How Much Car Insurance Do I Need?
- Expertise: Auto insurance, home insurance and renters insurance
- Education: University of California-Berkeley (BA in History)
Rob Bhatt is a licensed insurance agent and joined the staff of Lending Tree in 2021. Previously, he spent more than 20 years writing for and editing regional publications in California, Nevada and Washington. Rob enjoys helping readers understand how different coverages work so they can make informed purchasing decisions, and he specializes in producing research-backed content for LendingTree about auto, home and renters insurance. His work has been cited by ABC, Business Insider, MSN and Yahoo.
Most states require you to have basic car insurance to drive legally, and you’ll usually need a little more coverage for a car loan or lease. However, these requirements are not always enough.
Since everyone’s needs are different, here’s how to decide on how much car insurance is right for you.
How much car insurance do I need?
The amount of car insurance you need depends largely on your financial situation.
If you are just starting out in life, the minimum amounts your state and lender require may be enough.
However, if it’s been a while since you last adjusted your car insurance, you may now have more assets to protect, like a house, investments and/or savings.
Getting more car insurance helps you protect these assets from the large expenses that can arise out of a car accident.
As you compare car insurance quotes, ask to see how different amounts of coverage may affect your rate.
What is the minimum amount of car insurance I need?
The minimum amount of car insurance you need to drive legally will depend on your state’s insurance requirements.
- Almost every state requires liability insurance. Auto liability covers bodily injuries (BI) and property damage (PD) you may cause to others in a car accident.
- Twenty-two states and the District of Columbia also require uninsured motorist (UM) coverage. UM covers injuries you and your passengers suffer in a car accident caused by a driver without liability insurance.
- Seventeen states require you to carry personal injury protection (PIP) or medical payments (MedPay). Both cover injuries to you and your passengers, regardless of who causes the accident. PIP also covers lost wages and essential services.
Minimum car insurance requirements by state
| State | Minimum liability limits ($1,000s) | Uninsured motorist | PIP/MedPay |
|---|---|---|---|
| Alabama | 25/50/25 | Optional | Optional |
| Alaska | 50/100/25 | Optional | Optional |
| Arizona | 25/50/15 | Optional | Optional |
| Arkansas | 25/50/25 | Optional | Optional |
| California | 15/30/5 | Optional | Optional |
| Colorado | 25/50/15 | Optional | Optional |
| Connecticut | 25/50/25 | Required | Optional |
| Delaware | 25/50/10 | Optional | Required |
| District of Columbia | 25/50/10 | Required | Optional |
| Florida | $10,000 PD | Optional | Required |
| Georgia | 25/50/25 | Optional | Optional |
| Hawaii | 20/40/10 | Optional | Required |
| Idaho | 25/50/15 | Optional | Optional |
| Illinois | 25/50/20 | Required | Optional |
| Indiana | 25/50/25 | Optional | Optional |
| Iowa | 20/40/15 | Optional | Optional |
| Kansas | 25/50/25 | Required | Required |
| Kentucky | 25/50/25 | Optional | Required |
| Louisiana | 15/30/25 | Optional | Optional |
| Maine | 50/100/25 | Required | Required |
| Maryland | 30/60/15 | Required | Required |
| Massachusetts | 20/40/5 | Required | Required |
| Michigan | 50/100/10 | Optional | Required |
| Minnesota | 30/60/10 | Required | Required |
| Mississippi | 25/50/25 | Optional | Optional |
| Missouri | 25/50/25 | Required | Optional |
| Montana | 25/50/20 | Optional | Optional |
| Nebraska | 25/50/25 | Required | Optional |
| Nevada | 25/50/20 | Optional | Optional |
| New Hampshire* | 25/50/25 | Required | Required |
| New Jersey | 15/30/5 | Required | Required |
| New Mexico | 25/50/10 | Optional | Optional |
| New York | 25/50/10 | Required | Required |
| North Carolina | 30/60/25 | Required | Optional |
| North Dakota | 25/50/25 | Required | Required |
| Ohio | 25/50/25 | Optional | Optional |
| Oklahoma | 25/50/25 | Optional | Optional |
| Oregon | 25/50/20 | Required | Required |
| Pennsylvania | 15/30/5 | Optional | Required |
| Rhode Island | 25/50/25 | Required | Optional |
| South Carolina | 25/50/25 | Required | Optional |
| South Dakota | 25/50/25 | Required | Optional |
| Tennessee | 25/50/15 | Optional | Optional |
| Texas | 30/60/25 | Optional | Optional |
| Utah | 25/65/15 | Optional | Required |
| Vermont | 25/50/10 | Required | Optional |
| Virginia** | 30/60/20 | Required | Optional |
| Washington | 25/50/10 | Optional | Optional |
| West Virginia | 25/50/25 | Required | Optional |
| Wisconsin | 25/50/10 | Required | Optional |
| Wyoming | 25/50/20 | Optional | Optional |
Liability limits are separated by amounts for each person injured in an accident, all people injured in an accident and property damage.
*Car insurance is not required by law in New Hampshire.
**Virginia drivers who pay an uninsured motorist fee don’t have to get car insurance.
How much car insurance do I need for a car loan?
You’ll typically need to add collision and comprehensive coverage to your car insurance for a car loan or lease.
- Collision pays to repair damage your car sustains in a collision with another vehicle or object.
- Comprehensive covers your vehicle for theft and damage from fire, flood, vandalism, falling objects and other non-collision causes.
When do I need gap insurance?
You may need gap insurance if you’re upside down in your financing or lease your vehicle.
If your car is totaled or stolen, the most you’ll get from an insurance company is its market or resale value at the time of the loss. And since cars depreciate fast, your insurance check may be for less than the amount you still owe your lender or leasing company.
Gap insurance covers this potential shortfall.
Why would I need more car insurance than required?
Getting more car insurance than you need for your state or lender can save you from having to cover potentially huge accident expenses out of your own pocket.
Here’s how different car insurance coverages can protect your wallet and bank account.
How much liability car insurance do I need?
Your car insurance liability limits need to match or exceed your net worth, because the amounts you may owe if you ever cause an accident can add up fast.
You can be on the hook for a particularly large amount if an injured victim has to miss work and/or sues you for “pain and suffering.”
If the amount you owe an accident victim exceeds your policy’s liability limits, you may be held personally responsible for the shortfall. This, in turn, could lead to a lien on your home or a seizure of your savings or other assets.
Why would I need uninsured motorist insurance?
Even though auto liability insurance is required in nearly every state, one in seven drivers don’t have it, according to the Insurance Research Council.
This is the main reason to consider adding UM to your car insurance if your state doesn’t require it.
You can usually add underinsured motorist (UIM) coverage to your UM for more protection.
A good rule of thumb is to get UM/UIM in amounts that match your liability limits.
How much collision and comprehensive car insurance do I need?
It’s usually worth getting collision and comprehensive insurance coverage for any vehicle valued at more than a few thousand dollars, regardless of its loan status.
Most insurance companies let you add it to specific vehicles on your policy, rather than requiring you to get it for every car.
Collision and comprehensive each come with a deductible, which is your share of repair costs. As an example, if your car needs $2,000 in repairs and you have a $500 deductible, your insurance company pays $1,500.
Choosing higher deductibles lowers your insurance rate.
You may not need collision or comprehensive if:
- You can live without the vehicle if it’s stolen or totaled
- You can afford to repair or replace the vehicle out of your own pocket
- The value of your car is less(or only slightly more) than your deductible
Why do I need PIP or medical payments for car insurance?
Even though health insurance usually covers injuries you suffer in a car accident, most plans come with deductibles and copayments.
If you live in a state where PIP or MedPay is optional, adding one of these coverages to your car insurance can spare you from these types of out-of-pocket expenses.
More frequently asked questions
Liability car insurance in some form is mandatory in almost every state, and several states have additional requirements. For example, 22 states and the District of Columbia also require uninsured motorist coverage. Personal injury protection or medical payments coverage is also required in 17 states.
Minimum coverage is car insurance that meets your state’s minimum requirements. Although a minimum-coverage policy allows you to drive legally in your state, it may not provide all the insurance protection you need.
Although $500 deductibles are common for collision and comprehensive car insurance, you can lower your rate by choosing higher amounts. Since your deductible comes out of your pocket, it should reflect the most you’d be able to afford for car repairs after an accident.
No. Collision car insurance isn’t required by law, though lenders typically require it for a car loan. It’s usually also required for a leased vehicle.
No. You typically won’t need collision insurance on an old car with a low resale value, because you won’t get very much from the insurance company if it’s damaged or destroyed. However, if your old car is a collector’s item, consider insuring it with a specialty policy for classic and antique cars.