How Much Car Insurance is Enough? A Buyer’s Guide

You’re driving down the highway and someone rear-ends your car. Boom, now there’s a hole in your bumper. Or maybe you’re the one doing the rear-ending.

Accidents happen, and sometimes you’re financially responsible.

You don’t want to pay for a car accident that’s simply that, an accident. We bet you know where this is going. That’s right, you need car insurance. But do you know how much car insurance is enough?

What even qualifies as adequate car insurance? Is it the minimum that your state requires? While technically that’s enough car insurance, you should probably carry more than the minimum.

That’s why we’re bringing you our guide to the how much car insurance is enough. Let’s get started.

Let’s Talk Insurance Basics

You can’t select the proper insurance plan without understanding the car insurance basics. For instance, what do you know about deductibles? How about insurance premiums?

Both deductibles and premiums are examples of varying insurance coverage. Let’s delve into the basics of car insurance.


Your deductible refers to the damages you have to pay before your insurance covers any damages. Say you run onto the curb and mess up your fender. Let’s also say your deductible is $100.

The repair costs $100, meaning you pay the $100 and your insurance covers the remaining $900.

Your deductible applies to each insurance claim. You’ll pay the same deductible for any other accidents. If you have an accident and the repairs don’t exceed your deductible, you’re responsible for the entire repair cost.

What’s more, you’ll probably have two different deductible costs, depending on your coverage. Collision and comprehensive coverage cover different things (more on that later) and so have different costs.

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Car insurance premiums refer to your monthly car insurance payment. If you pay $100 per month, you’re paying a $100 premium. The higher your premium, the higher your coverage level.

Coverage Limits

Coverage limits are exactly what they sound like: how much your insurance will pay out on any given claim. How much coverage you need directly addresses the question, “How much car insurance is enough?”

Collision versus Comprehensive

Collision and comprehensive are the two main types of car insurance. The type of insurance you choose depends on how much coverage you need.

Collision insurance is just as it sounds: insurance against car accidents. Comprehensive insurance protects against fire, natural disasters, theft, and more.

The type of insurance you should carry depends on your environment. If you live in a flood-prone area, you’ll probably want comprehensive insurance. Likewise, if you frequently drive in traffic, you’ll want more collision insurance.

If you need extra help deciding, check out these Liberty Mutual insurance reviews. They break down insurance types to help you choose the best plan.

So How Much Car Insurance Is Enough?

Answering “How much car insurance is enough?” comes down to your unique situation. Depending on your circumstances, you might need more or less insurance or even a different type of insurance.

And if you ever need a repair after a car collision, our auto repair information blog has you covered. We strive to bring you all you need to know to fix your car, from radiators to oil pans.