Liability protects everyone else
Bodily injury and property damage liability pay for harm you cause to others. State minimums are often as low as 25/50/25, meaning $25,000 per person, $50,000 per accident, and $25,000 property damage. A single hospital stay or a totaled SUV can exceed those numbers quickly.
Most agents recommend at least 100/300/100 for anyone with a home, savings, or steady income, because a judgment above your limits comes out of your assets.
Collision and comprehensive protect your car
Collision pays to repair your vehicle after an accident regardless of fault. Comprehensive covers theft, weather, fire, glass, and animal strikes. Both are optional unless you have a loan or lease.
When a car’s value falls below roughly ten times the annual cost of collision coverage, many owners choose to drop it and self-insure.
Uninsured and underinsured motorist
About one in eight drivers nationally carries no insurance. UM/UIM coverage pays your medical bills and, in some states, vehicle damage when the at-fault driver cannot. Match these limits to your liability limits.
When an umbrella makes sense
A personal umbrella policy adds $1 million or more of liability above your auto and home limits, typically for a few hundred dollars a year. If you have teen drivers, a pool, rental property, or meaningful assets, it is usually the best value on the policy.
Key takeaways
- Liability limits should reflect what you have to lose, not the state minimum.
- Drop collision when the car’s value no longer justifies the premium.
- Match UM/UIM to your liability limits.
- An umbrella policy is inexpensive protection for anyone with assets.
This guide is general education, not advice for your situation. Coverage, availability, and requirements vary by state and carrier. A licensed agent can confirm what applies to you.