How much car insurance do you need?

Are the state minimums enough, or do you need more?

Logan Sachon

Logan Sachon

Published May 29, 2018

Buying car insurance can be as simple as buying the minimum required amount determined by law in your state. If you’re a risk taker and not a law breaker, that could be enough. But if you want to be covered for all potential damages from a car accident, you need to buy more than the minimum.

A licensed representative at Policygenius can help you review your current coverage and recommend the right amount of coverage for you.

Read more:

What types of car insurance can you buy?

Car insurance is made up a few different types of insurance types, some which are optional, and some which are not:

Liability insurance

Also called third-party car insurance. Protects you if you hurt someone else or damage their property with your car by paying bills, legal, and settlement costs, up to your policy limits. There are two types:

  • Bodily injury liability (BIL) — Also called bodily injury coverage. Protects you if you hurt someone else with your car.
  • Property damage liability (PDL) — Also called property damage coverage. Covers you if damage someone else’s property with your car.

Personal injury protection (PIP)

Covers medical bills that you or your passengers incur in a car accident, whether your fault or someone else’s fault. Also called no-fault insurance.

Uninsured motorist/underinsured motorist insurance (UM/UIM)

Covers you if you get hit by an uninsured or underinsured driver. Pays medical bills, lost wages, and more.

Collision insurance

Provides insurance coverage to pay for damages to your car if you get in an accident, no matter who was at fault.

Comprehensive insurance

Covers damages to your car that wasn’t caused by another car or collision. Examples include like theft, vandalism, and weather damage.

Read more about how car insurance works.


Home & Auto Insurance Comparison Made Easy

People save 20% on average by bundling homeowners & auto insurance.

How much car insurance do you need by law?

All but two states require you have to have a certain amount of car insurance across a number of different categories. It’s the law.

The exceptions: New Hampshire requires you to pay up to certain limits out of pocket if you go uninsured or else face penalties; Virginia requires an annual payment to the state if you forego insurance.

All other states require at least two types of bodily injury liability (BIL) and property damage liability (PDL). Some states also require personal injury protection (PIP) and some require uninsured/underinsured motorist (UM/UIM) coverage.

Find out your state’s required minimum car insurance coverage.

How much car insurance do you actually need?

You probably need more insurance than your state requires, because state minimums don’t provide enough coverage for most people to ensure they are protected in case of an accident.

Let’s look at New York as an example. In New York, you need to carry a "25/50/10 liability" policy, meaning $25,000 bodily injury limit per individual, $50,000 total bodily injury limit per accident, and $10,000 property damage limit. If you get into a truly terrible accident and the driver in the other car requires more than $25,000 worth of medical care, you’ll be on the hook for the difference. And if you can’t pay for it in cash? Your assets can be seized and wages docked to pay the costs. If you truly have no assets, the minimum coverage required may be enough. But if you own a home or have savings, both could be taken to pay your debt.

Liability insurance

Many people recommend buying as much liability coverage as you can afford, and to definitely buy enough liability insurance to cover the full value of your assets (your house, your car, savings, investments, etc.).

If you have teen drivers on your policy, you should increase your liability coverage limits even more.

Personal injury protection (PIP)

When it comes to personal injury protection, you probably don’t need to buy more than the legally required minimum, if it’s required at all. As long as you have health insurance and some form of disability insurance — and know that frequent passengers in your car do, too — you’ll probably be able to cover any medical expenses or lost wages from being unable to work.

Uninsured motorist/underinsured motorist insurance

Some states require uninsured motorist/underinsured motorist insurance, but even if yours doesn’t, you should consider it mandatory. If you get involved in an accident where the other person is either underinsured (likely if they just bought the minimum required amount) or uninsured (it happens), this insurance will cover your costs. Uninsured motorist coverage is a relatively cheap addition to your car insurance policy that can be incredibly useful.

Collision coverage and comprehensive coverage

Many car insurance companies combine collision and comprehensive coverage, though some allow you to choose one or the other.

If you have a vehicle that is less 10 years old or if you don’t have enough cash on hand to repair or replace your car in case of an accident, you should get both comprehensive and collision.

People who live in areas prone to wildfires and floods may especially want to opt in to comprehensive, as this kind of insurance would pay out if your car was destroyed by a natural disaster.

If you lease or finance your car, your leasing agency or bank may require that you have both collision and comprehensive coverage.

Another reason to choose collision and comprehensive insurance: if you plan on using your car insurance to insure you when you when driving rental cars, you’ll need both — in addition to liability insurance — to be fully covered.

Read more about rental car insurance.

Gap insurance

If you’re financing your car, you may also want to look into gap insurance. Gap insurance will help cover the cost of paying off an auto loan in the event that the car is totaled in an accident (some lenders will require you purchase this insurance).

Read more about gap insurance.

Policygenius can help you decide the right coverage amounts and the right car insurance company for you. Get started now.

Read More


Best Car Insurance Companies for You

Find the right carrier for your situation, no matter what.

Learn More

How Much Is Car Insurance?

It's more affordable than you think, if you know where to shop.

Learn More

How to Compare Auto Insurance Quotes

Find the best rates for your car and budget.

Learn More

Policygenius’ editorial content is not written by an insurance agent. It’s intended for informational purposes and should not be considered legal or financial advice. Consult a professional to learn what financial products are right for you.