Most drivers either carry the state minimum — which is often dangerously inadequate — or they carry whatever their carrier sold them without thinking hard about it. Neither approach is good. The right answer depends on your net worth, your car's value, and your risk tolerance. Here's how to think through it.
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Use the coverage calculator →Liability: the number that matters most.
Liability coverage pays for injuries and property damage you cause to other people. This is where most drivers are dangerously underinsured. State minimums like 25/50/25 mean $25,000 per person, $50,000 per accident in bodily injury, and $25,000 for property damage. A single serious accident in a dense metro can exceed these limits in medical bills alone — and once the limit is exhausted, your personal assets are exposed to a lawsuit.
The general rule: carry at least 100/300/100 if you have meaningful assets. If your net worth is over $300,000, consider 250/500/100 or an umbrella policy. The cost difference between state minimums and 100/300/100 is often $10–$20 per month. That's not the place to economize.
Collision and comprehensive: the car value threshold.
Collision coverage pays to repair or replace your car after an accident you're at fault for. Comprehensive covers theft, weather, and non-collision damage. Both come with a deductible — typically $500–$1,000 — that you pay before the carrier covers the rest.
The math: if your car's market value is less than 8–10 times your deductible, you're paying for coverage that can never pay out more than what you'd save by dropping it. A car worth $4,000 with a $500 deductible gets you a maximum payout of $3,500 — minus the annual premium for the coverage itself. For older, paid-off vehicles, dropping collision and comprehensive is often the right call.
Quick rule of thumb: if your car is worth less than $6,000, seriously consider dropping collision. Keep comprehensive — it's cheap and covers theft. The decision depends on whether you could absorb the loss of the vehicle without financial hardship.
Uninsured and underinsured motorist coverage.
UM/UIM coverage protects you when the at-fault driver has no insurance or not enough insurance. In most states, 12–15% of drivers are uninsured. In some states — Florida, Mississippi, New Mexico — the rate exceeds 20%. UM/UIM is inexpensive relative to its value, and in states with high uninsured rates it's close to mandatory as a practical matter even when not legally required. Carry it at the same limits as your liability.
PIP and MedPay: do you need both?
Personal Injury Protection (PIP) and Medical Payments (MedPay) both cover medical expenses for you and your passengers regardless of fault. PIP is broader — it can cover lost wages and other expenses beyond medical bills. In no-fault states like Florida, Michigan, and New Jersey, PIP is required. In other states it's optional.
If you have solid health insurance with low out-of-pocket maximums, you may not need much PIP or MedPay on top of it — your health insurance handles the medical bills and your disability coverage handles lost wages. If you have poor health coverage or no disability insurance, PIP becomes more valuable. Don't pay for both unless your state requires it and your health coverage is genuinely weak.
Gap insurance: only for new or financed vehicles.
If you're financing or leasing a vehicle, gap insurance covers the difference between what you owe on the loan and what the car is worth if it's totaled. New cars depreciate fast — a car worth $35,000 today might be worth $28,000 in 18 months, while you still owe $32,000. Gap insurance covers that $4,000 shortfall. If you bought the car outright or your loan balance is less than the car's market value, you don't need it. Dealers markup gap insurance aggressively; buying it from your carrier is almost always cheaper.
The coverage calculator walks through all of this based on your specific numbers — car value, net worth, existing health coverage. It takes about two minutes and tells you exactly what to buy and what to skip.