• JM-Simplified

How much car insurance do I need?

Updated: Feb 1, 2019


There are two different answers to this question. First, you need a certain amount to comply with your state’s law. Second, you need enough to protect your assets.


All states require a minimum amount of car insurance for you to drive legally. Most states have minimum requirements for liability insurance, which pays for the other driver’s injuries (and those of his passengers), as well as vehicle damage to his car.


When determining how much car insurance you need, consider the following factors:


Assets: If you have a high net worth, you might want to increase your coverage limits. If you cause an accident, the other driver can go after you in court to obtain money beyond what your insurance company pays.

Finances: Consider how much you can afford to pay for premiums each month.

Location: If you live in an urban area, you’re statistically more likely to be in an accident and should consider higher coverage. If you park on the street instead of in a garage, you may be more susceptible to theft and should consider comprehensive coverage.

Vehicle type: If you have a new vehicle, it may be worthwhile to get collision coverage to pay for damage to your car in an accident, and comprehensive coverage to pay for damage to your car due to other reasons. Or If you have an old, low-value vehicle, you might not want to pay for these coverage.

Other drivers in your household.


Typically, most insurance experts advise purchasing as much car insurance coverage as you can reasonably afford; however, taking the above into consideration will help you determine the right limits for you.

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