How Much Car Insurance Do I Need in 2026?

Many experts say to start at 100/300/100 liability, well above what most states require. From there, it’s about your car, your budget, and what you’d owe if you cause a crash. Here’s how to weigh it.

Why do many experts start at 100/300/100?

Medical bills and repairs add up fast. If the costs from an accident you cause go past your limits, the rest can come out of your savings or paycheck.

That’s why minimum limits worry a lot of experts, and why 100/300/100 shows up so often as a reference point. It’s a benchmark, not a prescription. Your net worth, your car, and your budget all shift the right answer.

What do 25/50/25 and 100/300/100 mean?

They’re called split limits: three numbers, in thousands of dollars, that cap what your insurer pays when you cause an accident.

• First number: bodily injury liability for each injured person
• Second number: bodily injury liability for everyone hurt in one accident
• Third number: property damage liability for other people’s cars and property

So 25/50/25 pays up to $25,000 per person, $50,000 per accident, and $25,000 for property damage. At 100/300/100, those become $100,000, $300,000, and $100,000.

Some policies use a combined single limit instead. That’s one dollar amount for everything in a single accident, injuries and property together. Split limits are more common.

Many states set their state minimum car insurance at or near 25/50/25, but it varies, and some states require extras. Check your state’s rules.

Which coverages do I actually need?

Liability is the one nearly every state requires. The rest depend on your car, your budget, and your risk.

• Liability: pays for other people’s medical costs (bodily injury) and their property (property damage), like a car, fence, or storefront, when you’re at fault.
• Collision: repairs or replaces your car after a crash, minus your deductible.
• Comprehensive: handles theft, fire, hail, falling branches, and deer collisions, minus your deductible.
• Uninsured and underinsured motorist coverage (UM/UIM): protects you when the other driver has no insurance, or not enough. Matching your liability limits is a common approach.
• Personal injury protection (PIP) and medical payments coverage (MedPay): help with medical bills for you and your passengers, no matter who’s at fault. Some states require PIP, and what each covers varies by state.

Collision plus comprehensive, on top of liability, is what people usually call full coverage car insurance. It’s a nickname, not an official policy type, so check what’s actually on your policy.

How do net worth, car value, and deductibles change the number?

The more you could lose, the higher your liability limits may need to go. The less your car is worth, the less you need to insure it.

Your net worth

Here’s a quick back-of-the-napkin check. Add up what you own, like home equity, savings, and investments, then subtract what you owe. If that number is bigger than your liability limits, it’s worth thinking about raising them.

Own a house? Your equity counts, so a common starting point may fall short for you.

An umbrella policy is a separate policy that adds extra liability coverage on top of your car limits. It’s worth a look once your assets climb.

Car value and financing

If you’re financing a car, your lender will usually require collision and comprehensive until the loan is paid off, and may cap your deductible.

Leasing works the same way. Your lease may also require gap coverage, which pays the difference between what your car is worth and what you still owe if it’s totaled.

If your car is paid off, it’s your call. If you could replace it from savings without much strain, dropping collision and comprehensive can make sense. Keep your liability limits either way.

Deductibles

Your deductible is what you pay before collision or comprehensive kicks in. A higher one usually means a lower premium, which is what you pay for your policy.

Pick an amount you could pay tomorrow without borrowing. Liability doesn’t have a deductible.

Match your coverage to your driver profile

Find the driver who looks most like you, and use these as starting points rather than rules.

The low-mileage remote worker with a paid-off older car

• Liability: weigh 100/300/100 as your baseline.
• Consider dropping: collision and comprehensive, if you could replace the car from savings without strain.
• Keep: UM/UIM.

Your car may be worth little, but what you could owe after an accident isn’t. A low-mileage or pay-per-mile plan may cut your cost further, where available.

The new-parent suburban commuter with a financed SUV

• Liability: weigh 100/300/100 as your baseline, and go higher if your net worth is growing.
• Add: UM/UIM at matching limits, and PIP or MedPay where offered.
• Keep: collision and comprehensive, since your lender requires them.

Choose a deductible you could pay without stress, since a surprise bill hits harder with a baby at home. PIP or MedPay helps with medical bills for everyone in the car.

The young urban driver with an electric car (EV) lease

• Liability: weigh 100/300/100 as your baseline.
• Keep: collision and comprehensive, which leases almost always require.
• Check: whether your lease requires gap coverage too.

City parking means dings and break-ins, and EV repairs can cost more, so a lower deductible may be worth the extra premium.

The high-asset homeowner with a teen driver

• Liability: consider limits above 100/300/100, like 250/500/100.
• Add: UM/UIM at high limits.
• Keep: collision and comprehensive on every car.

Teens are statistically riskier drivers. If someone sues after a serious accident, your assets, including home equity, could be on the line. Higher limits cover the gap above your car limits. How much of your home equity is protected varies by state.

The rideshare or gig driver

• Liability: weigh 100/300/100 as your baseline.
• Add: rideshare or delivery coverage, plus PIP or MedPay where available.
• Keep: collision and comprehensive.

Personal policies often don’t cover driving for pay, so confirm what your insurer and the platform each cover. Availability varies by state.

Before we go

Once you know your numbers, a quote shouldn’t take long. If Lemonade Car is available where you live, you can get a quote in minutes.

If you don’t drive much, ask about pay-per-mile pricing where it’s offered. And if you rent or own, bundling Lemonade Car with Lemonade Renters or Homeowners can save you money.

Frequently Asked Questions

A few quick words, because we <3 our lawyers: This post is general in nature, and any statement in it doesn’t alter the terms, conditions, exclusions, or limitations of the policies issued, which differ according to your state of residence. You’re encouraged to discuss your specific circumstances with your own professional advisors. The purpose of this post is merely to provide you with info and insights you can use to make such discussions more productive! Naturally, all comments by, or references to, third parties represent their own views, and Lemonade assumes no responsibility for them. Coverage may not be available in all states. Please note that statements about coverages, policy management, claims processes, Giveback, and customer support apply to policies underwritten by Lemonade Insurance Company or Metromile Insurance Company, a Lemonade company, sold by Lemonade Insurance Agency, LLC.  The statements do not apply to policies underwritten by other carriers.