How Much Car Insurance Do You Need?

By: August 12, 2013 Tips for Drivers

Too Little? Too Much? What’s Just Right?

Car insurance is designed to protect you, and other drivers on the road, in the event of an accident. It is meant to pay for damages to cars, if full coverage is part of your policy. If you carry basic liability coverage, it will not cover repair costs your own your vehicle, but will cover repair costs and medical expenses associated with the other vehicle(s) in accident that is deemed your fault. As important as coverage is, it’s estimated that one in seven drivers on the road does not have any car insurance coverage at all, though basic liability insurance coverage is a requirement to legally own and operate a vehicle. That being said, however, how much coverage is enough?

Coverage Minimums Vary by State

Though every state in the United States requires drivers to carry basic liability coverage to protect them in the event of an at fault accident, each state has varying laws on how much coverage is required. Because state laws are always changing, it is best to speak to an insurance agent in your local area to determine the minimum requirements to ensure you’re legal. You can always carry more, and in cases of brand new cars, it is always a good idea to carry enough to at least cover the cost to replace the vehicle. When you finance a vehicle, the bank generally requires you to carry liability, as well as comprehensive coverage, which will cover any damage and the value of the vehicle at the time of loss.

The chart below shows what every state requires, in thousands of dollars of coverage. The numbers from left to right represent:

  • Bodily injury liability for one person in an accident
  • Bodily injury liability for all people injured in an accident
  • Property damage liability for one accident

The yes/no represents whether or not you are required to have uninsured and/or underinsured motorist coverage on your policy. That coverage protects you if someone who drives your car is not insured, or does not carry enough insurance to cover an accident they cause while driving your vehicle.

Table of Car Insurance Minimums

Alabama 25/50/25 No
Alaska 50/100/25 No
Arizona 15/30/10 No
Arkansas 25/50/25 No
California 15/30/5 No
Colorado 25/50/15 No
Connecticut 20/40/10 Yes
Delaware 15/30/10 No
D.C. 25/50/10 Yes
Florida 10/20/10 No
Georgia 25/50/25 No
Hawaii 20/40/10 No
Idaho 25/50/15 No
Illinois 20/40/15 Yes
Indiana 25/50/10 No
Iowa 20/40/15 No
Kansas 25/50/10 Yes
Kentucky 25/50/10 No
Louisiana 15/30/25 No
Maine 50/100/25 Yes
Maryland 30/60/15 Yes
Massachusetts 20/40/5 Yes
Michigan 20/40/10 No
Minnesota 30/60/10 Yes
Mississippi 25/50/25 No
Missouri 25/50/10 Yes
Montana 25/50/10 No
Nebraska 25/50/25 No
Nevada 15/30/10 No
New Hampshire 25/50/25 Yes
New Jersey 15/30/5 Yes
New Mexico 25/50/10 No
New York 25/50/10 Yes
North Carolina 30/60/25 Yes
North Dakota 25/50/25 Yes
Ohio 12.5/25/7.5 No
Oklahoma 25/50/25 No
Oregon 25/50/10 Yes
Pennsylvania 15/30/5 No
Rhode Island 25/50/25 No
South Carolina 25/50/25 No
South Dakota 25/50/25 Yes
Tennessee 25/50/15 No
Texas 30/60/25 No
Utah 25/65/15 No
Vermont 25/50/10 Yes
Virginia 25/50/20 Yes
Washington 25/50/10 No
West Virginia 20/40/10 Yes
Wisconsin 25/50/10 Yes
Wyoming 25/50/20 No

Conclusion

Even though the state sets the minimum limit you must carry, for most drivers, it is a better idea to carry at least a bit more than the minimum coverage required by your state. Adding a few thousand dollars more in coverage amounts typically will not drastically affect your annual premium. However, if you have a high insurance rate because you’re a new driver, you’ve got speeding tickets, prior DUI charges, etc., it is better to carry the minimum amount to remain legal, and then increase your coverage when your rate decreases to normal. Your rate also depends on the car you drive, too–with older cars being less expensive, and sedans being less expensive than coupes.

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