Every state except a few requires some form of auto liability coverage, but state minimums are often too low to protect you.
Core coverages
Liability pays for damage and injuries you cause. Collision pays for damage to your car in an accident. Comprehensive covers theft, weather and animals. Uninsured and underinsured motorist coverage protects you from drivers with little or no insurance.
Choosing limits
State minimums can be as low as $25,000 per person, which a serious accident can exceed. Many advisors suggest at least $100,000 per person, $300,000 per accident and $100,000 property damage, or more if you have significant assets.
Saving money
Raising your deductible from $500 to $1,000 can reduce premiums. Compare quotes annually, bundle policies, maintain good credit where allowed, ask about discounts and consider dropping collision on very old cars.
Try the numbers
Use our Insurance Deductible Break-Even Calculator to see this in practice. With its default example (Low deductible: $500; High deductible: $1,500; Premium with low deductible / yr: $1,800), it shows break-even claim-free years: 3.33 years. Adjust the inputs to match your situation.
Key takeaways
- State minimum coverage is often inadequate.
- A higher deductible reduces premiums if you have savings.
- Shop quotes every year.
This article is for general education and is not personalized financial, tax or legal advice. Rules and limits change; confirm current figures with official sources such as IRS.gov, SSA.gov and StudentAid.gov, or consult a qualified professional. © 2026 FinanzCalc.