How Much Car Insurance Do I Need?

When it comes to car insurance, there is no “one size fits all” approach that works. Not only does the coverage you need depend on your unique, personal situation, but it also depends on where you live. Each state has its own requirements for the minimum insurance drivers should carry.

Most states require at least $50,000 in coverage for bodily injury and $25,000 for property damage liability coverage. Some states may require different amounts or different types of coverage. So, how much car insurance do you need?

Car Insurance Needed in Each State

Most US states require bodily injury liability and property damage coverage, which help cover the other party’s medical and property damage costs after an accident. Many states also require additional coverages, like personal injury protection to help cover your medical expenses.

Some states, however, are outliers. Virginia and New Hampshire are the only two states that don’t have car insurance liability limits. Additionally, in Virginia, you may pay a $500 annual fee to drive without insurance. 

New Hampshire also has a few unique rules. In the Granite State, drivers must meet the state’s financial responsibility requirements. Your license may be suspended until you pay for accident-related damage. 

Here is a more detailed breakout of the minimums required in each of the 50 states. While these minimums are just the lowest required amount, you may want additional coverage based on your own needs and any unique factors. 

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The Types of Auto Insurance Coverage You May Need

Beyond liability insurance, there are several types of auto coverage that may be required or recommended, depending on the state where you live. The auto insurance coverage you should have will depend on those requirements and the level of protection you choose, as well as your budget.

Common car insurance coverage types include:

• Uninsured/underinsured motorist coverage: This policy helps cover expenses if you or another designated driver on your policy is hit by an underinsured or uninsured driver who is found at fault. It will also help cover expenses caused by a hit-and-run accident or if you’re hit as a pedestrian.
  
  This coverage type is required in several states, and it’s a wise option to have because it helps minimize your out-of-pocket expenses. If you opt for this coverage, consider purchasing protection equal to or greater than your total liability coverage.
  
• Collision coverage: This insurance type helps pay for damage to your vehicle that’s caused by hitting another car or object, your vehicle rolling over, or hitting potholes, regardless of who is at fault. It’s rarely required by states but can be a beneficial supplement to your main policy.
  
  If the other driver is at fault, your insurance provider may seek damages from their insurance company. If they’re successful, you may also be reimbursed for your deductible amount. Collision coverage is typically equal to the market value of your vehicle.
  
• Comprehensive insurance: Comprehensive insurance can help cover expenses related to non-collision incidents, such as theft, natural disasters, vandalism, riots, fires, or animal-related damage. It may also cover damage to your windshield.
  
  Comprehensive coverage is also rarely required by states, but it rounds out the protection you have for your vehicle. For this reason, it may be required by your auto loan lender until the car is paid off. Comprehensive policy limits should be comparable to the market value of your vehicle.
  
• Personal injury protection (PIP): PIP is required by several states in the US. It offers more robust medical and injury-related expense protection for you and any passengers in your car if an accident occurs. It may help cover medical payments, lost income, funeral expenses, and more.
  
  If you purchase PIP, it’s generally recommended to seek a policy that’s equal to or greater than your state’s suggested liability protection. Remember, PIP helps cover your costs related to injury or physical harm, whereas bodily injury liability helps cover the other driver’s costs.
  
• Guaranteed auto/asset protection: Also known as gap insurance, this policy option can help close ‘gaps’ in your coverage if you lease or finance your vehicle and it gets totaled or stolen. Though states don’t require gap insurance, lenders and dealers may require it.
  
  Remember that collision and comprehensive insurance policies typically only cover the market value of your car, not what you paid when you bought it. Cars depreciate quickly, and it’s not uncommon for there to be a period where you owe more than the car is currently worth.
  
  If you owe more on your vehicle than your collision or comprehensive policies can pay, gap insurance helps cover the difference.
  
• Emergency roadside assistance: This is typically available as an add-on to your primary insurance policy. With this coverage, you may receive roadside assistance for little to no cost. It may include towing, fuel deliveries, jumpstarts, tire replacements, lockout assistance, and more.
  
  While not required, it’s often fairly affordable to add to your main policy, and it can come in handy if you find yourself in a pinch.
  
• Mechanical breakdown insurance: Another supplemental policy option, mechanical breakdown insurance can help cover the costs of repairs not covered by your main insurance. This includes unexpected mechanical failures and breakdowns for all mechanical components.
  
  This option doesn’t usually cover intentional damage, wear and tear, or damage caused by improper use or care of the vehicle.
  
• Windshield insurance/full glass coverage: If you don’t have comprehensive coverage, or if your comprehensive policy doesn’t cover your windshield, then you may benefit from windshield insurance or full glass coverage.
  
  Windshields are easily damaged and can cost hundreds to repair/replace, but windshield or full glass replacement coverage can help cover those costs. It’s not usually required but may save you cash in the long run.
  
• Rental car insurance: This insurance is specifically designed to help cover risks while you’re renting a vehicle. There are several types of rental car coverage that may be offered to you: loss damage waiver, personal accident insurance, and personal effects coverage.
  
  Loss damage waivers waive your financial responsibility for associated damage and losses if the rental car is harmed or stolen. Personal accident insurance can help cover your and your passengers’ medical costs. Personal effects coverage may reimburse you for stolen belongings.
  
  If you have existing homeowners or auto insurance policies, they may help cover some or all of these risks. Check with your local independent insurance agent to see if they do and if additional rental car coverage is recommended.
  

How Much Does Car Insurance Cost?

As with many types of insurance, the cost of car insurance depends on several factors, including state requirements, car type and condition, and any supplemental coverage options. Your age, driving history, and credit history may also influence your rates. The average annual cost of auto insurance in the US is $1,311 or roughly $110 a month. Discounts may be available, such as for staying accident-free or taking a safe driving course. 

Speak with your independent insurance agent to get the coverage that’s right for you, and use Trusted Choice’s car insurance calculator to estimate your auto insurance costs.