How Much Auto Insurance Should I Have?

Start with liability — it protects everything you own

Liability coverage pays for the injuries and property damage you cause to others in an at-fault crash. If your coverage runs out, you are personally on the hook for the rest — and a plaintiff can pursue your savings, your home equity and even your future wages. That’s why the right liability limit isn’t a random number; it should be at least as large as your net worth. The worksheet above tiers your recommended limits from your assets, because the entire point of liability coverage is to stand between a lawsuit and what you’ve built.

State minimums exist to let you legally drive, not to actually protect you. Limits like 25/50/25 can be exhausted by one hospital stay. Most drivers with any assets should carry at least 100/300/100, and those with significant net worth should move to 250/500/100 and add an umbrella policy on top for $1 million or more of extra liability.

A worked example

Suppose you have $180,000 in assets and $60,000 in debt — a net worth of $120,000. The worksheet puts you in the 100/300/100 tier: enough that a typical serious claim won’t reach your personal assets. Now imagine you cause an accident injuring two people with $250,000 in combined medical bills. With 100/300/100 your insurer pays up to $300,000 per accident, covering it. With the state minimum of 50/100/50, the policy would cap at $100,000 and you could be sued personally for the remaining $150,000. The few extra dollars a month for higher limits is the cheapest lawsuit insurance you can buy.

Then decide on comprehensive and collision

Comprehensive (theft, weather, vandalism, animal strikes) and collision (crashes regardless of fault) cover your car. They’re usually required while you finance or lease, and worthwhile while the car holds real value. But these coverages can only ever pay your car’s actual cash value minus the deductible — so as the car ages, the cost can creep toward the size of the potential payout. The worksheet flags when your car’s value is low enough to reconsider them. If you’d struggle to replace the car out of pocket, keep the coverage; if it’s an old runabout you could replace easily, dropping them can free up real money.

Don’t skip uninsured/underinsured motorist

A large share of drivers are uninsured or carry only minimums. Uninsured/underinsured-motorist coverage (UM/UIM) steps in when the at-fault driver can’t pay for the injuries or damage they caused you. It’s inexpensive relative to the protection, and the worksheet recommends matching it to your liability limits so you’re as well protected as a victim as you are as an at-fault driver.

Put your numbers to work

Once the worksheet gives you target limits, request quotes on those exact numbers from several insurers — raising liability from the minimum to 100/300/100 often costs far less than people expect. Check the broader price picture in our guides to how much car insurance is and what it costs by age and record, and if your net worth is high, size your extra protection with the umbrella insurance calculator. The goal is simple: enough coverage that one bad day can’t undo years of saving.