How Much Car Insurance Do I Need? Limits Explained

Your state's legal minimum is a floor, and it often falls short of protecting your savings, home or future paycheck if you cause a serious crash. A common rule of thumb is liability limits of at least 100/300/100 if you have savings or own a home, and 250/500/250 plus an umbrella policy if you have more to protect. Comprehensive and collision make sense when your car is financed or leased, or when replacing it out of pocket would be hard.

What does 100/300/100 mean?

Liability limits are written as three numbers, in thousands of dollars. With 100/300/100, the policy pays up to $100,000 for injuries to any one person, up to $300,000 for all injuries in one accident, and up to $100,000 for property damage, such as the other car, a fence or a storefront.

Say you cause a crash that injures four people. Each of them can collect up to $100,000 from your policy, but all four together can collect no more than $300,000. Anything above those caps is your responsibility.

Liability pays other people. It does not fix your car or pay your own medical bills; that is the job of collision, comprehensive, MedPay, PIP and uninsured motorist coverage. Some policies use one combined single limit instead of three numbers, which pays all injuries and damage from one crash up to a single total.

Is state minimum coverage enough?

For most people with something to protect, no. The most common legal minimum is $25,000 per person and $50,000 per accident for injuries, and property damage minimums run from $5,000 to $50,000 depending on the state. A few states go lower: Iowa requires 20/40/15, Louisiana 15/30/25 and Pennsylvania 15/30/5, and Florida does not require bodily injury liability for most drivers at all.

Now compare those limits with what claims cost. According to ISO figures published by the Insurance Information Institute (2024 data), the average paid bodily injury liability claim was $28,278 in 2024, up from $17,014 in 2015. That average, which also counts the insurer's claim-handling costs, is higher than the $25,000 per-person minimum in many states. A crash with a hospital stay or a lasting injury can cost far more than an average claim.

Property damage limits get used up too. The average property damage liability claim was $6,770 in 2024, but one crash involving a newer car or several vehicles can go past a $10,000 or $15,000 limit.

If a claim goes over your limits, the injured person can sue you for the rest. Depending on your state's laws, a court judgment can reach your savings, your home equity and your future wages.

Several states have raised their minimums recently. California moved from 15/30/5 to 30/60/15 in 2025, Virginia went to 50/100/25 in 2025, North Carolina went to 50/100/50 for policies issued or renewed on or after July 1, 2025, and the standard policy minimum in New Jersey became 35/70/25 in 2026. Our guide to minimum car insurance by state lists every state's current requirement.

How much liability insurance do I need?

A common rule of thumb: carry enough liability to cover what a lawsuit could take from you. Add up your savings and investments, the equity in your home or other property, and the income you expect to earn over the next several years. The bigger that total, the higher the limits worth considering.

An umbrella policy adds a layer of liability coverage above your auto and home policies. It starts paying after your auto limits are used up. Umbrella insurers usually require fairly high auto limits underneath, and the exact amounts vary by company.

How much more do higher limits cost?

Higher limits cost less than you might expect, because most of the price of liability sits in the first layer of coverage. Here is how our model prices each step for a sample driver at typical U.S. prices: a 35-year-old with a clean record and good credit, driving a 3-to-5-year-old mid-size sedan with comprehensive and collision at $500 deductibles, plus uninsured motorist coverage that matches each set of limits.

In our model, moving from 25/50/25 to 100/300/100 adds about $182 a year, roughly $15 a month, while the limit for each injured person becomes four times as high. Going on to 250/500/250 adds about $150 a year more, roughly $13 a month. If you carry liability only, the same first step takes the liability part of the estimate from about $60 to about $73 a month, and matching uninsured motorist coverage brings the 100/300/100 estimate to about $84.

These are estimates for one sample driver. Actual prices come from insurers and depend on your state, age, record, car and details our model does not see.

Do I need uninsured motorist coverage?

Uninsured motorist (UM) coverage pays for your injuries, and in some states damage to your car, when the at-fault driver has no insurance. Underinsured motorist (UIM) coverage helps when the at-fault driver's limits are too low to cover your bills. A common rule of thumb is to match your UM and UIM limits to your liability limits, so you protect yourself as well as you protect others. In our model, UM at limits that match 100/300/100 is already part of the sample driver's estimate and accounts for about $132 a year, roughly $11 a month.

UM is required in 21 states and the District of Columbia, including Connecticut, Illinois, New York, North Carolina and Virginia. Most of the remaining states make insurers include or offer it, and you can reject it, often only in writing. Michigan and Ohio leave it fully optional. In Connecticut, Illinois, North Carolina, Virginia and Washington, among others, UM or UIM limits match your liability limits by default unless you choose lower ones.

Do I need comprehensive and collision?

Collision pays for damage to your car from a crash, whoever caused it. Comprehensive covers theft, vandalism, weather, fire, animal strikes and glass. No state requires either one, but lenders and leasing companies usually do. California's Department of Insurance consumer guide (revised 2025) warns that if you skip the coverage on a financed car, the lender may buy it and charge you.

Both pay up to your car's market value, minus your deductible. That makes them most useful when the car is newer or valuable, when you owe money on it, or when you could not easily pay for a replacement yourself. On an older car worth only a few thousand dollars, a few years of premiums can add up to more than the coverage would pay after a total loss.

In our model, collision is about $99 a month and comprehensive about $42 a month of the sample driver's $225 estimate. Our guide to comprehensive vs. collision explains what each one covers, and full coverage vs. liability shows when dropping them makes sense.

A higher deductible lowers the cost: in our model, going from $500 to $1,000 trims the sample driver's estimate by about $291 a year. See how to choose a car insurance deductible for the tradeoffs.

Do I need MedPay or PIP?

Medical payments coverage (MedPay) pays medical bills for you and your passengers after a crash, no matter who caused it, up to a set limit. Personal injury protection (PIP) is broader: depending on the state, it can also pay lost wages, household help and funeral costs.

Whether you need them often depends on where you live:

• PIP is required in no-fault states such as Florida, Michigan and New York, and in some fault states, including Delaware and Oregon. Michigan drivers choose from several PIP medical levels.
• Texas and Maryland include PIP in every policy unless you reject it in writing.
• Maine requires at least $2,000 of MedPay per person, and New Hampshire policies must include at least $1,000.

Where it is optional, agents often suggest MedPay or extra PIP for drivers who have a high health insurance deductible or often carry passengers.

A simple coverage checklist

Common questions

Is 100/300/100 good car insurance coverage?

It is a common starting point for drivers with savings or a home, and it is above the legal minimum in every state. If your net worth or income is high, agents often suggest 250/500/250 with an umbrella policy on top.

How much does 100/300/100 car insurance cost?

In our model, the estimate for the sample 35-year-old driver at typical U.S. prices is $193 to $257 a month with comprehensive and collision, or $73 to $96 a month for liability only, both with uninsured motorist coverage at matching limits. Your state, age, record and car can move this a lot. Our guide to average car insurance cost shows how prices vary.

What happens if the damages go over my limits?

Your insurer pays up to your limits, and the rest is your responsibility. The injured person can sue you personally, and depending on state law, a judgment can reach your savings, property and wages.

Does liability insurance cover my own car?

No. Liability pays for injuries and damage you cause to other people. To cover your own car, you need collision and comprehensive.