Carrying only your state's minimum liability limits keeps you legal. It doesn't necessarily keep you solvent. The average bodily-injury liability claim ran $24,211 in 2022, and property-damage claims averaged $5,313, according to III's claims data. When a claim runs past your policy limit, the rest comes out of your pocket.
This guide covers four steps: understanding what each coverage actually does, evaluating your personal risk factors, comparing limit and deductible options, and reviewing your policy as life changes. Requirements and available coverages differ by state, so treat what follows as a framework, not a final answer.
Key Takeaways
- State-required minimums are a legal floor, not protection for your savings or income
- Liability limits should reflect your assets, household drivers, and risk tolerance — not just the premium
- Collision and comprehensive protect your vehicle; liability pays for injuries and damage you cause to others
- UM/UIM, PIP, MedPay, and umbrella coverage can fill gaps that basic liability doesn't address
- A periodic review with an agent helps you compare limits, deductibles, and carrier options
What Auto Insurance Coverage Do You Need?
Auto insurance is a collection of separate protections bundled onto a single policy. "Full coverage" gets thrown around constantly, but it has no universal legal definition. It usually just means liability plus collision and comprehensive, though what that actually includes varies by insurer.
Liability Coverage
Liability coverage has two parts:
- Bodily injury (BI) liability pays for injuries you cause to other people
- Property damage (PD) liability pays for damage you cause to someone else's car, fence, or building
Your policy limit is the insurer's maximum obligation per claim, not a suggestion.
Split-limit policies are written in a shorthand like 25/50/25. Here's what that means:
| Number | What it covers |
|---|---|
| 25 | $25,000 bodily injury per person |
| 50 | $50,000 bodily injury per accident (total) |
| 25 | $25,000 property damage per accident |
Those figures are in thousands, and actual state minimums vary widely. California requires 30/60/15, Texas requires 30/60/25, and Florida's structure centers on PIP and property damage rather than a universal bodily-injury minimum. Check your own state's insurance department for current figures before assuming any of these apply to you.
Anything above your limit becomes your responsibility. That makes liability limits especially important if you own a home, earn a high income, run a business, or have meaningful savings to protect.
Collision and Comprehensive Coverage
These two coverages protect your own vehicle, not anyone else's.
- Collision generally covers damage from a crash — hitting another car, a guardrail, or a pothole
- Comprehensive generally covers non-collision events: theft, vandalism, fire, hail, falling tree limbs, or hitting a deer
The Insurance Information Institute (III) reports average 2022 claims of $5,992 for collision and $2,738 for comprehensive. Before deciding whether to keep either, compare:
- Your vehicle's current market value
- The premium and deductible you're paying for each
- Whether you could replace the car out of pocket if it were totaled
- How much you depend on the vehicle for work or daily life
Medical and Uninsured-Driver Protections
MedPay and PIP help cover medical and sometimes funeral expenses after an accident, regardless of fault. PIP in no-fault states can also cover lost wages. Requirements and benefit amounts depend entirely on where you live.
Uninsured/underinsured motorist (UM/UIM) coverage protects you when the at-fault driver has no insurance or too little. In 2023, 15.4% of drivers were uninsured, and 33.4% were uninsured or underinsured combined, according to IRC's 2025 study. Many drivers choose UM/UIM limits that match their bodily-injury liability limits, though state rules on this vary.
Additional Protection
Umbrella insurance sits on top of your auto and home or renters policies, providing extra liability protection once those underlying limits are exhausted. Insurers typically require specific underlying limits before they'll sell an umbrella policy, so this isn't a standalone purchase.
A few other options worth mentioning when they apply to your situation:
- Rental reimbursement for a replacement car during repairs
- Roadside assistance
- Gap coverage for financed or leased vehicles worth less than the loan balance
- Custom equipment coverage
- Rideshare endorsements, since standard policies usually exclude driving for Uber or Lyft
What Factors Determine How Much Coverage You Need?
There's no universal number here. The right policy depends on your exposure and your finances, not a formula that works for everyone.
State Requirements and Legal Environment
Start with your state's minimum liability, PIP, MedPay, and UM/UIM requirements. Your state insurance department's website is the authoritative source. Meeting the minimum keeps you compliant. It doesn't protect you against a large medical bill, a totaled luxury vehicle, or a lawsuit that exceeds your limit.
Assets, Income, and Liability Exposure
Your liability limits should reflect what you have to lose: savings, home equity, investments, business interests, and future income. Don't pick a limit by comparing monthly premiums alone.
A practical approach: request quotes at three tiers (state minimum, an intermediate option, and a higher limit), then compare the added premium against the added protection. Often the jump from minimum to a solid mid-tier limit costs far less than you'd expect.
Vehicle Ownership and Value
If you're financing or leasing, your lender or leasing company likely requires collision and comprehensive coverage with specific deductible limits. You don't get to opt out.
If you own your vehicle outright, weigh:
- Current market value against what you're paying for physical-damage coverage
- Your deductible and whether you could cover it from savings
- Whether you could replace the car without that coverage
Raising a collision/comprehensive deductible from $500 to $1,000 can lower premiums by roughly 20% to 25% on average, per Consumer Reports' analysis. Just make sure you could actually pay that higher deductible if something happened tomorrow.
Driving Patterns and Household Drivers
Annual mileage, commuting distance, highway driving, urban parking, and recreational use all affect your real-world exposure. So does who else drives your car.
- Teen drivers typically increase risk and premium
- Multiple household drivers may need to be listed, not just permissive users
- Occasional drivers still need to be disclosed accurately
If you have multiple vehicles and a home or renters policy, it's worth reviewing them together, not because bundling always saves money, but because gaps between policies are easier to spot side by side.
Medical Insurance and Emergency Finances
Your health insurance deductible, disability benefits, and emergency savings all factor into how much PIP, MedPay, or rental reimbursement makes sense. A household with strong health coverage and savings might need less PIP than one without either.
Choosing a high deductible purely to shave dollars off your premium can backfire if you can't actually cover that amount after a loss.
Major Life Changes and Review Timing
Review your policy when any of these happen:
- Buying a home or new vehicle
- Adding a teen driver to the household
- Marriage, divorce, or a change in household drivers
- Moving to a new state
- Changing your commute or starting rideshare/business driving
- Acquiring significant savings or other assets
At renewal, revisit your limits, listed drivers, vehicle use, deductibles, and any discounts or exclusions that might no longer fit your situation.
How Connor-McClure Insurance Services Can Help
Picking the right coverage means matching protection to your actual circumstances, not chasing the cheapest policy or maxing out every limit. That is the approach Connor-McClure Insurance Services takes with clients, rather than defaulting to a one-size-fits-all package.
Working with the agency typically means reviewing:
- Your liability exposure based on assets and household
- Whether your vehicle is financed, leased, or owned outright
- Who's driving your vehicles and how often
- Deductible options that fit your emergency savings
- Optional protections like rental reimbursement, gap coverage, or umbrella policies
As an independent agency, Connor-McClure compares options across multiple carriers, including Liberty Mutual, Chubb, and Cumberland Mutual, rather than offering a single company's product. The agency is licensed in 17 states: New Jersey, New York, Pennsylvania, Virginia, Connecticut, Massachusetts, Florida, California, Tennessee, Colorado, West Virginia, South Carolina, North Carolina, Ohio, Georgia, Louisiana, and Texas. Confirm availability and your state's specific requirements before assuming coverage applies to your location.
If you'd like a personal auto coverage review or a quote comparison, contact Connor-McClure Insurance Services at 908-782-3800 or info@connor-mcclure.com.
Conclusion
The right amount of auto insurance is whatever actually addresses your legal requirements and realistically protects your vehicle, finances, household, and ability to recover after a loss. That number looks different for a renter with one car than it does for a homeowner with three drivers and a business on the side.
Don't choose limits based on price alone or a vague "full coverage" label. Compare your liability limits, physical-damage coverage, medical protections, UM/UIM, deductibles, and umbrella needs as a complete picture.
Then revisit that picture after every major life change and at each renewal, so your policy keeps pace with your actual risk.
Frequently Asked Questions
What amount of coverage should I have on my car insurance?
It depends on your state's requirements, your assets, your vehicle's value, who drives your car, and your budget. State minimums satisfy the law but often fall short of protecting your savings in a serious claim.
Is 50/100/50 enough auto insurance?
That means $50,000 bodily injury per person, $100,000 per accident, and $50,000 property damage per accident. Whether it's enough depends on your assets, household exposure, state, and ability to absorb a loss beyond those limits. Compare higher tiers with an agent before deciding.
What does 25/50/25 mean in car insurance?
It's $25,000 bodily injury liability per person, $50,000 per accident, and $25,000 property damage per accident. The numbers are always expressed in thousands of dollars.
Is 100/300 considered full coverage?
100/300 describes bodily injury liability limits only: $100,000 per person and $300,000 per accident. "Full coverage" isn't a standardized policy type; it's an informal term that often also implies collision and comprehensive coverage.
Is $1 million liability enough for car insurance?
For some drivers with significant assets or high exposure, yes. For others, it's more than necessary or needs to be paired with an umbrella policy and specific underlying limits. It depends on your exposures, policy structure, and state rules.
Is it worth getting fully comprehensive car insurance?
Comprehensive protects against non-collision losses like theft or weather damage, not every possible loss. Whether it's worth it depends on your vehicle's value, your exposure to theft or severe weather, your deductible, and whether a lender requires it.
