How much car insurance coverage do I need for a new car?
Most states require car insurance, but buying more coverage is usually worth it. Though it costs more, the average full coverage policy is $150 a month.
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Joel Ohman
Founder & CFP®
Joel Ohman is the CEO of a private equity backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Jo...
Founder & CFP®
UPDATED: Nov 28, 2022
It’s all about you. We want to help you make the right coverage choices.
Advertiser Disclosure: We strive to help you make confident car insurance decisions. Comparison shopping should be easy. We are not affiliated with any one car insurance company and cannot guarantee quotes from any single company.
Our partnerships don’t influence our content. Our opinions are our own. To compare quotes from top car companies please enter your ZIP code above to use the free quote tool. The more quotes you compare, the more chances to save.
Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.
UPDATED: Nov 28, 2022
It’s all about you. We want to help you make the right coverage choices.
Advertiser Disclosure: We strive to help you make confident car insurance decisions. Comparison shopping should be easy. We are not affiliated with any one car insurance company and cannot guarantee quotes from any single company.
Our partnerships don’t influence our content. Our opinions are our own. To compare quotes from top car companies please enter your ZIP code above to use the free quote tool. The more quotes you compare, the more chances to save.
On This Page
- Most states require a minimum amount of car insurance before you can legally drive or register a car, which commonly includes liability coverage
- If you have a car loan or lease, or a newer car, consider full coverage to protect your vehicle better
- The average minimum insurance policy in the U.S. costs about $50 a month, while full coverage plans typically cost $150
You probably already know that you need insurance when you buy a new car. However, the amount of insurance you need can be confusing, especially if you’re unfamiliar with the types of car insurance coverage available for purchase.
There are several factors to consider when you need insurance. For example, nearly every state has a minimum liability requirement. Some states also require uninsured motorist or personal injury protection insurance. You’ll also likely need more insurance on a financed car.
You can learn more about your coverage options below, including what you’ll need before you can legally drive. Then, compare rates with as many companies as possible to make sure you get the most affordable policy.
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Minimum Car Insurance Requirements by State
When you’re in the market for car insurance, the first place you should look is your state’s minimum car insurance requirements. Besides Virginia and New Hampshire, every state requires at least liability car insurance before driving or registering a car. Check below to see how much insurance you need in your state.
State | Minimum Liability Requirements |
---|---|
Alabama | 25/50/25 |
Alaska | 50/100/25 |
Arizona | 15/30/10 |
Arkansas | 25/50/25 |
California | 15/30/5 |
Colorado | 25/50/15 |
Connecticut | 25/50/20 |
Deleware | 25/50/10 |
District of Columbia | 25/50/10 |
Florida | 10/20/10 |
Georgia | 25/50/25 |
Hawaii | 20/40/10 |
Idaho | 25/50/15 |
Illinois | 25/50/20 |
Indiana | 25/50/25 |
Iowa | 20/40/15 |
Kansas | 25/50/25 |
Kentucky | 25/50/25 |
Lousiana | 15/30/25 |
Maine | 50/100/25 |
Maryland | 30/60/15 |
Massachusetts | 20/40/5 |
Michigan | 20/40/10 |
Minnesota | 30/60/10 |
Mississippi | 25/50/25 |
Missouri | 25/50/25 |
Montana | 25/50/20 |
Nebraska | 25/50/25 |
Nevada | 25/50/20 |
New Hampshire | 25/50/25 |
New Jersey | 15/30/5 |
New Mexico | 25/50/10 |
New York | 25/50/10 |
North Carolina | 30/60/25 |
North Dakota | 25/50/25 |
Ohio | 25/50/25 |
Oklahoma | 25/50/25 |
Oregon | 25/50/20 |
Pennsylvania | 15/30/5 |
Rhode Island | 25/50/25 |
South Carolina | 25/50/25 |
South Dakota | 25/50/25 |
Tennessee | 25/50/15 |
Texas | 30/60/25 |
Utah | 25/65/15 |
Vermont | 25/50/10 |
Virginia | 25/50/20 |
Washington | 25/50/10 |
West Virginia | 25/50/25 |
Wisconsin | 25/50/10 |
Wyoming | 25/50/20 |
When shopping for coverage, you’ll need to meet at least the minimum coverage car insurance requirements. The good news is that minimum insurance is affordable and your cheapest option.
What happens if you drive without car insurance?
Driving without insurance in a state requiring it can have disastrous consequences. There are two types of insurance violations: being unable to prove coverage and driving without it. You’ll face much lighter consequences if you have insurance but can’t prove it.
Deciding to get behind the wheel of your car without insurance can result in the following penalties:
- Tickets and fines
- Vehicle impoundment
- Car insurance rates increase
- License or registration suspension
- License reinstatement fees
- Jail time
- SR-22 car insurance requirement
The specific consequences of driving without insurance vary by state, but most drivers must pay a fine, face license suspension, and SR-22 forms.
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Should you buy more than the minimum car insurance in your state?
While many drivers benefit from buying more than minimum insurance, it’s not always necessary. A good way to tell if full coverage is worth the price is to consider your deductible cost compared to your car’s value.
For example, paying for full coverage might not make sense if your car is worth $2,000 and your deductible is $1,000. Learn more about the best full coverage car insurance rates.
However, most drivers benefit from more coverage. To get an idea of what types of insurance might be right for you, consider the following coverage types.
What types of car insurance should you buy?
Minimum insurance isn’t always enough. Drivers with a car loan or lease usually must get full coverage, which includes the following:
- Bodily injury liability. Bodily injury liability pays for damages resulting from injuries to others when you’re at fault in an accident.
- Property damage liability. Property damage liability covers damage you cause to cars, buildings, and other property. It doesn’t cover your vehicle.
- Comprehensive insurance. Comprehensive insurance covers unexpected events that damage your car, including fire, floods, vandalism, theft, and animal contact.
- Collision insurance. Collision insurance pays for your car repairs after an accident, regardless of fault. It also covers you if you run into a stationary object, like a mailbox.
- Uninsured/underinsured motorist insurance. While most states require car insurance, not everyone follows the law. Uninsured motorist insurance protects you from drivers without coverage, insufficient coverage, and hit-and-runs.
- Personal injury protection/medical payments. Medical bills after an accident can be costly, but personal injury protection or medical payments insurance helps pay for them.
Full coverage offers valuable protection for your car, but it’s not the best fit for everyone. For example, if your vehicle is older or less valuable and you own it outright, you can probably skip full coverage insurance.
Additional Car Insurance Options
Aside from the standard car insurance options, you can purchase other add-on coverages to increase your policy’s value. Some of the most popular options include:
- Roadside assistance. Roadside assistance rescues you when you get stranded with a flat tire, dead battery, or empty gas tank. Most companies also include locksmith services in their roadside assistance plans.
- Rental car reimbursement. If your car gets stuck in the repair shop after a covered incident, this coverage helps pay for a rental car while you wait.
- Original parts and equipment. This coverage allows for original replacement parts from your car’s manufacturer instead of aftermarket parts. People who modify their vehicles should consider original parts and equipment insurance to protect their investment. Here’s a list of car insurance companies offering OEM parts coverage.
- GAP insurance. If you total your car but owe more on its loan than the vehicle’s value, you’ll be stuck paying for something you no longer drive. GAP insurance pays the remainder of your loan.
Most major insurance companies offer these add-ons and several others to increase your car’s protection. However, be cautious about adding coverage to your policy — add-ons can significantly increase your insurance rates.
How much does car insurance cost?
Insurance companies look at various factors to determine your rates, including your age, location, driving history, credit score, and car type. However, you can get an idea of how much you might pay by looking at the average insurance cost in your state. Find out what factors affect car insurance rates.
Age and Gender | Allstate | Geico | Liberty Mutual | Nationwide | Progressive | State Farm | National Average |
---|---|---|---|---|---|---|---|
65 Y/O Male w/a Clean Record | $1,878 | $941 | $2,022 | $1,347 | $1,234 | $1,010 | $1,381 |
65 Y/O Female w/a Clean Record | $1,900 | $938 | $1,991 | $1,327 | $1,312 | $1,010 | $1,383 |
As you can see, there are some significant differences between states. Some states have higher insurance rates due to extreme weather risks, while others have higher coverage requirements.
Regardless of how much average insurance costs are in your state, there are plenty of ways to save. If you’re trying to stay on a budget, compare car insurance quotes, take advantage of discounts, and choose the right deductible.
How much should your deductible be?
When you file a car insurance claim, your deductible is the amount you need to pay before your insurance kicks in. Your liability insurance doesn’t include a deductible, but most other types of coverage have one.
When you sign up for a policy, your insurer will ask you to choose a deductible. Most companies offer deductibles between $100 and $2,000. If you choose a higher deductible, your monthly rates will be lower. However, you’ll run the financial risk of paying more if you need to file a claim.
Find the Right Car Insurance Today
Finding the right amount of car insurance might seem confusing, but it doesn’t have to be difficult. If you need more information about your coverage options, an insurance representative can help.
Once you know how much insurance you need, your next step should be comparing quotes. By looking at as many companies as possible, you’ll be able to find the best policy for your needs.
Frequently Asked Questions
Is car insurance required?
In most states, you must have car insurance before driving or registering a vehicle. The most commonly required type of insurance is liability, though many states require uninsured motorist or personal injury protection.
What states don’t require car insurance?
New Hampshire and Virginia are the only states that don’t require car insurance, but that doesn’t mean you don’t have any financial responsibility after an accident. For example, Virginia drivers must pay an uninsured motorist fee, while New Hampshire drivers must prove they can pay for damages they cause.
Why do you need car insurance?
Aside from meeting requirements in your state, car insurance offers valuable protection for your car. If you don’t have car insurance, you’ll pay for damages you cause and your vehicle repairs by yourself.
How long do you need car insurance?
You should at least keep liability insurance if you own a car. When it comes to full coverage, you only need it when you have a loan or lease or can’t afford to replace your vehicle outright. Once your car’s value drops low enough, it might be a good idea to lower your coverage.
What happens if you drive without insurance?
If you live in a state requiring car insurance, you’ll face serious penalties if you drive without coverage. Consequences for driving without car insurance include fees, license suspension, insurance price increases, and even jail time.
Free Car Insurance Comparison
Enter your ZIP code below to view companies that have cheap car insurance rates.
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Joel Ohman
Founder & CFP®
Joel Ohman is the CEO of a private equity backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Jo...
Founder & CFP®
Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.