There is no single right amount of car insurance. The right policy depends on your state's rules, the car you drive, and how much you would have to pay out of pocket after a serious accident. Here is a simple way to think it through.
1. Start with your state's minimum
Almost every state requires drivers to carry liability insurance, and each state sets its own minimum amounts. Some states also require personal injury protection (PIP) or uninsured motorist coverage. Your state minimum is the least you can legally carry — it is a floor, not a recommendation.
2. Understand your liability limits
Liability limits are usually written as three numbers in thousands of dollars. With limits of 50/100/50, your policy pays up to:
- $50,000 for injuries to each person,
- $100,000 total for injuries in one accident, and
- $50,000 for damage to other people's property.
If an accident costs more than your limits, you could be responsible for the difference. That is why many drivers choose limits above the state minimum, especially if they own a home or have savings to protect.
3. Decide on collision and comprehensive
Liability does not pay to fix your own car. Collision covers damage from a crash, and comprehensive covers things like theft, vandalism, hail, fire and hitting an animal. Together with liability they are often called "full coverage." They are worth considering if:
- your car is financed or leased (lenders usually require them),
- your car is newer or would be hard to replace, or
- you could not easily pay for major repairs yourself.
4. Think about uninsured motorists
Uninsured and underinsured motorist coverage helps pay for your injuries if you are hit by a driver without enough insurance. Some states require it; in others it is optional.
5. Questions to ask your agent
- What does my state require?
- How would higher limits change my quote?
- What deductible makes sense for me?
- Am I eligible for any discounts?
A licensed agent can walk you through each of these in a few minutes and show you options side by side.
This guide is for general information only and is not insurance or legal advice. Coverage, requirements and availability vary by state and insurer.