How much insurance coverage do I need?

Drivers who are concerned over car insurance rates and "How much insurance coverage is proper?" should consider how much more costly it could be to drive without proper insurance limits. It's recommended that drivers carry at least 100/300/100 in liability, but when it comes to comprehensive and collision coverage, how much insurance coverage you need will change depending upon what kind of car you drive.

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Chris Tepedino is a feature writer that has written extensively about home, life, and car insurance for numerous websites. He has a college degree in communication from the University of Tennessee and has experience reporting, researching investigative pieces, and crafting detailed, data-driven features. His works have been featured on CB Blog Nation, Flow Words, Healing Law, WIBW Kansas, and C...

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Laura Walker graduated college with a BS in Criminal Justice with a minor in Political Science. She married her husband and began working in the family insurance business in 2005. She became a licensed agent and wrote P&C business focusing on personal lines insurance for 10 years. Laura serviced existing business and wrote new business. She now uses her insurance background to help educate...

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Reviewed by Laura Walker
Former Licensed Agent

UPDATED: Jan 11, 2022

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how much insurance coverage

 

 
 

What to Know

  • Full coverage is made up of three coverage types: liability, comprehensive, and collision coverage
  • Nearly every state requires drivers to at least own liability coverage
  • Shopping online is a great way to find adequate coverage at great pricing

Have you found yourself recently wondering, “ How much car insurance coverage do I need?”

It’s incredibly important to make sure that you are adequately protected whenever you are out for a drive because when the rubber meets the road, anything can happen.

While there are drivers who try to get the cheapest rates possible by gouging their coverage levels, that is not an advisable approach. It is far safer to take a good hard look at how much insurance coverage you need.

You can often determine this by assessing the age of your car, being realistic about how you drive, and calculating how much you could afford to spend if you were ever in an accident.

If you are on the hunt to buy car insurance, “How much insurance coverage should I purchase?” is a question that should be at the forefront of your mind as you browse.

Luckily, with today’s technology, you can peruse auto insurance quotes from your phone or tablet. Shopping online allows you to request multiple quotes at various coverage levels all at once.

This is one of the best ways to find an insurance policy that will not only keep you from hemorrhaging money but will also make sure that you have the protection you need.

Enter your ZIP code to get free quotes from nearby insurance companies if you’ve ever entertained the thought, “How much insurance do I need?”

How much insurance coverage do drivers need to carry?

When examining how much insurance you should carry, there are a few things that you’ll need to consider, like state laws, your budget and your personal risk level just to name a few.

Now, if you’re shopping for affordable car insurance, “How much insurance coverage should I carry?” may not be the first thing you think about, but it still should be high on your list because of how much you’re willing to pay for your own car insurance isn’t the only thing you need to consider.

For instance, let’s say you’re out for a drive and, unfortunately, cause an accident. Any damage that was caused by your negligence should be covered by your insurance; however, if you had low liability limits, then any amount over those limits would be your sole responsibility.

Before you buy the cheapest policy you can find, you also need to ask yourself this: “How much insurance coverage do I need to protect my car?”

Your insurance policy doesn’t exist just to suck your bank account dry. It works to protect you and your vehicle if you have comprehensive and collision coverage.

For example, if your car was parked under the lovely old tree that stands right next to your driveway and a branch from that tree crashes down straight onto your car roof, your full coverage insurance will help you repair your car.

Full coverage can do more for you than just help you repair the damages caused by old trees; that’s because it’s actually three coverage types all rolled into one.

When you purchase full coverage you are actually getting:

  • Liability Coverage
  • Comprehensive Coverage
  • Collision Coverage

These three coverage types all play a different role so let’s take a closer look at what each one provides you with.

Liability Coverage

With liability coverage, your insurance company will repay any medical bills and vehicle repair payments accrued by anyone people that you injured in an accident — up to your coverage limit that is.

It’s also very important to note that if you want to cruise the open road in the United States, then you must have liability coverage. Some states don’t require insurance, but rather some form of “financial responsibility.” You could get a bond or other alternative in some states.

Every state does have they’re own variation of appropriate liability limits too. If you’re unsure what the liability requirements are in your state, you can use this chart to find out what the limit requirements are where you live:

Minimum Car Insurance Requirements by State

StateInsurance RequiredMinimum Liability Limits
ALBI & PD Liab25/50/25
AKBI & PD Liab50/100/25
AZBI & PD Liab15/30/10
ARBI & PD Liab, PIP25/50/25
CABI & PD Liab15/30/5
COBI & PD Liab25/50/15
CTBI & PD Liab, UM, UIM25/50/20
DEBI & PD Liab, PIP25/50/10
DCBI & PD Liab, UM25/50/10
FLPD Liab, PIP10/20/10
GABI & PD Liab25/50/25
HIBI & PD Liab, PIP20/40/10
IDBI & PD Liab25/50/15
ILBI & PD Liab, UM, UIM25/50/20
INBI & PD Liab25/50/25
IABI & PD Liab20/40/15
KSBI & PD Liab, PIP25/50/25
KYBI & PD Liab, PIP, UM, UIM25/50/25
LABI & PD Liab15/30/25
MEBI & PD Liab, UM, UIM, Medpay50/100/25
MDBI & PD Liab, PIP, UM, UIM30/60/15
MABI & PD Liab, PIP20/40/5
MIBI & PD Liab, PIP20/40/10
MNBI & PD Liab, PIP, UM, UIM30/60/10
MSBI & PD Liab25/50/25
MOBI & PD Liab, UM25/50/25
MTBI & PD Liab25/50/20
NEBI & PD Liab, UM, UIM25/50/25
NVBI & PD Liab25/50/20
NHFR only25/50/25
NJBI & PD Liab, PIP, UM, UIM15/30/5
NMBI & PD Liab25/50/10
NYBI & PD Liab, PIP, UM, UIM25/50/10
NCBI & PD Liab, UM, UIM30/60/25
NDBI & PD Liab, PIP, UM, UIM25/50/25
OHBI & PD Liab25/50/25
OKBI & PD Liab25/50/25
ORBI & PD Liab, PIP, UM, UIM25/50/20
PABI & PD Liab, PIP15/30/5
RIBI & PD Liab25/50/25
SCBI & PD Liab, UM, UIM25/50/25
SDBI & PD Liab, UM, UIM25/50/25
TNBI & PD Liab25/50/15
TXBI & PD Liab, PIP30/60/25
UTBI & PD Liab, PIP25/65/15
VTBI & PD Liab, UM, UIM25/50/10
VABI & PD Liab, UM, UIM25/50/20
WABI & PD Liab25/50/10
WVBI & PD Liab, UM, UIM25/50/25
WIBI & PD Liab, UM, Medpay25/50/10
WYBI & PD Liab25/50/20

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Now you should know that the state-set limits are not near enough to provide you with very much protection. It is typically a good rule of thumb to have liability coverage of 100/300/100.

This breaks down into  $100,000 per person, $300,000 per accident in bodily injury liability, and, last but not least, $100,000 per accident in property damage liability.

Medical bills today can grow at horrifying rates so if you don’t think you have enough coverage to protect you from wage garnishment or worse, it’s a good idea to review your liability limits.

Comprehensive Coverage

Unlike liability, comprehensive coverage doesn’t focus on other people at all. Comprehensive coverage is used to protect your vehicle from harm. When you have comprehensive, you can rest easy knowing that your car is covered from storm damage, theft, fire damage, and more.

Comprehensive coverage also differs from liability insurance because it isn’t always required. While drivers who are leasing their vehicle must carry comprehensive coverage, drivers who own their cars don’t need this coverage if they don’t want it.

Older vehicles may not need comprehensive coverage, but if you’ve just driven a brand new car off the lot, you should make sure you have it fully covered.

Collision Coverage

Next on the list is collision coverage which is very important indeed.

This type of coverage enables you to get repairs or even a replacement for your vehicle if you ever hit an object or another person’s vehicle with your car.

Collision coverage isn’t a state requirement; however, if you don’t have the cash flow to easily purchase a replacement vehicle if needed, you should most likely carry collision coverage.

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Do drivers need to buy car insurance?

While there’s nothing quite as thrilling as driving with the wind in your hair, driving without insurance is a chilling experience. It is illegal to drive without insurance and doing so can come with some harsh consequences.

Not only could you have to pay fines upwards of $500, but you could  lose your license and even face some time in jail. While you may save yourself a few bucks, driving without insurance is not worth the risks you face, especially if you cause an accident.

How much does insurance cost?

When asking a car insurance company, “How much insurance coverage do I need?” the company would likely advise you to purchase what you think you need plus a little extra just in case. This is why car insurance can add up to quite a tidy sum.

Drivers typically end up paying about $100 per month for full coverage, but car insurance rates will vary from driver to driver. This variation is due to the many factors that insurance companies use to calculate your rates.

Insurance companies find your rate by examining your:

  • Vehicle’s make and model
  • Vehicle’s age
  • Driving history
  • Claims history
  • Coverage limits
  • Address
  • Deductibles
  • Age
  • Gender
  • Credit score

Drivers who are concerned over car insurance rates and “How much insurance coverage is proper?” should examine this chart that depicts the rates offered by some major insurance companies for both full coverage and liability only.

A quick glance at this can help you estimate what you may be paying every month for insurance:

Average Monthly Full Coverage and Liability-Only Car Insurance Rates

CompanyFull Coverage Car Insurance RatesLiability-Only Car Insurance Rates
Allstate$161$63
American Family$113$52
Farmers$125$47
GEICO$84$38
Liberty Mutual$137$52
Nationwide$95$37
Progressive$98$43
State Farm$100$41
Travelers$109$46
USAA$101$38

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While the upfront cost for full coverage may be higher than just liability, the benefits that come from owning full coverage include great protection and peace of mind so you can enjoy your time out on the road.

Car Insurance: What You Need to Know

When it comes to determining how much insurance you need, a good rule of thumb is to have at least 100/300/100 for your liability insurance. Your comprehensive and collision coverage will change depending upon the vehicle you drive.

Car insurance is a powerful tool that can help you get necessary repairs and even help other drivers with their medical payments if you ever were to cause an accident without you ever having to look at your checkbook.

If you didn’t have insurance, you would be responsible for making all these payments yourself.

If you’re still asking yourself, “How much insurance coverage do I need?” car insurance quotes are just a quick search away.

Enter your ZIP code to get free quotes that can help you answer, “How much insurance coverage is adequate?” once and for all.

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