Navigating the world of car insurance can feel overwhelming. From understanding state minimums to deciphering different coverage types, it’s crucial to know exactly What Car Insurance Do I Need to protect yourself and your finances. This guide will break down the essentials, ensuring you make informed decisions about your auto insurance coverage.
Every state mandates a minimum level of car insurance to comply with financial responsibility laws. Liability coverage is almost universally required, designed to cover damages and injuries you inflict on others in a car accident.
Common minimum liability limits often hover around $25,000 per person for bodily injury, $50,000 per accident for bodily injury, and $25,000 for property damage. However, these state-specific requirements can vary significantly. To accurately determine the amount of car insurance you need, it’s vital to first understand your state’s specific legal obligations and then evaluate your personal risk profile.
Determining Your Car Insurance Needs
Beyond simply meeting state minimum requirements or satisfying lender demands if you have a car loan or lease, the core question becomes: how much car insurance is truly adequate? The answer lies in assessing your ability to financially withstand potential accidents. Could you comfortably afford to pay out-of-pocket for injuries, property damage, and potential lawsuits arising from an accident? Even if you have savings, are you prepared to deplete them due to a car accident? For most individuals, the answer is a resounding no.
The National Association of Insurance Commissioners offers sound advice on determining adequate car insurance coverage, recommending that you secure enough insurance to:
- Meet state legal requirements: Ensure you are legally compliant with your state’s minimum coverage laws.
- Satisfy lender requirements: If you have a car loan or lease, your lender will likely have specific coverage demands.
- Protect your assets: Shield your personal assets from potential lawsuits resulting from a car accident where you are at fault.
Understanding Essential Car Insurance Coverages
While most states mandate liability car insurance, the specific coverage requirements differ. Depending on your location, you might be legally obligated to purchase additional coverage types, such as uninsured motorist coverage, personal injury protection (PIP), or medical payments coverage. Furthermore, lenders typically require collision and comprehensive coverage if your vehicle is financed or leased to safeguard their investment.
Pro Tip: It’s a smart practice to review your car insurance policy annually. This ensures your chosen coverage options and limits continue to align with your evolving needs and financial situation.
Here’s a breakdown of common car insurance coverage options and recommended coverage levels. Remember, these are general guidelines, and a thorough evaluation of your personal financial circumstances is crucial to determine the most appropriate coverage for you.
| Coverage | Adequate | Good | Even Better |
|---|---|---|---|
| Liability Car Insurance | State minimum | $100,000 per person for bodily injury liability $300,000 per accident for bodily injury liability $100,000 for property damage |
$250,000 per person for bodily injury liability $500,000 per accident for bodily injury liability $250,000 for property damage |
| Uninsured/Underinsured Motorist | State minimum | $100,000 per person for bodily injury liability $300,000 per accident for bodily injury liability |
$250,000 per person for bodily injury liability $500,000 per accident for bodily injury liability |
| Personal Injury Protection (PIP) | State minimum | $40,000 | State maximum |
| Collision Coverage | Not required | Recommended | Recommended |
| Comprehensive Coverage | Not required | Recommended | Recommended |
State-by-State Car Insurance Requirements
Every state has implemented financial responsibility laws for vehicle owners. The most common way to fulfill these laws is by purchasing car insurance.
While the minimum amount of auto insurance mandated varies from state to state, liability car insurance – which covers damages and injuries you cause to others in an accident – remains the fundamental required coverage across the board. Understanding your state’s minimum car insurance requirements is essential, but it’s crucial to recognize that these minimums may not adequately meet your individual needs for financial protection.
| State | Bodily Injury Liability (Per Person/Per Accident) | Property Damage Liability (Per Accident) | Other Car Insurance Requirements |
|---|---|---|---|
| Alabama | $25,000 / $50,000 | $25,000 | None |
| Alaska | $50,000 / $100,000 | $25,000 | None |
| Arizona | $25,000 / $50,000 | $15,000 | None |
| Arkansas | $25,000 / $50,000 | $25,000 | None |
| California | $30,000 / $60,000 | $15,000 | None |
| Colorado | $25,000 / $50,000 | $15,000 | None |
| Connecticut | $25,000 / $50,000 | $25,000 | Uninsured/underinsured motorist bodily injury: $25,000 per person / $50,000 per accident |
| Delaware | $25,000 / $50,000 | $10,000 | Personal injury protection: $15,000 per person / $30,000 per accident |
| Florida | $10,000 / $20,000 | $10,000 | Personal injury protection: $10,000 |
| Georgia | $25,000 / $50,000 | $25,000 | None |
| Hawaii | $20,000 / $40,000 | $10,000 | Personal injury protection: $10,000 |
| Idaho | $25,000 / $50,000 | $15,000 | None |
| Illinois | $25,000 / $50,000 | $20,000 | Uninsured motorist bodily injury: $25,000 per person / $50,000 per accident |
| Indiana | $25,000 / $50,000 | $25,000 | None |
| Iowa | $20,000 / $40,000 | $15,000 | None |
| Kansas | $25,000 / $50,000 | $25,000 | Personal injury protection: $4,500 Uninsured/underinsured motorist bodily injury: $25,000 / $50,000 |
| Kentucky | $25,000 / $50,000 | $25,000 | Personal injury protection: $10,000 |
| Louisiana | $15,000 / $30,000 | $25,000 | None |
| Maine | $50,000 / $100,000 | $25,000 | Medical payments: $2,000 Uninsured/underinsured motorist bodily injury: $50,000 / $100,000 |
| Maryland | $30,000 / $60,000 | $15,000 | Personal injury protection: $2,500 Uninsured/underinsured motorist bodily injury: $30,000 / $60,000 Uninsured motorist property damage: $15,000 |
| Massachusetts | $20,000 / $40,000 | $5,000 | Personal injury protection: $8,000 Uninsured motorist bodily injury: $20,000 / $40,000 |
| Michigan | $50,000 / $100,000 | $10,000 | Personal injury protection: $250,000 Property protection insurance (PPI): $1 million |
| Minnesota | $30,000 / $60,000 | $10,000 | Personal injury protection: $40,000 Uninsured/underinsured motorist bodily injury: $25,000 / $50,000 |
| Mississippi | $25,000 / $50,000 | $25,000 | None |
| Missouri | $25,000 / $50,000 | $25,000 | Uninsured motorist bodily injury: $25,000 per person / $50,000 per accident |
| Montana | $25,000 / $50,000 | $20,000 | None |
| Nebraska | $25,000 / $50,000 | $25,000 | Uninsured/underinsured motorist bodily injury: $25,000 per person / $50,000 per accident |
| Nevada | $25,000 / $50,000 | $20,000 | None |
| New Hampshire | $25,000 / $50,000 | $25,000 | Medical payments: $1,000 Uninsured/underinsured motorist bodily injury: $25,000 / $50,000 |
| New Jersey | $25,000 / $50,000 | $25,000 | Personal injury protection: $15,000 Uninsured/underinsured motorist bodily injury: $25,000 / $50,000 Uninsured motorist property damage: $25,000 |
| New Mexico | $25,000 / $50,000 | $10,000 | None |
| New York | $25,000 / $50,000 | $10,000 | Personal injury protection: $50,000 Uninsured/underinsured motorist bodily injury: $25,000 / $50,000 |
| North Carolina* | $30,000 / $60,000 | $25,000 | Uninsured motorist bodily injury: $30,000 per person / $60,000 per accident Uninsured motorist property damage: $25,000 |
| North Dakota | $25,000 / $50,000 | $25,000 | Personal injury protection: $30,000 Uninsured/underinsured motorist bodily injury: $25,000 / $50,000 |
| Ohio | $25,000 / $50,000 | $25,000 | None |
| Oklahoma | $25,000 / $50,000 | $25,000 | None |
| Oregon | $25,000 / $50,000 | $20,000 | Personal injury protection: $15,000 Uninsured motorist bodily injury: $25,000 / $50,000 |
| Pennsylvania | $15,000 / $30,000 | $5,000 | Medical benefits: $5,000 |
| Rhode Island | $25,000 / $50,000 | $25,000 | None |
| South Carolina | $25,000 / $50,000 | $25,000 | Uninsured motorist bodily injury: $25,000 per person / $50,000 per accident Uninsured motorist property damage: $25,000 |
| South Dakota | $25,000 / $50,000 | $25,000 | Uninsured/underinsured motorist bodily injury: $25,000 per person / $50,000 per accident |
| Tennessee | $25,000 / $50,000 | $25,000 | None |
| Texas | $30,000 / $60,000 | $25,000 | None |
| Utah | $30,000 / $65,000 | $25,000 | Personal injury protection: $3,000 |
| Vermont | $25,000 / $50,000 | $10,000 | Uninsured/underinsured bodily injury: $50,000 per person / $100,000 per accident Uninsured motorist property damage: $10,000 |
| Virginia | $50,000 / $100,000 | $25,000 | Uninsured/underinsured motorist bodily injury: $50,000 per person / $100,000 per accident Uninsured motorist property damage: $25,000 |
| Washington | $25,000 / $50,000 | $10,000 | None |
| Washington, D.C. | $25,000 / $50,000 | $10,000 | Uninsured motorist bodily injury: $25,000 per person / $50,000 per accident Uninsured motorist property damage: $5,000 |
| West Virginia | $25,000 / $50,000 | $25,000 | Uninsured motorist bodily injury: $25,000 per person / $50,000 per accident Uninsured motorist property damage: $25,000 |
| Wisconsin | $25,000 / $50,000 | $10,000 | Uninsured motorist bodily injury: $25,000 per person / $50,000 per accident |
| Wyoming | $25,000 / $50,000 | $20,000 | None |
*North Carolina’s limits are set to increase to 50/100/50 on July 1, 2025. Insurance requirements are based on information from each state’s department of motor vehicles, current as of March 2025.
States Where Car Insurance is Not Strictly Required
While mandatory car insurance is the standard across the US, two states offer unique alternatives:
- New Hampshire: While New Hampshire doesn’t mandate car insurance, if you are at fault in an accident, you must demonstrate sufficient financial resources to meet the state’s financial responsibility law. This could necessitate purchasing car insurance retroactively.
- South Carolina: South Carolina law allows drivers to legally operate a vehicle without auto insurance if they meet specific criteria and pay a $600 uninsured vehicle registration fee.
However, choosing to forgo car insurance in New Hampshire or South Carolina exposes you to significant personal financial liability for property damage or injuries caused to others in an accident you cause.
Estimating Car Insurance Costs: Expert Tips
To get a clearer picture of what car insurance do I need and how much it will cost, consider these expert tips:
Compare Quotes from Multiple Companies
Michelle Megna, Insurance Lead Editor, Penny Gusner, Insurance Senior Writer, and Jason Metz, Insurance Lead Editor, all recommend comparing quotes.
It’s essential to compare car insurance quotes from various insurers to gain a reliable estimate of costs tailored to your specific needs. Ensure you are comparing the same coverage options and limits across different quotes for an accurate “apples-to-apples” comparison, enabling you to identify the most cost-effective policy.
Provide Accurate Information for Quotes
Penny Gusner, Insurance Senior Writer, emphasizes accurate information.
Factors such as your age, vehicle type, desired coverage amounts, deductibles, driving history, and location all influence your car insurance cost estimate. Providing accurate information when requesting quotes is crucial. Inaccurate details can lead to policy cancellation or rate recalculations at a higher premium after you purchase coverage.
Utilize a Car Insurance Calculator
Jason Metz, Insurance Lead Editor, recommends using a car insurance calculator.
If you need a quick estimate without the commitment of filling out multiple quote forms, a car insurance calculator can be a valuable tool. These calculators provide cost estimations based on your state and driving record, helping you establish realistic budgeting expectations for your car insurance.
Is Minimum Car Insurance Enough?
While meeting the minimum car insurance requirements is better than driving uninsured, it often falls short of providing adequate financial protection for many drivers. Minimum coverage limits are typically quite low, leaving you exposed to significant financial risk if you cause an accident that exceeds those limits. Furthermore, state minimum car insurance policies do not cover repairs to your own vehicle after an accident. For more comprehensive protection, opting for coverage beyond the minimum is strongly recommended.
A basic understanding of the main types of car insurance empowers you to build a policy tailored to your specific insurance needs and risk tolerance.
Types of Auto Insurance Coverage Explained
Liability Insurance: Protecting Others
Liability car insurance is designed to cover bodily injury and property damage to others if you are found at fault in a car accident. This coverage also extends to your legal defense costs and any settlements or judgments if you are sued as a result of an accident.
Liability insurance is comprised of two key components:
- Bodily Injury Liability: Covers medical expenses and other costs associated with injuries to other drivers, their passengers, and pedestrians if you are at fault in an accident.
- Property Damage Liability: Covers the costs of repairing or replacing property belonging to others, including their vehicles, if you cause an accident.
Examples of situations covered by liability insurance include:
- Rear-ending another vehicle at a stoplight, causing damage.
- Colliding with and damaging a neighbor’s fence.
- Causing a car accident where the other driver sustains injuries.
How much liability insurance is recommended?
A practical guideline is to purchase enough liability insurance to cover potential losses from a lawsuit against you if you cause a car accident. For instance, in California, a 250/500/100 liability policy offers significantly better protection compared to the state minimum of 30/60/15.
For enhanced liability protection beyond your standard auto and homeowners insurance, consider an umbrella insurance policy. Umbrella policies provide substantial additional liability coverage, often starting at $1 million, for a relatively affordable premium.
Uninsured Motorist Insurance: Protection Against the Uninsured
Uninsured motorist (UM) and underinsured motorist (UIM) insurance provide crucial coverage for your medical expenses if you are involved in an accident caused by a driver who either lacks liability insurance or has insufficient coverage to fully compensate your losses. Uninsured motorist coverage is mandatory in some states and optional in others. In states where it’s optional, you typically have the choice to decline the coverage in writing.
If UM coverage is available in your state, it is highly recommended. UM coverage can help pay for:
- Funeral expenses.
- Lost income due to accident-related injuries.
- Medical expenses for you and your passengers.
- Pain and suffering experienced by you or your passengers.
- Vehicle damage (depending on your state and if you’ve purchased uninsured motorist property damage coverage).
It is important to note that uninsured motorist insurance does not provide any benefits to the uninsured driver who caused the accident; they remain responsible for their own damages and liabilities.
Recommended Uninsured Motorist Coverage Levels
Typically, it’s advisable to purchase UM coverage in amounts that mirror your liability insurance limits. For example, if you carry liability coverage of 250/500/100, aiming for the same limits for UM coverage is a prudent approach.
Collision and Comprehensive Insurance: Protecting Your Vehicle
Collision insurance covers the costs to repair or replace your vehicle if it’s damaged in a collision with another car or object, such as a tree, fence, or guardrail. Comprehensive insurance protects your car from a broader range of perils, including theft, vandalism, fire, floods, hail, falling objects, and collisions with animals.
Collision and comprehensive coverage are often bundled together and offered as optional coverages. They are highly recommended if you want insurance protection for damage to or theft of your own vehicle. Furthermore, if you have a car loan or lease, your lender or leasing company will almost certainly require you to carry both collision and comprehensive coverage to protect their financial interest in the vehicle.
Determining Collision and Comprehensive Coverage Amounts
You don’t select specific coverage amounts for collision and comprehensive insurance in the same way as liability coverage. Instead, the maximum payout is capped at the actual cash value of your vehicle if it’s declared a total loss. To manage premiums, you can adjust your deductible – the out-of-pocket amount you pay towards a claim. Opting for a higher deductible, such as $1,000, will typically result in lower premiums compared to a lower deductible like $500.
Personal Injury Protection (PIP): Medical Coverage Regardless of Fault
Personal injury protection (PIP) provides medical coverage for you and your passengers, irrespective of who was at fault in a car accident. PIP coverage can also extend to other expenses like lost wages, funeral costs, and essential replacement services you cannot perform due to accident-related injuries, such as cleaning services or childcare.
Some states mandate PIP coverage as part of their “no-fault” auto insurance systems. In other states, PIP may be offered as optional coverage, and some states do not offer it at all.
Recommended PIP Coverage Levels
PIP coverage rules and availability vary significantly by state. For example, in Florida car insurance, PIP options range from basic to extended:
- Basic Florida PIP: Covers 80% of medical bills and 60% of lost wages and replacement services.
- Extended Florida PIP: Covers 100% of medical bills and 80% of lost wages and replacement services.
If PIP is optional in your state, you may consider declining it if you have robust health insurance. However, PIP offers advantages that health insurance may not, such as reimbursement for lost wages and essential services.
Medical Payments Coverage (MedPay): Another Option for Medical Bills
Medical payments coverage, often called “MedPay,” is similar to PIP in that it covers medical expenses for you and your passengers, regardless of fault in a car accident. However, unlike PIP, MedPay typically does not cover pain and suffering or reimburse for replacement services.
Recommended MedPay Coverage Levels
In states where MedPay is available, it is usually offered in relatively small coverage amounts, often ranging from $1,000 to $5,000.
Additional Optional Car Insurance Coverages
While liability insurance, uninsured motorist coverage, medical payments options, and collision and comprehensive coverage provide a solid foundation for your car insurance policy, you might consider these additional optional coverages to address specific needs:
| Coverage Type | Description
