Deciding how much car insurance to buy depends factors such as your budget and desire for good insurance coverage. Each state sets a minimum car insurance amount drivers must buy, and you may want to purchase additional insurance to cover your own car and provide better coverage in case you cause an accident.

Recommended auto insurance coverage

Liability: Liability car insurance covers the medical expenses and property damage for others if you cause an accident. It is often written as three numbers that correlate with:

  • Bodily injury per person
  • Bodily injury per accident
  • Property damage per accident

Example: If you purchase 25/50/10 in liability car insurance, you have $25,000 in bodily injury per person, $50,000 in bodily injury per accident, and $10,000 for property damage. 


How much car insurance is right for you?

Car insurance coverage amount Who is it good for?
Your state's minimum required insurance
  • Drivers on a tight budget
Liability limits of 100/300/100
  • Drivers who want good coverage, and those with middle-income earnings and adequate savings
Liability limits of 250/500/250
  • Drivers who want very good coverage and those with high earnings and a lot of assets
Collision and comprehensive coverage
  • Drivers with a car loan or lease
  • Those who live in areas with high rates of car theft, vandalism or severe weather
  • Drivers who want insurance to pay for damage to their own car if they cause an accident

Collision insurance: After an accident with another car, collision insurance pays for the repair or replacement of your vehicle. You are likely required to have collision insurance if you have a car loan or lease.

Comprehensive insurance: This covers car theft and the repair or replacement of your car if the damage is caused by weather, fire, flood, natural disasters, explosion, vandalism, crashes with animals or falling objects. This is recommended insurance if you live in an area where bad weather such as hail or tornadoes are common. You are likely required to have comprehensive insurance if you have a car loan or lease.

Personal injury protection (PIP): Covers the medical expenses of you and your passengers no matter who caused the accident.

Uninsured motorist coverage (UM): Pays for your medical bills if you are hit by someone who was driving without insurance or without enough insurance. In some states uninsured motorist insurance is also available for car damage, a type known as uninsured motorist property-damage coverage.

Which car insurance types are not necessary?

The best car insurance is not necessarily the most coverage possible. Certain kinds of coverage are redundant with others. Here are examples. 

Uninsured motorist coverage, PIP and MedPay

  • Redundant to: Your health insurance
  • Things to consider: All these coverage types pay for medical bills that may be covered by health insurance. However, you may want to consider UM, PIP or MedPay if you have a health plan with high deductibles and coinsurance. Also, UM, PIP and MedPay can pay for pain and suffering and other expenses that your health plan does not. Some states require UM and/or PIP.

More: State minimum car insurance coverage map

Uninsured motorist property damage (UMPD) coverage

  • Redundant to: Collision coverage
  • Things to consider: Both types pay for damage to your car. UMPD pays out only if an uninsured or underinsured driver crashes into you. The advantage to UMPD is that it might have a lower deductible than collision coverage.

Your car insurance needs

In general, purchase what you can afford. One of the worst things to do is allow a policy to lapse because you can't afford to keep up with the payments. If you can't afford a lot of car insurance coverage, buy the coverage levels you can now and increase limits later when your budget allows.

Driving without car insurance can lead to fines and license suspension.