Plain Policy Guide
Coverage Basics

How Much Car Insurance Do You Need?

State minimums are a legal floor, not a recommendation. Here is how to choose liability limits, whether you need collision and comprehensive, and which extras are worth it.

By Plain Policy Guide Editorial Team Published 3 min read

"How much car insurance do I need?" has two answers. The legal answer is your state's minimum. The financial answer is enough to protect what you would lose if you caused a serious crash. This guide helps you find the second number.

How liability limits work

Liability limits are written as three numbers separated by slashes. Take California's minimum of 30/60/15:

  • $30,000: the most the policy pays for injuries to one person,
  • $60,000: the most it pays for all injuries in one accident,
  • $15,000: the most it pays for property damage in one accident.

Anything above those amounts is not the insurer's problem. It is yours. The NAIC's consumer guide warns that you are responsible for damage and injuries you cause above your limits and urges drivers to think carefully before buying only the minimum.

State minimums are a floor, not a target

Minimums vary a lot from state to state. A few examples from official sources:

StateMinimum liabilityNotes
California$30,000 / $60,000 / $15,000Bodily injury per person / per accident / property damage
Nevada$25,000 / $50,000 / $20,000Same structure
Florida$10,000 property damage + $10,000 PIPNo bodily injury liability required for most drivers; PIP still required as of the 2026 session

Compare those numbers with what a serious crash can cost: a new car, an ambulance ride, a hospital stay, lost wages and possibly a lawsuit. A minimum-limits policy can run out quickly.

How to choose your liability limits

A simple, practical rule: your liability limits should be at least as high as what someone could take from you in a lawsuit. That includes savings, investments outside retirement accounts, home equity and, in many cases, future wages.

  1. Add up what you have to protect. Savings, home equity and other assets.
  2. Get quotes at several limit levels, for example the state minimum, 50/100/50, 100/300/100 and 250/500/100. Raising limits often costs less than people expect, because the first dollars of coverage are the most expensive.
  3. Pick the highest level that fits your budget and covers your assets. If your assets are well above the highest auto limits available, ask about an umbrella policy.
Renters and new drivers

Even if you have few assets today, a court judgment can follow you for years and reach future wages. Limits above the minimum are usually worth the extra cost if you can afford them.

Do you need collision and comprehensive?

These coverages protect your own car. You almost certainly need them if:

  • you have a loan or lease (the lender will require them),
  • your car is new or still worth a significant amount, or
  • you couldn't afford to repair or replace the car from savings.

For an older, paid-off car, liability-only may be enough. Our guide to full coverage vs. liability walks through the math, and choosing a deductible can lower the cost if you keep them.

Uninsured and underinsured motorist coverage

Your liability coverage doesn't pay for your own injuries when another driver is at fault. If that driver has no insurance, or too little, you are left with the bills unless you carry uninsured and underinsured motorist coverage. The Insurance Research Council estimates that 15.4% of drivers were uninsured in 2023, and the rate tops 20% in several states. A common approach is to match your UM/UIM limits to your own liability limits. Read what uninsured motorist coverage pays for.

Medical payments or PIP

If you live in a no-fault state, PIP is required. Elsewhere, medical payments coverage is optional and pays medical bills for you and your passengers regardless of fault. It can be useful if you have a high health insurance deductible or often drive passengers.

Extras: which ones are worth it

  • Rental reimbursement: worth it if you rely on your car daily and couldn't easily pay for a rental during repairs.
  • Roadside assistance: skip it if you already have it through an auto club, a credit card or your car's warranty.
  • GAP insurance: worth considering if you owe more on your loan than the car is worth.

A sample setup

For a driver with some savings and a financed car, a reasonable starting point might be: liability of 100/300/100, UM/UIM matching those limits, collision and comprehensive with a deductible you could pay tomorrow, and rental reimbursement if you depend on the car. Then compare quotes with identical coverages and look for legitimate ways to lower the price.

Next guideHow Car Insurance Deductibles Work (and How to Choose One)

Frequently asked questions

Is the state minimum enough car insurance?

It keeps you legal, but it is rarely enough to protect you. A serious crash can easily cost more than minimum limits, and you can be personally responsible for the difference. Most drivers with savings or a home should carry higher limits.

What does 100/300/100 mean?

It means $100,000 of bodily injury coverage per person, $300,000 of bodily injury coverage per accident and $100,000 of property damage coverage per accident.

Do I need an umbrella policy?

If your assets or income are well above your auto liability limits, an umbrella policy adds extra liability coverage on top of your auto and home policies. It is usually sold in million-dollar increments and requires you to carry certain underlying limits first.

How much coverage do I need with an SR-22?

The SR-22 certifies that you meet at least your state's minimum liability limits. Florida's FR-44 requires more: 100/300/50. You can always buy higher limits than the filing requires.

Sources

  1. A Consumer's Guide to Auto Insurance, NAIC
  2. What Does Auto Insurance Cover? (June 11, 2026), NAIC
  3. California Driver Handbook, Section 10: Financial Responsibility, Insurance Requirements, and Collisions, California DMV
  4. Nevada Liability Insurance Requirements, Nevada DMV
  5. Facts + Statistics: Uninsured motorists, Insurance Information Institute (citing the Insurance Research Council)
  6. Did you hear that Florida's 55-year-old no-fault auto insurance statute has been repealed? (May 5, 2026), Insurance Journal

Sources were checked on October 14, 2026. Laws, fees and prices change; always confirm with your state agency or insurer.

Keep reading

Coverage Basics Types of Car Insurance Coverage, Explained Liability, collision, comprehensive, uninsured motorist, PIP and more: what each type of car insurance coverage pays for, which ones are required and which are optional. 4 min read Coverage Basics Full Coverage vs. Liability Insurance: What's the Difference? Liability-only insurance covers damage you cause to others. Full coverage adds collision and comprehensive for your own car. Here is what each costs and how to decide. 3 min read Coverage Basics How Car Insurance Deductibles Work (and How to Choose One) Your deductible is what you pay before insurance pays on a collision or comprehensive claim. Here is how it works, how it affects your premium and how to pick the right amount. 2 min read Coverage Basics Uninsured Motorist Coverage: What It Pays For and Do You Need It? About one in seven U.S. drivers is uninsured. Uninsured and underinsured motorist coverage pays your bills when they hit you. Here is how it works and the states where it matters most. 2 min read Coverage Basics What Is GAP Insurance and Do You Need It? GAP insurance covers the difference between what you owe on your car loan and what your insurer pays if the car is totaled or stolen. Here is when it is worth it and when to skip it. 3 min read Coverage Basics How to Lower Your Car Insurance: 12 Ways That Actually Work Practical, legitimate ways to cut your car insurance bill: comparing quotes the right way, deductibles, discounts, credit, coverage choices and more, with tips from insurance regulators. 4 min read