Start with your state’s minimum — then go higher
Almost every state requires liability insurance, which pays for injuries and damage you cause to others. Each state sets its own minimum limits, and you can see yours on our state pages. Those minimums are a legal floor, not a recommendation: a serious accident can easily cost more than the minimum covers, and you could be responsible for the rest.
Liability limits: protect what you own
Liability limits are written as three numbers, such as 100/300/100 — $100,000 per person for injuries, $300,000 per accident for injuries, and $100,000 for property damage. A common rule of thumb is to carry enough liability coverage to protect your savings, home equity and future income. Raising limits usually costs less than people expect, because the first dollars of coverage are the most expensive part of the policy.
If you have significant assets, an umbrella policy adds extra liability coverage on top of your auto and home policies.
Collision and comprehensive: protect your car
- Collision pays to repair or replace your car after a crash, no matter who caused it.
- Comprehensive covers theft, vandalism, fire, hail, flooding, falling objects and hitting an animal.
Together these are often called “full coverage.” If you lease or finance your car, your lender will almost always require both. If your car is paid off and worth relatively little, dropping them can make sense — compare the yearly cost against what the car is worth and what you could afford to replace it with.
Other coverage worth considering
- Uninsured/underinsured motorist — pays for your injuries when the other driver has no insurance or too little. Required in some states.
- Medical payments or personal injury protection (PIP) — pays medical bills for you and your passengers. PIP is required in no-fault states.
- Rental reimbursement and roadside assistance — inexpensive add-ons that help when your car is in the shop or breaks down.
- Gap insurance — covers the difference between what you owe and what the car is worth if it’s totaled, useful on new financed cars.
Choosing a deductible
Your deductible is what you pay toward a collision or comprehensive claim. A higher deductible lowers your premium, so choose the highest amount you could comfortably pay on short notice.
Frequently asked questions
Is the state minimum enough?
It keeps you legal, but it often isn’t enough to cover a serious accident. If damages exceed your limits, you can be personally responsible for the difference.
What does “full coverage” mean?
It isn’t an official coverage, but it usually means liability plus collision and comprehensive, so both other people’s losses and your own car are covered.
Do I need collision on an older car?
Not always. If the car is worth little and you could replace it yourself, collision may cost more over time than it would pay out.
This guide is general information, not insurance or legal advice. Coverage and requirements vary by insurer and state.