How Much Car Insurance Do You Really Need in 2022? State by State
You need at least $50,000 in bodily injury liability insurance coverage in most states, along with at least $25,000 in property damage liability insurance. some states also require drivers to have uninsured motorist coverage and pip or medpay.
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A good rule of thumb is to supplement your state-required auto insurance with enough additional coverage to equal your net worth. This may involve increasing your liability coverage limits, as well as adding optional types of auto insurance, such as collision and comprehensive coverage.
Reading: How much car insurance coverage do i really need
car insurance requirements by state
car insurance requirements by state
from January 2022
types of car insurance coverage
civil liability insurance
Liability insurance includes both bodily injury liability insurance and property damage liability insurance and pays the other driver’s expenses after accidents you cause. It may also cover your legal costs if you are sued after causing an accident.
- do I need it? yes, liability insurance is required in most states.
- Tip: You need enough liability insurance to cover your assets.
- do I need it? you need pip if you live in one of the 12 states that require it.
- Tip: Even if pip is optional in your state, it’s worth the investment as it can also cover your passengers and doesn’t have as high a deductible as most health insurance plans.
- do I need it? yes, if you live in maine or new hampshire, where medpay is required.
- Tip: Even if it’s not required, medpay is still a worthwhile investment, as it’s relatively inexpensive and can cover pip and health insurance deductibles. the minimum amount of medpay coverage available is sufficient for most people along with their health insurance.
- do I need it? Twenty states and the District of Columbia require uninsured motorist coverage, and 14 states require underinsured motorist insurance.
- Tip: Since it’s fairly affordable and can really come in handy, it’s worth adding uninsured/underinsured motorist coverage to your policy, even if it’s not required by law in your state.
- do I need it? If your car is leased or financed, you may need to have collision insurance.
- Tip: Even if it’s not required, collision insurance is a good investment for people who can’t afford to replace or repair their vehicles out of pocket after an accident. Collision insurance is also recommended for those who drive frequently and in high-traffic areas, and for people who prefer not to spend all of their savings on car repairs or a replacement car after an accident.
- do I need it? if your car is leased or financed, you may need to have comprehensive insurance.
- Tip: Even if it’s not required, it’s helpful to have comprehensive insurance, especially if you can’t afford to replace your car out of pocket, live in an area with high rates of theft or vandalism, or want to protect avoid wiping out your savings if your car is seriously damaged.
- do I need it? If your car is leased or financed, you may need to have gap insurance.
- Tip: If you owe more on a loan or lease than your car is worth, it’s a good idea to have gap insurance.
- do I need it? no, roadside assistance is never necessary.
- Tip: It’s worth investing in roadside assistance if you’re concerned about the reliability of your vehicle. if you drive often or take long trips, roadside assistance can be a great way to make sure you don’t get stranded.
- do I need it? no, mbi is never required.
- Tip: If you have a new car that you plan on driving for a while, mbi is a fairly inexpensive way to protect your car from failure.
- do I need it? no, windshield insurance and full glass coverage are never required.
- Tip: If you don’t have collision or comprehensive coverage, windshield insurance is an easy way to make sure your windshield can be cheaply repaired or replaced, whether it’s damaged in an accident or cracked with a pebble while driving.
personal injury protection (pip)
pip covers medical costs for you and your passengers after an accident, no matter who was at fault. It can also pay for other accident-related expenses, like lost wages and child care.
medical expenses (medpay)
medpay is similar to pip and covers medical costs for you and your passengers after an accident. medpay can be used for a claim no matter who was at fault in an accident, but it doesn’t cover lost wages and typically has lower policy limits than pip.
uninsured/underinsured (um/uim) driver
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Underinsured or uninsured motorist coverage can help you if you’re hit by an uninsured driver, hit-and-run, or collided with someone who doesn’t have enough coverage to pay for all the damage you caused.
Collision insurance covers damage to your vehicle after an accident. Collision insurance also includes a deductible, which is the amount you must pay out of pocket before insurance pays the rest of the bill. you can choose your deductible, but lower ones come with higher premiums.
all risk insurance
If your car is damaged in something other than a collision, you’ll need comprehensive coverage for a claim. this includes damage caused by vandalism, theft, weather, and wildlife. Like collision insurance, you’ll need to choose a deductible.
guaranteed auto/asset protection (gap)
Cars depreciate quickly, and you could easily end up owing more on your loan or lease than the vehicle is worth if your car is destroyed. gap insurance covers that gap and pays the difference if your car is a total loss.
emergency roadside assistance
Emergency Roadside Assistance is a coverage option that provides assistance if you are locked out of your car, need a tow or jump start, have a flat tire, or run out of gas. If your car doesn’t work, you can get a tow to a nearby garage of your choice, up to a specified distance.
mechanical breakdown insurance
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Mechanical Breakdown Insurance (MBI) can cover the cost of repairs to mechanical parts and systems, such as a car’s engine, transmission, and power system. This coverage is similar to extended warranties and service contracts, but unlike those products, you pay a monthly premium instead of paying a lump sum up front. mbi also covers more vehicle systems than most extended warranties.
windshield insurance/full glass coverage
If you don’t have comprehensive or collision insurance to replace a damaged windshield, you may be able to get windshield insurance instead. otherwise, a standard liability insurance plan will not pay for your own windshield repairs or replacement. however, if you are in an accident that is not your fault, the other driver’s liability insurance will pay for your windshield repairs.
getting caught driving without car insurance
Driving without minimum auto insurance coverage is very risky. it could even have potentially transformative consequences. If you’re pulled over and don’t have insurance, you could face fines, license and registration suspensions, and costly surcharges on your insurance premiums. If you are uninsured or underinsured and have an accident, you could end up paying thousands of dollars out of pocket to cover the costs of property damage and medical bills. And if you can’t pay, your wages could be garnished and your assets seized.
even going with the bare minimum could be a risky choice, as you will still be liable if something disastrous happens. Remember, insurance only pays up to the limits of your coverage, so the recommended auto insurance coverage depends on your net worth.
video: how much car insurance do I need?
ask the experts
To learn more about how much car insurance is needed, Wallethub posed the following questions to a panel of experts. Click on the experts below to see their biographies and answers.
1. Why do different states have such different car insurance requirements? 2. Should drivers buy more coverage than the state minimum? 3. What types of auto insurance coverage should non-mandatory drivers consider?