If you’re wondering how much car insurance you need, the short answer is that you need the minimum amount of car insurance required by your state to drive legally. Insurance is required in every state but New Hampshire, so make sure you understand yourstate’s car insurance minimum requirements.
However, the state minimum is rarely enough coverage to provide protection in the case of an accident or car crash.
We’ll walk you through our guide so you can understand what type of car insurance you should get. You can also use the tool to see auto insurance coverage recommendations based on what drivers like you have purchased.
HOW MUCH CAR INSURANCE DO I NEED?
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Bodily injury liability maximum for one person injured in an accident.
Bodily injury liability maximum for all injuries in one accident.
Property damage liability maximum for one accident.
Collision: Pays for damage to your car caused by an impact with another vehicle or object, or during a rollover.
Comprehensive: Pays for damage caused by hazards other than collision, such as fire, theft, explosion, windstorm, hail, water or impact with an animal.
CarInsurance.com used quotes provided to users from Jan. 1, 2009, to May 31, 2010, to identify the most popular liability limits. Data does not include quotes for Alaska, Hawaii or Massachusetts.
Percents shown are for top three coverage choices. The remainder of users bought other combinations of liability limits, collision and comprehensive coverage.
You can also use our Car Insurance Estimator tool to determine how much car insurance you need.
How much car insurance do I need?
CarInsurance.com editors recommend the following liability limits of 100/300/100:
- 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.
You should purchase enough car insurance to protect yourself from financial ruin if you have a car accident. Liability insurance protects other drivers in the case of an accident, but the minimum limits typically are so low they won’t provide adequate coverage – they also won’t help cover the cost of repairs to your car.
Still, says Aniruddha Pangarkar, assistant professor of marketing at the Austin E. Cofrin School of Business at the University of Wisconsin-Green Bay, “a cautious and careful driver who is not likely to get into accidents could consider taking lower coverage limits as mandated by their state.”
What are the types of car insurance coverage?
There are six basic types of car insurance coverages: liability, collision, comprehensive, uninsured/underinsured motorist protection, personal injury protection and medical payments coverage.
- Liability: Liability coverage insures you if your car causes injury or damage to another person’s property. Most states require you to have liability coverage to legally drive on the road.
- Collision: Collision coverage pays for damages to your car caused by collision, whether or not the accident was your fault.
- Comprehensive: Comprehensive insurance covers damages caused to your car due to factors other than collision, such as weather, fire or theft.
- Uninsured motorist coverage (UM/UIM): Uninsured/underinsured motorist coverage pays for damage to your vehicle in case the other party does not have enough insurance or no insurance after an accident.
- Personal injury protection (PIP): PIP is coverage that pays your medical bills and covers lost wages and other expenses for you or your passengers regardless of who is at fault in an accident.
- Medical payments coverage (MedPay): MedPay or medical payments coverage is similar to personal injury protection. It covers your medical expenses related to injuries resulting from an accident, regardless of who was at fault.
How much liability insurance do I need?
Minimum liability coverage 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.
As mentioned above, CarInsurance.com recommends liability limits of 100/300/100.
But there are other coverage limits. 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 and the second is the per-accident limit.
- The third number is the property damage liability limit, which covers damage to property.
50/100/50 coverage limits
This level of coverage is recommended for those who have an older car, few assets, don’t drive often or are on a tight budget, such as college students or retirees.
100/300/100 auto insurance limits
For middle-income earners with a typical level of savings, this level is adequate in most circumstances. The cost of liability insurance, once you have bought the basic levels, does increase, but not exponentially, according to 2022 data:
- The average annual rate for state minimum liability-only coverage is $511.
- The average annual rate for liability coverage with limits of 50/100/50 is $637.
- The average annual rate for full coverage with limits of 100/300/100 and a $500 deductible is $1,682.
To see what the average driver pays for liability coverage in each state, and how much more you would pay to boost your coverage, refer to the table below.
|State||State Minimum Liability Only||50/100/50 Liability Only||$ increase||% increase|
250/500/100 coverage limits
If you own an expensive home or have a high net worth, consider supplementing this 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.
Do I need full coverage insurance?
Full coverage comprises comprehensive and collision: 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 have an accident, regardless of fault.
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.
Do I need 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 coverage if your state allows it. It is a good idea to keep uninsured motorist coverages if you can afford to as it minimizes financial losses from deductibles and coverage caps.
Furthermore, getting into a crash with an uninsured motorist could spell disaster – in 2019, 12.6 percent of motorists, or about one in eight drivers, were uninsured, according to a 2021 study by the Insurance Research Council.
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.
Do I need medical payments or personal injury protection coverage?
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. If you don’t have health insurance, these coverages are recommended.
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.
What are some other types of car insurance?
Auto insurance companies also offer a variety of optional coverages. Some may be more useful than others, so it’s important to review your policy and determine which apply to you:
- Gap insurance: If your car is a total loss due to an accident, this coverage option will cover the difference between what you owe on your loan or lease and the actual cash value of the vehicle.
- Roadside assistance coverage: This coverage may be a good choice for people who drive frequently. It covers any service calls and towing expenses if your car breaks down, but it does not pay for vehicle repairs.
- Rental car reimbursement coverage: Pays for a rental car after a covered claim. Adding this endorsement could come in handy if your car is not drivable due to a covered incident.
- Non-owner car insurance: Non-owner car insurance is a form of liability coverage that provides protection for people who don’t own a vehicle but still need to drive someone else’s on occasion. It pays out if you cause injury or property damage in a mishap with another person.
- Mechanical breakdown insurance: If your car runs into trouble for reasons that are not related to an accident, mechanical breakdown insurance (MBI) is there to cover the costs of getting it fixed.
- Rideshare insurance: Personal coverage typically doesn’t apply if you drive for a ridesharing company like Uber or Lyft.
How can I save money on car insurance?
There are a number of ways to save on car insurance. One of the best is to shop around. But it’s important to understand that your driving history and other factors affect your premium.
“Individuals with a poor credit score are regarded as risky investments, which can increase your premium,” Dr. Pangarkar says. “There are other factors that impact your insurance premium, such as the ZIP code where you live; the year, make and model of your car; how many miles you drive annually … your age; etc.”
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.
The insurance industry is highly competitive and many companies want to acquire new customers from rivals, Dr. Pangarkar says.
Here are some other ways you can save money on your car insurance payments:
- 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: Safe driving, getting good grades, bundling with homeowners policy and installing safety features are a few ways you can get discounts on your car insurance policy.
- Maintain a clean driving record and a good credit score.
- Buy a vehicle that has a good safety record.
- Raise your insurance deductible.
Another way to save money on your car insurance is by signing up for a telematics program to monitor your driving habits.
Pangarkar recommends calling your insurance company and asking for discounts and says that low-mileage auto insurance companies are a good fit and highly beneficial for those consumers who drive less (typically lower than 7,500 miles in a given year).
“Keep in mind that typically, car insurance companies offer two kinds of discounts for low-mileage consumers. The first is where consumers that drive below a certain threshold qualify (typically 7,500 miles as mentioned earlier,)” Pangarkar says.
“In this first case, companies like Geico and State Farm offer highly competitive rates that can help drivers get substantial discounts. For the second type of discount, which is calculated based on a pay-per-mile rate, many insurance companies like Nationwide, Allstate and Liberty Mutual offer discounts in this category. Many companies use apps to track driving history. Nationwide is a company that is reputed to offer good discounts in the pay-per-mile category.”
Resources & Methodology
Insurance Information Institute. “Facts + Statistics: Uninsured motorists.” Accessed July 2022.
CarInsurance.com commissioned Quadrant Information Services to report average auto insurance rates for nearly every ZIP code in the United States. The rate includes uninsured motorist coverage.
Note: Liberty Mutual, one of the biggest auto insurers in the U.S., is not included in the list of insurers offering cheap car insurance because of a lack of public rate information from the company.
Your rate depends on your personal factors and vehicle.
– Michelle Megna contributed to this story.
- Don't Just Assume Your Broker/Insurer Knows Everything. ...
- Don't Just Assume Your Broker/Insurer Knows Everything. ...
- Disclosure All Material Circumstances and Facts & Keep Insurers Updated. ...
- Check Compliance With Policy Terms, Conditions & Endorsements. ...
- Check Your Basis Of Cover. ...
- Be Aware Of Average.
- Choose a cheaper car to insure. We get it, everyone loves a noteworthy motor. ...
- Reduce annual mileage. ...
- Pay in one go. ...
- Increase your excess. ...
- Think carefully about modifications. ...
- Park your car off the road. ...
- Improve your car's security. ...
- If you're a low mileage driver, consider pay-as-you-go insurance.
It is recommended that you have at least $1,000,000 of liability coverage for injuries and property damage during an accident. This auto insurance policy is essential to protect your vehicle and the contents inside in case of any damage when you are not at fault.What are 3 important tips on filing an auto insurance claim? ›
- Call your insurance professional as soon as possible — even from the scene of the accident—regardless of who is at fault. ...
- Use a mobile app to jumpstart your claim. ...
- Find out what documents are needed to support your claim.
Not only could comprehensive insurance be cheaper than paying for third party cover, but if you get into an accident, your insurance company may pay for the damages to your vehicle. You may receive compensation when the fault can't be proven too.What are 3 ways you can lower the cost of your auto insurance? ›
- Increase your deductible.
- Check for discounts you qualify for.
- Compare auto insurance quotes.
- Maintain a good driving record.
- Participate in a safe driving program.
- Take a defensive driving course.
- Explore payment options.
- Improve your credit score.
- Your car insurance may not be tied to the driver.
- The type of car you drive matters.
- Prior claims and questions raise rates.
- You can check your report for errors.
- Your credit score impacts your car insurance costs.
- Where you live impacts your premium account.
Can you negotiate car insurance rates? In short, no. Insurance pricing factors are myriad, with car insurance companies factoring in a driver's history of infractions and collisions, their credit score, age, gender, location, the type of vehicle insured.Is 1 million liability enough for car insurance? ›
For the reasons above, we recommend that you purchase at least $2 million in third-party liability coverage for your automobile insurance policy. The relatively minimal extra expense will give you valuable security in the event the worst should happen, and you are found at-fault in a motor vehicle accident.How much insurance cover is enough? ›
The life insurance coverage amount should be enough to support your family financially after you, while its premium fits well into your regular expenses. It is recommended to have life cover of at least ten times the annual income.
The best liability coverage for most drivers is 100/300/100, which is $100,000 per person, $300,000 per accident in bodily injury liability and $100,000 per accident in property damage liability. You want to have full protection if you cause a significant amount of damage in an at-fault accident.Does car age affect insurance? ›
Does a car's age affect car insurance? Yes, a car's value declines as it ages, meaning your insurance company won't need to pay as much after an accident. Because of this, insurance rates can decline, which helps many drivers with older vehicles save money.What is the least amount of car insurance coverage? ›
Here are the minimum liability insurance requirements (per California Insurance Code §11580.1b): $15,000 for injury/death to one person. $30,000 for injury/death to more than one person. $5,000 for damage to property.Does shopping for car insurance hurt your credit? ›
It is true that insurance companies check your credit score when giving you a quote. However, what they're doing is called a 'soft pull' — a type of inquiry that won't affect your credit score. You'll be able to see these inquiries on your personal credit reports, but that's it.What should you not say when making an insurance claim? ›
- It was my fault. This may be common knowledge for many, but it's worth reiterating that you should never admit fault. ...
- I think. ...
- I'm fine. ...
- Names. ...
- Recorded statements. ...
- Unnecessary details. ...
- We don't have an attorney. ...
- Yes, I accept your offer.
- Record and report your accident and injuries. ...
- Seek professional medical attention as soon as you notice an injury. ...
- Cooperate fully with requests and queries from your solicitor. ...
- Don't suffer in silence. ...
- List losses, expenses and costs.
- You were driving while intoxicated or driving under the influence at the time of the accident.
- The insurer believes the accident was avoidable.
- You were driving without a valid license.
- You were driving without valid auto insurance.
Which is a better Car Insurance? Taking a comprehensive car insurance cover is always advisable as it provides complete protection of not only someone else's car like a Third-Party car insurance, but also the Own damages to your car, as well as any injury to the owner driver.Which insurance cover is best for car? ›
This is the highest level of insurance you can have. It covers you, your car and any others involved in an accident. It includes all the cover of a third party fire and theft policy, but also protects you as a driver and might pay out for damage to your car.
Classic car insurance is often cheaper than standard policies, mostly because insurers see classic cars as a lower risk of being involved in a claim. Many classic car insurers recognise that older vehicles have lower speed limits and classic car owners tend to keep their car well looked after.
7 things you should know about auto and car insurance
Why Is Car Insurance Important? | Do You Need Car Insurance
What Is Car Insurance and How Does It Work?
- Decide how long you need coverage. ...
- Calculate how much life insurance you need. ...
- Think about other objectives. ...
- Name a beneficiary. ...
- Talk with a trusted advisor. ...
- 10 tips for choosing a life insurance beneficiary.
What Are Medicare Wages and Tips on a W-2? The Medicare wages and tips section on a W-2 form states the amount of your earnings that are subject to Medicare tax withholding. The number included in this box will usually be identical to the “wages, tips, other compensation” section on the W-2 form.How do you sell health insurance tips? ›
- Automate processes. ...
- Use technology. ...
- Explore market. ...
- Be confident about the product. ...
- Develop need-payoff. ...
- Listen to the customers. ...
- Build a personal connection. ...
- Do not be a robot!
Is there a best time of day to buy car insurance? According to data and research from Confused.com, the cheapest time to buy car insurance is between the hours of 6 am and 9 am.What should you not do before a life insurance test? ›
- Avoid alcohol and nicotine. Both can increase your blood pressure. ...
- Avoid red meat. Red meat is a high-cholesterol food.
- Avoid over-the-counter medications such as antihistamines and nasal decongestants. ...
- Get a good night's sleep.
- Smoking and tobacco use.
- Use of marijuana or recreational drugs.
- Any medical diagnosis you have received.
- Any use of prescription medications.
- Previous or current treatments you're receiving or expected to receive.
The five things not covered by life insurance are preexisting conditions, accidents that occur while under the influence of drugs or alcohol, suicide, criminal activity, and death due to a high-risk activity, such as skydiving, and war or acts of terrorism.What do millionaires pay for Medicare? ›
At the highest tier — MAGI of $500,000 or more for singles and $750,000 or more for joint filers — the monthly premium for Part B jumps to $460.50. On top of that, you'll pay a $77.40 monthly surcharge for Medicare's prescription drug coverage.What income does Medicare look at? ›
You can get Medicare coverage no matter your income. Keep in mind that: Once you hit certain income levels, you'll need to pay higher premium costs. If your income is more than $91,000, you'll receive an IRMAA and pay additional costs for Part B and Part D coverage.
All cash and non-cash tips an received by an employee are income and are subject to Federal income taxes. All cash tips received by an employee in any calendar month are subject to social security and Medicare taxes and must be reported to the employer.Can you become a millionaire from selling insurance? ›
Is It Possible To Become A Millionaire Selling Insurance? A big yes. But like any other job, it takes time to be good at what you do and attain such income levels. Top agents earn anywhere between $100,000 to one million dollars.Do people who sell insurance make a lot of money? ›
Actually, hard-working insurance agents regularly earn over $100,000 in their first year. Life insurance agents enjoy a lucrative career, but it does involve a constant hustle, networking, and sales in evenings and on weekends and general hard work. And there can be a lot of rejection before each sale.How do you convince an insurance customer? ›
- Educate Consumers. Never underestimate or overestimate how much or how little prospects know about your products. ...
- Tell Relatable Stories. ...
- Discuss Costs in a Positive Light.
The only downside is that it is generally the most expensive time to buy a car insurance policy. “Our data shows that February and August are typically the cheapest months to buy car insurance.When should you shop around for new car insurance? ›
It's recommended that you shop around for car insurance quotes at least once a year. However, to make sure you're getting the absolute best rates, consider shopping for new quotes every six months — the length of a standard policy. An easy way to remember when to shop is to watch for the end of your current policy.Should you change car insurance every year? ›
How often should you change car insurance? It's generally recommended that drivers consider changing their car insurance providers at least once per year. That way, motorists can make sure they're getting competitive rates for coverage.