Forget Minimum Car Insurance: Here's What You Really Need

Car insurance laws might let you skate by with the bare minimum -- but that doesn't mean you should. State minimum coverage is often too low to offer real protection, and if you cause an accident, it could leave you on the hook for tens of thousands of dollars (or more).

Here's a breakdown of the coverage most people need -- not just to stay legal, but to stay financially safe.

What does "minimum coverage" include?

Every state sets its own minimum car insurance requirements, but they typically include:

• Bodily injury liability (e.g., $25,000 per person and $50,000 per accident)
• Property damage liability (e.g., $10,000-$25,000)

This covers other people's injuries and damage you cause. It doesn't cover your own injuries, your vehicle, or anything beyond those low dollar limits.

If you only have minimum coverage, a major crash could easily exceed your policy -- and the rest would come out of your pocket.

The coverage you actually need

Higher liability limits

This is the most important upgrade.

• Bodily injury liability: At least $100,000 per person and $300,000 per accident
• Property damage liability: At least $50,000

Why? Because hospital bills, vehicle repairs, and lawsuits add up quickly. These higher limits cost more, but the added protection is worth it.

Uninsured/underinsured motorist coverage

If you're hit by a driver with no insurance (or not enough), this coverage kicks in. It often mirrors your own liability coverage.

It's especially valuable in states with lots of uninsured drivers, and it usually only costs a few extra dollars per month.

Comprehensive and collision coverage

These protect your own vehicle.

• Collision: Covers damage from crashes, even if you're at fault
• Comprehensive: Covers non-crash events like theft, hail, fire, or vandalism

If your car is worth more than a few thousand dollars -- or you can't afford to replace it out of pocket -- this coverage is a must.

Note: If you have an auto loan or lease, the lender will usually require both.

Ready to upgrade your policy? Click here to compare quotes from top carriers and find the coverage you need at a rate you can afford.

Extras you may (or may not) need

Rental reimbursement:

• Pays for a rental car while yours is in the shop after a covered claim
• Worth it if you don't have a backup vehicle
• Costs around $2 to $15 per month depending on the insurer, the policy, where you live, etc.

Roadside assistance:

• Covers towing, battery jumps, flat tire help, etc.
• Often cheaper than AAA
• Handy if you drive older or high-mileage vehicles

Gap insurance:

• If you have an auto loan balance that's greater than the car's value, then this coverage pays the difference if your car is stolen or totaled
• Useful for new cars with small down payments
• Not needed if you owe less than the car is worth

How to decide what you need

Ask yourself:

• Could I pay out of pocket for a $50,000 lawsuit?
• Could I replace my car today with no help from insurance?
• How much would losing my car for weeks affect my life?

If those questions make you nervous, then you probably want more robust coverage.

The lowest premium might cost you more in the long run

State minimum car insurance is like a leaky umbrella -- it might protect you in a drizzle, but not in a storm. By boosting your liability limits and adding essential protections like uninsured motorist and collision coverage, you'll have peace of mind when it matters most.

The good news is you don't have to pay a fortune for a good car insurance policy. To find great coverage and great prices, check out this free tool to compare rates and get matched with top-rated insurance providers.