How Much Car Insurance Do I Need?

When it comes to how much car insurance you need, there isn’t a one-size-fits-all answer. Where you live will determine the minimum amount of coverage you need. But there are many personal factors to consider that’ll help you figure out how much coverage is enough.

In this article, I’ll share some of money expert Clark Howard’s considerations to help figure out how much car insurance you need, along with:

• Minimum Car Insurance Requirements by State
• Calculating How Much Car Insurance You Need
  • No Assets
  • Assets Valued at Less Than $1M
  • Assets Valued at More Than $1M

Minimum Car Insurance Requirements by State

According to the Insurance Information Institute (III), “You cannot legally drive in any state without demonstrating financial responsibility for damages or liability in the event of an accident.”

Every state financial responsibility laws, which require you to prove that — if you cause an accident — you can afford to cover the costs of any associated damages. One way to do this is to have car insurance. That’s why most states require drivers to maintain a specific minimum amount of coverage.

If you only have the minimum coverage required in your state, you have what’s called state minimum coverage. That said, only having the state minimums can be risky for many people. Clark talked about this recently on an episode of The Clark Howard Podcast.

“Years ago, I told you a story about a very successful surgeon who ended up bankrupt because he bought state minimums on insurance,” he said. “His teenage daughter had an accident that caused severe injuries to someone in another vehicle, her fault. And it bankrupted the family. So, make sure you have adequate coverages.”

You can check out your state’s minimum requirements below or click here to jump ahead to calculating how much insurance you need. Please note that although the state minimums are listed, some states may have ways you can qualify for exemptions to required coverage.

In Michigan — for example — if you have Medicare and Medicaid, you may be able to qualify for lower personal injury protection (PIP) limits. And if you live in Virginia, you can skip car insurance altogether and pay an uninsured motor vehicle fee instead.

State	Minimum Car Insurance Requirements
Alabama	• $25,000 bodily injury liability per person • $50,000 bodily injury liability per accident • $25,000 property damage liability per accident Read more about state requirements for Alabama here.
Alaska	• $50,000 bodily injury liability per person • $100,000 bodily injury liability per accident • $25,000 property damage liability per accident Read more about state requirements for Alaska here.
Arizona	• $25,000 bodily injury liability per person • $50,000 bodily injury liability per accident • $15,000 property damage liability per accident Read more about state requirements for Arizona here.
Arkansas	• $25,000 bodily injury liability per person • $50,000 bodily injury liability per accident • $25,000 property damage liability per accident Read more about state requirements for Arkansas here.
California	• $15,000 bodily injury liability per person • $30,000 bodily injury liability per accident • $5,000 property damage liability per accident Read more about state requirements for California here.
Colorado	• $25,000 bodily injury liability per person • $50,000 bodily injury liability per accident • $15,000 property damage liability per accident Read more about state requirements for Colorado here.
Connecticut	• $25,000 bodily injury liability per person • $50,000 bodily injury liability per accident • $25,000 property damage liability per accident • $25,000 uninsured/underinsured motorist coverage per person • $50,000 uninsured/underinsured motorist coverage per accident Read more about state requirements for Connecticut here.
Delaware	• $25,000 bodily injury liability per person • $50,000 bodily injury liability per accident • $10,000 property damage liability per accident • $15,000 personal injury protection per person • $30,000 personal injury protection per accident Read more about state requirements for Delaware here.
Florida	• $10,000 property damage liability per accident • $10,000 personal injury protection Read more about state requirements for Florida here.
Georgia	• $25,000 bodily injury liability per person • $50,000 bodily injury liability per accident • $25,000 property damage liability per accident Read more about state requirements for Georgia here.
Hawaii	• $20,000 bodily injury liability per person • $40,000 bodily injury liability per accident • $10,000 property damage liability per accident • $10,000 personal injury protection per person Read more about state requirements for Hawaii here.
Idaho	• $25,000 bodily injury liability per person • $50,000 bodily injury liability per accident • $15,000 property damage liability per accident Read more about state requirements for Idaho here.
Illinois	• $25,000 bodily injury liability per person • $50,000 bodily injury liability per accident • $20,000 property damage liability per accident • $25,000 uninsured motorist coverage per person • $50,000 uninsured motorist coverage per accident Read more about state requirements for Illinois here.
Indiana	• $25,000 bodily injury liability per person • $50,000 bodily injury liability per accident • $25,000 property damage liability per accident Read more about state requirements for Indiana here.
Iowa	• $20,000 bodily injury liability per person • $40,000 bodily injury liability per accident • $15,000 property damage liability per accident Read more about state requirements for Iowa here.
Kansas	• $25,000 bodily injury liability per person • $50,000 bodily injury liability per accident • $25,000 property damage liability per accident • $25,000 uninsured/underinsured motorist coverage per person • $50,000 uninsured/underinsured motorist coverage per accident • Personal Injury protection minimums include $4,500/person for medical expenses; $900/month for a year of loss of income/disability; $25/day for in-home services; $2,000 for funeral, burial or cremation; $4,500 for rehab expenses; survivor benefits of up to $900/month for a year covering disability/loss of income Read more about state requirements for Kansas here.
Kentucky	• $25,000 bodily injury liability per person • $50,000 bodily injury liability per accident • $25,000 property damage liability per accident Read more about state requirements for Kentucky here.
Louisiana	• $15,000 bodily injury liability per person • $30,000 bodily injury liability per accident • $25,000 property damage liability per accident Read more about state requirements for Louisiana here.
Maine	• $50,000 bodily injury liability per person • $100,000 bodily injury liability per accident • $25,000 property damage liability per accident • $50,000 uninsured/underinsured motorist coverage per person • $100,000 uninsured/underinsured motorist coverage per accident • $2,000 medical payments coverage Read more about state requirements for Maine here.
Maryland	• $30,000 bodily injury liability per person • $60,000 bodily injury liability per accident • $15,000 property damage liability per accident • $30,000 uninsured/underinsured motorist coverage per person • $60,000 uninsured/underinsured motorist coverage per accident • $15,000 uninsured/underinsured property damage coverage per accident Read more about state requirements for Maryland here.
Massachusetts	• $20,000 bodily injury liability per person • $40,000 bodily injury liability per accident • $5,000 property damage liability per accident • $20,000 uninsured motorist coverage per person • $40,000 uninsured motorist coverage per accident • $8,000 personal injury protection Read more about state requirements for Massachusetts here.
Michigan	• $50,000 bodily injury liability per person • $100,000 bodily injury liability per accident • $10,000 property damage liability per accident • $1 million property protection insurance per accident • $250,000 personal injury protection Read more about state requirements for Michigan here.
Minnesota	• $30,000 bodily injury liability per person • $60,000 bodily injury liability per accident • $10,000 property damage liability per accident • $25,000 uninsured/underinsured motorist coverage per person • $50,000 uninsured/underinsured motorist coverage per accident • $40,000 personal injury protection Read more about state requirements for Minnesota here.
Mississippi	• $25,000 bodily injury liability per person • $50,000 bodily injury liability per accident • $25,000 property damage liability per accident Read more about state requirements for Mississippi here.
Missouri	• $25,000 bodily injury liability per person • $50,000 bodily injury liability per accident • $25,000 property damage liability per accident • $25,000 uninsured motorist coverage per person • $50,000 uninsured motorist coverage per accident Read more about state requirements for Missouri here.
Montana	• $25,000 bodily injury liability per person • $50,000 bodily injury liability per accident • $20,000 property damage liability per accident Read more about state requirements for Montana here.
Nebraska	• $25,000 bodily injury liability per person • $50,000 bodily injury liability per accident • $25,000 property damage liability per accident • $25,000 uninsured/underinsured motorist coverage per person • $50,000 uninsured/underinsured motorist coverage per accident Read more about state requirements for Nebraska here.
Nevada	• $25,000 bodily injury liability per person • $50,000 bodily injury liability per accident • $20,000 property damage liability per accident Read more about state requirements for Nevada here.
New Hampshire	• $25,000 bodily injury liability per person • $50,000 bodily injury liability per accident • $25,000 property damage liability per accident • $25,000 uninsured/underinsured motorist coverage per person • $50,000 uninsured/underinsured motorist coverage per accident • $25,000 uninsured/underinsured motorist property damage coverage • $1,000 medical payments coverage Read more about state requirements for New Hampshire here.
New Jersey	• $5,000 property damage liability per accident • $15,000 personal injury protection Read more about state requirements for New Jersey here.
New Mexico	• $25,000 bodily injury liability per person • $50,000 bodily injury liability per accident • $10,000 property damage liability per accident Read more about state requirements for New Mexico here.
New York	• $25,000 bodily injury liability per person • $50,000 bodily injury liability per accident • $50,000 liability for death per person • $100,000 liability for death per accident • $10,000 property damage liability per accident • $25,000 uninsured motorist bodily injury coverage per person • $50,000 uninsured motorist bodily injury coverage per accident • $50,000 personal injury protection Read more about state requirements for New York here.
North Carolina	• $30,000 bodily injury liability per person • $60,000 bodily injury liability per accident • $25,000 property damage liability per accident • $30,000 uninsured motorist coverage per person • $60,000 uninsured motorist coverage per accident • $25,000 uninsured motorist property damage coverage per accident Read more about state requirements for North Carolina here.
North Dakota	• $25,000 bodily injury liability per person • $50,000 bodily injury liability per accident • $25,000 property damage liability per accident • $25,000 uninsured/underinsured motorist coverage per person • $50,000 uninsured/underinsured motorist coverage per accident • $30,000 personal injury protection Read more about state requirements for North Dakota here.
Ohio	• $25,000 bodily injury liability per person • $50,000 bodily injury liability per accident • $25,000 property damage liability per accident Read more about state requirements for Ohio here.
Oklahoma	• $25,000 bodily injury liability per person • $50,000 bodily injury liability per accident • $25,000 property damage liability per accident Read more about state requirements for Oklahoma here.
Oregon	• $25,000 bodily injury liability per person • $50,000 bodily injury liability per accident • $20,000 property damage liability per accident • $25,000 uninsured motorist coverage per person • $50,000 uninsured motorist coverage per accident • $15,000 personal injury protection Read more about state requirements for Oregon here.
Pennsylvania	• $15,000 bodily injury liability per person • $30,000 bodily injury liability per accident • $5,000 property damage liability per accident • $5,000 medical benefits Read more about state requirements for Pennsylvania here.
Rhode Island	• $25,000 bodily injury liability per person • $50,000 bodily injury liability per accident • $25,000 property damage liability per accident Read more about state requirements for Rhode Island here.
South Carolina	• $25,000 bodily injury liability per person • $50,000 bodily injury liability per accident • $25,000 property damage liability per accident • $25,000 uninsured motorist coverage per person • $50,000 uninsured motorist coverage per accident • $25,000 uninsured motorist property damage coverage Read more about state requirements for South Carolina here.
South Dakota	• $25,000 bodily injury liability per person • $50,000 bodily injury liability per accident • $25,000 property damage liability per accident • $25,000 uninsured/underinsured motorist coverage per person • $50,000 uninsured/underinsured motorist coverage per accident Read more about state requirements for South Dakota here.
Tennessee	• $25,000 bodily injury liability per person • $50,000 bodily injury liability per accident • $25,000 property damage liability per accident Read more about state requirements for Tennessee here.
Texas	• $30,000 bodily injury liability per person • $60,000 bodily injury liability per accident • $25,000 property damage liability per accident Read more about state requirements for Texas here.
Utah	• $25,000 bodily injury liability per person • $65,000 bodily injury liability per accident • $15,000 property damage liability per accident • $3,000 personal injury protection Read more about state requirements for Utah here, including the increased minimum requirements for all policies issued or renewed after January 1, 2025.
Vermont	• $25,000 bodily injury liability per person • $50,000 bodily injury liability per accident • $10,000 property damage liability per accident • $50,000 uninsured/underinsured motorist coverage per person • $100,000 uninsured/underinsured motorist coverage per accident • $10,000 uninsured/underinsured motorist property damage coverage per accident Read more about state requirements for Vermont here.
Virginia	Virginia drivers can choose between paying a $500 uninsured motor vehicle fee or maintaining car insurance. Drivers who choose car insurance must meet these minimums: • $30,000 bodily injury liability per person • $60,000 bodily injury liability per accident • $20,000 property damage liability per accident • $25,000 uninsured/underinsured motorist coverage per person • $50,000 uninsured/underinsured motorist coverage per accident • $20,000 uninsured/underinsured motorist property damage coverage per accident Read more about state requirements for Virginia here, including the increased minimum requirements for all policies issued or renewed after January 1, 2025.
Washington	• $25,000 bodily injury liability per person • $50,000 bodily injury liability per accident • $10,000 property damage liability per accident Read more about state requirements for Washington here.
Washington, D.C.	• $25,000 bodily injury liability per person • $50,000 bodily injury liability per accident • $10,000 property damage liability per accident • $25,000 uninsured motorist coverage per person • $50,000 uninsured motorist coverage per accident • $5,000 uninsured motorist property damage coverage per accident Read more about requirements for Washington, D.C. here.
West Virginia	• $25,000 bodily injury liability per person • $50,000 bodily injury liability per accident • $25,000 property damage liability per accident • $25,000 uninsured motorist coverage per person • $50,000 uninsured motorist coverage per accident • $25,000 uninsured motorist property damage coverage Read more about state requirements for West Virginia here.
Wisconsin	• $25,000 bodily injury liability per person • $50,000 bodily injury liability per accident • $10,000 property damage liability per accident • $25,000 uninsured motorist coverage per person • $50,000 uninsured motorist coverage per accident Read more about state requirements for Wisconsin here.
Wyoming	• $25,000 bodily injury liability per person • $50,000 bodily injury liability per accident • $20,000 property damage liability per accident Read more about state requirements for Wyoming here.

Calculating How Much Car Insurance You Need

State laws will inform you of the least amount of car insurance you need. Maintaining a state minimum policy means you’re likely to have lower premiums. But there’s also a chance that state minimums will leave you underinsured.

If you own any assets, you might not think that you’re putting your assets at risk whenever you’re out on the road. But consider this: if you’re at fault for an auto accident that results in lots of bodily and/or property damage to someone else, all your assets could be on the line if your auto insurance doesn’t offer enough protection. So how much car insurance do you need? The more assets you own, the more car insurance you need.

“One instant — your fault — you know you don’t see somebody in your blind spot, and you cause a wreck….and they end up with an injury that’s a chronic injury. I mean you could be looking at a multi-million dollar claim against you,” Clark warns.

So, to figure out just how much car insurance you need, you’ll need to take stock of everything you own and how much you have in assets that need protection.

“I want people to think — in terms of liability — what do you have that could be in jeopardy? And you need to insure for that,” says Clark.

“Take an inventory: what do you own, what do you have, what investments are there, what money do you have in the bank? And that forms what liability coverage you need to have.”

Let’s look at three different situations to see what type of coverage might be best for your needs:

No Assets

If you don’t have any assets — such as investments, savings or property — a state minimum insurance plan might be acceptable for you. Because if you don’t have any assets, you’re what lawyers would call “judgement proof.” This means you don’t have anything that can be taken away from you in a settlement. So, in the event that you’re at-fault for an accident, you won’t be at risk of losing everything. And having state minimums means you’ll likely have lower premiums on your car insurance.

But remember: if you are at fault for an accident, minimum coverage might not always be enough to cover any resulting medical bills or repair costs. And even though you might not have assets that can be taken, you could still be on the hook for any costs that exceed what your state minimum policy covers. This could leave you in the difficult position of owing money you can’t pay.

Assets Valued at Less Than $1M

Navigating insurance can be tricky. To make things easier — when you’re shopping for new insurance or re-shopping your car insurance — many insurance companies and lead generation sites provide you with options that they call “good/minimum,” “better,” or “best” coverage. Here’s an example from The Zebra:

The minimum coverage above is based on state minimums in Georgia. On an insurance policy, it would look something like this: 25/50/25. The three numbers refer to (1) bodily injury liability per person, (2) bodily injury liability per accident, and (3) property damage liability per accident. You can check out our breakdown on understanding liability insurance here. The better and best options likely take into consideration answers to general questions such as:

• Do you own or rent your home?
• Do you own or lease this vehicle?
• Which bodily injury limits are closest to your current coverage?

But remember: Auto insurance isn’t one-size-fits-all. Just because a company says something is the best doesn’t mean it’s the best for you. The best coverage limits for you are the ones that will protect your assets. And that can be different from person to person and even change over time.

“The more you have, the more liability coverage you want to have,” Clark says. “It’s a continuing scale.”

Once you know the value of your assets, use that number to inform the amount of coverage you choose. Maybe you own your home, but don’t necessarily have a lot of other investable assets. You should still make sure your coverage limits will protect your property in case you injure someone in an accident and they come after everything you’ve got.

“The liability coverage somebody has, I refer to as ‘the success tax.’ The more financially successful you’ve become, the more liability coverage you need to protect what you’ve worked so hard to save and build.”

Assets Valued at More Than $1M

If you’re a homeowner and/or you have investable assets valued at $1 million or more — in addition to your car insurance coverage — you should have umbrella insurance.

Umbrella insurance is a supplemental policy that provides you with liability protection on top of the coverage limits of your auto and/or homeowners insurance policies. This type of policy is typically sold in multiples of $1 million.

How would an umbrella insurance policy work? Let’s say you have a base auto insurance policy that includes $250,000 bodily injury liability per person and $500,000 bodily injury liability per accident. If you’re at fault for a severe accident that leaves multiple people injured, you could quickly reach your auto policy’s coverage limit of paying up to $500,000 for bodily injury liability per accident.

Once you reach that point, your assets could be at risk if the people who are injured need continuous medical care. But if you have an umbrella policy, that additional coverage kicks in once you reach your auto policy’s coverage limit. So, let’s say your insurance has paid up to $500,000 for the accident. Now, your umbrella insurance will take over the additional costs and your assets are protected.

Final Thoughts

There’s no simple answer to the question, “how much car insurance do I need?” That’s because we all have different needs and our needs can change over time. Taking stock of your assets is one way to ensure you’re not underinsured.

The more coverage your car insurance includes, the higher your premiums will be. But protecting your assets is worth the trade-off. And we’ve got lots of tips to save money on car insurance. We’ve also got a guide to help you re-shop your car insurance and make sure you’re getting the best rates for your coverage!