Do You Really Need $750K in Car Accident Coverage?

There's a guy down the street from me who drives an old Rolls-Royce. It's a classic -- probably from the '70s. Every time I drive past it, part of me thinks, man, I hope I never crash into that thing.

Where I live in Los Angeles, there are Ferraris, Bentleys, and fully loaded G-Wagons everywhere. Accidentally clipping one of those in just the wrong way could suddenly mean a six-figure repair bill.

While many states require minimum coverages around $25,000 to $50,000 for injuries and property damage, that won't get you far if you hit a high-end vehicle. Or worse, if you critically injure someone. You could be personally on the hook for anything your insurance doesn't cover.

On the flip side, some insurers offer policies with much higher limits. For example, $500,000 in bodily injury coverage and $250,000 for property damage.

So how do you know what's right for you?

Why the minimum state insurance might not cut it

Every state sets its own minimum requirements for car insurance.

In California, for example, the minimum liability coverage is:

• $30,000 for injury or death to one person
• $60,000 for injury or death to more than one person in a single accident
• $15,000 for property damage

This makes me pretty nervous. That $15,000 property damage limit would cover most fender benders. But what if you hit a new Porsche and damage its fancy ultrasonic parking sensors?

If insurance doesn't cover it, the other party can come after you for the difference.

A lot of people carry state minimum insurance simply because it's the easiest or cheapest option. But the right coverage isn't just about checking a legal box -- it's about protecting yourself from financial disaster.

Depending on your car, your income, and your assets, you may need a lot more than the bare minimum.

Need help deciding on the right coverage or insurer for you? Use our insurance tool to compare coverage options and connect with top-rated providers in your state.

So how much coverage should you get?

There's really no one-size-fits-all number. But many experts recommend bodily injury limits of at least $100,000 per person and $300,000 per accident, plus $100,000 in property damage coverage.

It's often referred to as 100/300/100 coverage.

In addition, it's recommended you hold collision and comprehensive coverage also. This pays to repair or replace your car if it's damaged, stolen, etc.

And for even higher protection, you might consider an umbrella insurance policy. This type of insurance kicks in after your auto limits are maxed out.

How to shop smart and get the best advice

Something I've learned over the years: Not all car insurers are great at explaining this stuff in plain English.

I always have my guard up when talking with insurance agents, because I feel that many are just trying to upsell me. Others might skip over important details I should know.

So here are some best practices for finding the right advice and policy:

1. Compare quotes from at least three different insurers
2. Ask specifically about liability limits and how each works
3. Mention your personal situation (owning a house, kids, etc.)
4. Review your policy every year or two

Even if you love your current provider, there's no harm in shopping around. You might find a company that offers better guidance or customizes coverage more thoughtfully.

Want to compare top insurers and get tailored coverage advice? Check out this free tool to compare rates and policies from the top insurance companies. It only takes a few minutes, and you could save hundreds by switching.

Is $750,000 accident coverage overkill?

In today's world of $100,000 cyborg trucks, rising medical bills, and crowded city streets, it's not a crazy number. Personally, I choose to have higher insurance numbers because I feel better protected.

You might already be halfway there with a 50/100/50 policy. Add a $1 million umbrella policy (the average cost is about $383 per year, per Forbes), and suddenly you're covered for just about anything short of a celebrity pile-up on Sunset Boulevard.

Peace of mind? Totally worth it.