 a year in just 11 states. In five of those states, the cost for extra coverage is still under $110. The most expensive state for doubling your liability insurance, Louisiana, shows a $202 hike. Iowa drivers pay the least for more coverage, $26 yearly.

Enter your state in the table below to see how little rates rise when you double your liability protection.

State 50/100/50 Only 100/300/100 Only % Increase Doubling Liability $ Increase Doubling Liability
North Carolina$555$63114%$76
North Dakota$388$4219%$33
New Hampshire$572$63711%$65
New Jersey$1,003$1,10810%$105
New Mexico$523$5709%$47
New York$886$99012%$104
Rhode Island$1,010$1,16415%$154
South Carolina$581$65513%$74
South Dakota$333$37713%$44
West Virginia$650$75716%$107
Nationwide average$640$71412%$74

250/500/100: If you own an expensive home or have saved diligently, you may be worth millions even though you do not consider yourself rich. We would suggest supplementing even this high level of coverage with an umbrella liability policy that extends your protection by $1 million or more. It’s relatively cheap – a $1 million umbrella policy costs $150 to $300 yearly, on average, according to the Insurance Information Institute.

Who Should Buy Uninsured Motorist Car Insurance?

  • If you have your own health insurance and you have purchased collision coverage, you may be able to skip uninsured motorist coverages if your state allows.
  • It is a good idea to keep uninsured motorist coverages if you can afford to, because they can minimize your financial losses from deductibles and coverage caps.

Your state may require that you buy uninsured motorist bodily injury coverage, which pays your hospital bills if you are hit by an uninsured driver. Your state may require only that you be offered this coverage but allow you to turn it down.

If you buy this coverage, it typically will come in the same amounts as your own liability coverage. 

Uninsured motorist coverage costs an average of $83 a year, according to a CarInsurance rates analysis.

A few states also require uninsured motorist property damage, which usually pays for some -- but not all -- of the damage to your own car. It doesn’t cover hit-and-run accidents in most states, though.

Do you Need Comprehensive and Collision Coverage?

  • Yes, if your car is less than 10 years old.
  • Yes, if you can't afford to repair or replace your car.
  • Yes, if you live in an area prone to flooding, hail, tornadoes or animal strikes.

Comprehensive insurance pays for damage to your car from severe weather, fire, collisions with animals and theft. Collision coverage pays to repair your car if you cause an accident.

This is where car insurance for a 10 year old car comes into play. If your car is less than 10 years old, you should consider buying comprehensive and collision coverage. You should also carry comprehensive and collision insurance if your car is 10 years old or older, but worth more than $3,000, or if you can’t afford to repair or replace it.

If you owe money on your car, your lender requires you to have collision and comprehensive coverage, which would repair or replace your car. Liability insurance pays only for others’ cars.

You must choose a deductible amount for collision and comprehensive coverages. Damage below this amount is your responsibility to fix.

We recommend that you keep deductibles low while you are still making payments on a car. Once the car is paid off, build an emergency fund and raise your deductible to match it.

Comprehensive costs an average of $192 a year, collision costs an average of $526 annually, according to’s rate analysis.

Do you Need Medical Payments or Personal Injury Protection?

  • Yes, if you don't have health insurance.
  • Yes, if you can't afford or don't have the savings to live without a loss of income due to injury.

Your state, especially if it is a no-fault state, may require that you buy personal injury protection so that your injuries in a car accident are always covered up to your limits, no matter whose fault the accident was. It usually includes coverage for lost wages as well.

Medical payments coverage is required by a few states but is optional in most, paying medical expenses up to your limits.  If you don’t have your own health insurance coverage, you should consider this coverage. If you have a high-deductible health plan, medical payments may help pay the deductible. 

Personal injury protection costs an average of $198 yearly. Medical payments costs an average of $22 a year, according to’s rate analysis.

How Should you Save Money on Car Insurance?

In order of impact and potential savings, we suggest the following steps for drivers trying to save money on their car insurance bills:

  • Shop around. You will see that the rates major insurers charge the same driver in the same car can vary by hundreds, sometimes thousands, of dollars. See how much average car insurance rates can differ in your neighborhood by entering your ZIP code into our comparison tool.
  • Look for car insurance discounts.  
  • Consider a named driver exclusion if a member of your household has a high-risk driver history.
  • Raise your deductibles.
  • Drop collision and comprehensive coverage altogether if you own your car outright.
  • Drop other optional coverages such as uninsured motorist or medical payments.
  • Reduce the amount of liability coverage you are buying.

If you know what coverage you want to buy, start comparing quotes from multiple insurance companies.