Determining the right amount of car insurance depends on your state's minimum requirements, your assets, driving habits, and risk tolerance. While legal minimums keep you compliant, experts widely recommend higher limits to protect against real-world costs like medical bills and lawsuits, which often exceed basic coverage.

State Minimums Explained

Every U.S. state mandates at least liability insurance to cover damages you cause to others. The most common baseline is 25/50/25 coverage, meaning:

  • $25,000 bodily injury per person.
  • $50,000 bodily injury per accident.
  • $25,000 property damage per accident.

Requirements vary—New Hampshire and Virginia allow driving without it (with proof of financial responsibility), while states like Michigan demand personal injury protection (PIP) up to $250,000. Check your DMV site for exact figures, as they haven't shifted dramatically by February 2026.

Why Go Beyond Minimums?

Bare-minimum policies leave you exposed. A serious accident could rack up $100,000+ in claims, forcing you to pay out-of-pocket or face lawsuits that tap your savings, home, or wages. Financial advisors push for 100/300/100 or higher:

  • 40% of drivers carry less than 100/300, per recent analyses.
  • With average repair costs over $15,000 and hospital stays hitting $50,000+, skimping risks bankruptcy.

Real example : Imagine rear-ending a new Tesla on a rainy highway—repairs alone could top $30,000, plus whiplash claims. Minimums cover a fraction; fuller limits safeguard your future.

Recommended Coverage Levels

Here's a breakdown of expert-suggested tiers, tailored to net worth and lifestyle:

Your Situation| Liability (BI/PD)| Add-Ons| Why? 19
---|---|---|---
Low assets, young driver| 50/100/50| UM/UIM $50k, $500-1k deductibles| Meets most states; affordable start.
Average household| 100/300/100| UM/UIM $100k, Comp/Coll ($500 ded.)| Covers typical crashes; forum favorite.7
Homeowner, high income| 250/500/250+| UM/UIM $250k+, PIP if required| Shields assets from lawsuits.
Luxury car or teens| 500/500/500+| Full suite + roadside| High repair/med costs demand it.5

UM/UIM = Uninsured/underinsured motorist; Comp/Coll = Comprehensive/collision. Adjust deductibles higher ($1,000+) to cut premiums 10-20% if you have emergency savings.

Key Factors to Personalize

  • Location : Urban areas like Texas recommend 100/300/25 minimum due to congestion.
  • Assets : If your net worth tops $100k, match or exceed it with liability to avoid "umbrella" needs.
  • Vehicle : Leased/financed? Lenders require comp/coll.
  • Lifestyle : Frequent long drives? Boost UM for the 13% uninsured drivers nationwide.

Trending tip : In 2026 forums, drivers lament minimums after viral accident stories—many upgraded post-claim regret. Get quotes from 3+ insurers; bundling home/auto saves 25%.

Steps to Decide Today

  1. Look up your state's rules (e.g., via DMV.gov).
  2. Inventory assets (savings, home equity).
  3. Use online calculators from Progressive or State Farm for personalized quotes.
  4. Add an umbrella policy ($1M+) for $150-300/year if wealthy—covers liability gaps.
  5. Reassess yearly, especially after life changes like buying a home.

TL;DR Bottom Line

Aim for 100/300/100 liability minimum—it's the sweet spot balancing cost and protection for most. Minimums are a legal floor, not financial armor; upgrade to sleep easy.

Information gathered from public forums or data available on the internet and portrayed here.