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How Much Car Insurance Do I Need?

Most states recommend the amount of car insurance you need in the form of minimum liability coverage. It is the bare minimum coverage you’re required to have for your car insurance. But when an accident happens for real, you’re more than likely to find out that this bare minimum isn’t enough to cover the cost of damages.

You’ll turn out to be an underinsured driver who needs to pay for the cost of an accident out of pocket. The driver you hit could take a lawsuit against you to get compensation and you’ll be thrown into an unexpected financial debt. The way out of this is to get more car insurance coverage than your state demands. But, just how much car insurance do I need?

The car insurance you need depends on certain factors such as the worth of your car, your residential location, and the value of assets you need to protect. I’ll share with you the recommended amounts of coverage you can buy for different types of car insurance. 

You’ll also know the factors that affect the rates of car insurance and how much car insurance is required in every state.

The last thing you want is to run out of car insurance coverage when you have outstanding debts to pay. Paying out of pocket for accidents you cause is more expensive than letting your insurance company cover the costs for you. 

Related: How Does Car Insurance Work?

What type of car insurance is a requirement in almost all states?

Almost every state is required to have liability insurance. With the exception of Virginia and New Hampshire, liability coverage is the type of car insurance that’s mandatory for all states because it covers the bodily injury and property damage costs you’ll incur when you hit another driver. 

In 12 states, Personal Injury Protection coverage is required to cater for the medical expenses of you and your car passengers in the event of an auto crash. Over 20 states made uninsured motorist coverage mandatory so drivers can have insurance for their medical costs and property damages when hit by an uninsured or a hit-and-run driver.

If you’re located in certain states, only liability insurance is necessary. Other states, especially no-fault states, might require you to have both liability and Personal Injury Protection coverage. And some others will need you to also add uninsured motorist coverage to the list. You just need to check with your insurance agent for the current state laws on car insurance where you reside.

How much car insurance is required in my state?

Every state has a minimum coverage requirement that drivers should carry on their liability insurance. The average minimum coverage required for liability insurance in almost every state is represented as 25/50/25.

The first 25 represents $25,000 and is the amount given for bodily injuries per person in an accident, usually the amount you give to the driver you hit.

The second 50 represents $50,000 and it’s the bodily injury amount allocated per accident to more than one person, usually the driver, car passengers, and any accident victim you crashed into.

The last 25 is for property damage and it stands for $25,000. It’s the amount given to repair the property of the other driver you hit, such as their cars or fences.

Let’s go over the different car insurance requirements given by each state.

StatesMinimum car insurance coverageBodily injury per personBodily injury per accidentProperty damagesOther car insurance requirements
California15/30/5$15,000$30,000$5,000None
Alabama25/50/25$25,000$50,000$25,000None
Connecticut25/50/25$25,000$50,000$25,000Uninsured and underinsured motorist coverage
Arizona25/50/15$25,000$50,000$15,000None
Hawaii20/40/10$20,000$40,000$10,000Personal Injury Protection
Indiana25/50/25$25,000$50,000$25,000None
Florida10/20/10$10,000$20,000$10,000Personal Injury Protection
Illinois25/50/20$25,000$50,000$20,000Uninsured motorist bodily injury
Colorado25/50/15$25,000$50,000$15,000None
Arkansas25/50/25$25,000$50,000$25,000None
Kentucky25/50/25$25,000$50,000$25,000Personal Injury Protection
Iowa25/40/15$25,000$40,000$15,000None
Maine50/100/25$50,000$100,000$25,000MedPay coverage and Uninsured/Underinsured motorist coverage
Kansas25/50/25$25,000$50,000$25,000Personal injury Protection and Uninsured/Underinsured motorist coverage
Idaho25/50/15$25,000$50,000$15,000None
Delaware25/50/10$25,000$50,000$10,000Personal Injury Protection
Georgia25/50/25$25,000$50,000$25,000None
Maryland30/60/15$30,000$60,000$15,000MedPay coverage and Uninsured/Underinsured motorist coverage
Louisania15/30/25$15,000$30,000$25,000None
Mississippi30/60/10$30,000$60,000$10,000None
Michigan50/100/10$50,000$100,000$10,000Personal Injury Protection
Missouri25/50/25$25,000$50,000$25,000Uninsured motorist bodily injury
Massachusetts20/40/5$20,000$40,000$5,000Personal Injury Protection and uninsured motorist bodily injury
Montana25/50/20$25,000$50,000$20,000None
Nevada25/50/20$25,000$50,000$20,000None
New Jersey25/50/25$25,000$50,000$25,000Personal Injury Protection and uninsured/underinsured motorist coverage
Nebraska25/50/25$25,000$50,000$25,000Uninsured/underinsured motorist coverage
Minnesota30/60/10$30,000$60,000$10,000Personal Injury Protection and uninsured/underinsured motorist coverage
North Dakota25/50/25$25,000$50,000$25,000Personal Injury Protection and uninsured/underinsured motorist coverage
New York25/50/10$25,000$50,000$10,000Personal Injury Protection and uninsured/underinsured motorist coverage
Ohio25/50/25$25,000$50,000$25,000None
North Carolina30/60/25$30,000$60,000$25,000Uninsured motorist coverage
New Mexico25/50/10$25,000$50,000$10,000None
South Carolina25/50/25$25,000$50,000$25,000Uninsured motorist coverage
Oklahoma25/50/25$25,000$50,000$25,000None
Rhode Island25/50/25$25,000$50,000$25,000None
South Dakota25/50/25$25,000$50,000$25,000Uninsured/underinsured motorist coverage
Oregon25/50/20$25,000$50,000$20,000Personal Injury Protection and uninsured motorist coverage
Tennessee25/50/25$25,000$50,000$25,000None
Pennsylvania15/30/5$15,000$30,000$5,000None
Vermont25/50/10$25,000$50,000$10,000Uninsured/underinsured motorist coverage
Texas30/60/25$30,000$60,000$25,000None
Washington25/50/10$25,000$50,000$10,000None
Utah25/65/15$25,000$65,000$15,000Personal injury protection
Washington DC25/50/25$25,000$50,000$25,000Uninsured motorist coverage
Wyoming25/50/20$25,000$50,000$20,000None
Washington25/50/10$25,000$50,000$10,000None
Wisconsin25/50/10$25,000$50,000$10,000Uninsured motorist bodily injury
West Virginia25/50/25$25,000$50,000$25,000Uninsured motorist coverage

How much car insurance do I need?

You need car insurance coverage that’s way more than the minimum state requirements as seen in the table above. An average state minimum insurance of 25/50/25 won’t suffice most times because $25,000 for the bodily injuries of a driver you hit would prove inadequate to cover the ever-increasing hospital bills.

The recommended car insurance coverage you need is 100/300/100. This is one of the highest liability coverages that can conveniently cover your losses in an accident. The first 100 is per person and provides $100,000 to take care of the bodily injury the driver you crashed into, such as surgeries, drug prescriptions, diagnosis, and other medical costs you’ll incur. 

300 is per accident, and it allocates $300,000 to take care of the bodily injuries of all persons involved in the car accident you caused, and the last 100 is for property damages, allocating $100,000 to cover all damages in cars and properties to the other driver.

If this amount of coverage seems too much, then you can opt for a 50/100/50 liability insurance coverage. It’ll also help to offset many expenses that you need to pay out of pocket when an auto accident arises.

Also Read: How to Get Car Insurance in 9 Easy Steps

How much coverage do I need for different types of insurance?

Liability insurance isn’t the only car insurance available, though it is the most common because it’s mandatory in almost all states. Liability insurance itself is divided into bodily injury and property damage liability coverage. You can select different coverage amounts for each of them.

Aside from liability insurance, there’s also comprehensive and collision insurance, Personal Injury Protection and Medical Payments coverage, as well as uninsured and underinsured motorist coverage. These are the most popular car insurance policies available. And we’re going to explore how much insurance you need for each of them.

Bodily injury liability 

Bodily injury liability is a type of liability insurance that caters to the medical treatments of the other driver and passengers for a car accident you caused. The Consumers Checkbook recommends that you get a liability coverage of 100/300/50, and the first 100 signifying $100,000 is for bodily injury. So, the recommended bodily injury liability coverage you should get is $100,000.

However, you can also opt for a lower coverage because most states have a minimum bodily injury liability of $25,000.

Property damage liability

Property damage liability pays for the destruction of properties, such as cars or fences, in any accident you’re responsible for. Property damage doesn’t have to be as expensive as bodily injury liability.

The recommended amount of car insurance you need for property damages is $50,000. However, you can sign up for a lower coverage of $20,000. Some states even require you to have property damage liability for as low as $10,000.

Collision insurance

Collision insurance covers the cost of repairs to your car whenever you crash headlong or collide with another driver. It’s not required in most states, but if you’re financing or leasing your car, then your lender or dealer would require you to have it.

After liability insurance, the next insurance you’re most likely to need in the event of an accident is collision insurance because most accidents involve hitting and getting hit. 

The recommended coverage to carry for collision insurance is based on the worth of your car.

It usually comes with a deductible that ranges from $250 to $1,000. Collision insurance is only advisable if your car is new and expensive. If it starts getting old and depreciated, it’s better to drop it as you’ll end up paying more in premiums than the actual value of the car.

Comprehensive insurance

Comprehensive insurance covers accidental damage to your car that doesn’t involve collision, such as fire, theft, vandalism, and natural disasters like tornados.

Though it’s not mandatory, it will be required of you if you take out a car loan or lease. Of course, after paying off the car loan or lease, you can always choose to drop it. 

Comprehensive and collision insurance are always bundled together. And just like collision insurance, the amount of comprehensive insurance you can buy is based on the value of your car.

If you cannot afford to pay for repairs that come from non-collision events like storms or fires out of pocket, then you can add comprehensive insurance to your auto policy.

Personal Injury Protection(PIP) coverage and Medical Payments (MedPay)

MedPay and PIP coverage compensate you for your medical costs and that of your passengers in the event of an accident. 

PIP coverage takes it a little further by reimbursing you with lost wages as a result of the accident, pain and suffering damages, funeral expenses, and housekeeping costs accrued because you’re unable to perform house chores due to the accident.

You’ll need PIP coverage that’s a little more than the state minimum requirements in no-fault states. A PIP coverage from $20,000 to $50,000 is okay and can go a long way in resolving your hospital bills during accidents.

Uninsured and underinsured motorist coverage

Uninsured motorist coverage covers your bodily injuries and property damages when hit by a driver with no car insurance whatsoever. 

While underinsured motorist coverage takes care of your hospital bills and property repairs when a driver with insufficient car insurance crashes into you.

You would think that there should be no driver moving around without car insurance because of state laws but around 12.6 drivers comfortably cruise without having car insurance.

The recommended uninsured and underinsured motorist coverage to buy should be the same as your liability insurance. If your liability insurance is 50/100/20, then your uninsured and underinsured motorist coverage should also be 50/100/20.

Should I get a full coverage policy?

Full coverage policy offers all-around protection against the impact of an accident on your finances. Liability insurance, for example, only caters to the bodily injuries and property damages of the other driver when you’re responsible for an accident, not yours.

Collision and comprehensive coverage only repair your car in an accident, not the other driver’s car or hospital bills when you’re at fault.

You can see that some coverage takes care of the welfare of the other driver, and some other policies compensate you. What if you had one car insurance policy that takes care of both you and the other driver?

That’s where full coverage policy comes in. Full coverage combines liability insurance with both collision and comprehensive insurance so that you’re fully covered from all sides in the event of an accident.

You’re not limited to these three policies, as you can always add more coverage options if you need to feel safer. But, should you really get a full coverage policy?

If you leased or financed your car, then yes. A full coverage policy is a smart choice to make, because your dealer or lender will require you to have collision and comprehensive coverage anyway, and the state will need you to sign up for liability insurance.

But if you own your car, then you can decide to drop it because it adds more cost to your policies. Or you can keep it if you need thorough protection in times of auto mishaps.

Is $100 a month too much for car insurance?

Car insurance of $100 isn’t too much as the average monthly car insurance premiums stand around $140. So, it’s a good deal, as you’re getting auto insurance coverage below the average rate at an affordable cost.

Related: How to Get Lower Car Insurance Rates

Bryan Grey
Bryan Grey
Bryan is a car insurance writer that shares insightful auto insurance advice to help car owners make the best of different car insurance policies available to them.
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