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How much car insurance coverage do I need for a new car?

If you are wondering how much car insurance coverage do I need for a new car, the answer is that it depends. If you don't have a leased vehicle, you can carry minimum coverage, which costs an average of $44/mo. However, full coverage is usually best for new cars and costs an average of $132/mo.

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Written by:

Scott W. Johnson

Licensed Insurance Agent

Scott W Johnson is an independent insurance agent in California. Principal Broker and founder of Marindependent Insurance Services, Scott brings over 25 years of experience to his clients. His Five President’s Council awards prove he uses all he learned at Avocet, Sprint Nextel, and Farmers Insurance to the benefit of his clients. Scott quickly grasped the unique insurance requirements of his...

Licensed Insurance Agent

Reviewed by:

Jeffrey Manola

Licensed Insurance Agent

Jeffrey Manola is an experienced insurance agent who founded TopQuoteLifeInsurance.com and NoMedicalExamQuotes.com. His mission when creating these sites was to provide online consumers searching for insurance with the most affordable rates available. Not only does he strive to provide consumers with the best prices for insurance coverage, but he also wants those on the market for insurance to ...

Licensed Insurance Agent

UPDATED: May 5, 2024

Advertiser Disclosure

It’s all about you. We want to help you make the right coverage choices.

Advertiser Disclosure: We strive to help you make confident car insurance decisions. Comparison shopping should be easy. We are not affiliated with any one car insurance company and cannot guarantee quotes from any single company.

Our partnerships don’t influence our content. Our opinions are our own. To compare quotes from top car companies please enter your ZIP code above to use the free quote tool. The more quotes you compare, the more chances to save.

Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.

UPDATED: May 5, 2024

Advertiser Disclosure

It’s all about you. We want to help you make the right coverage choices.

Advertiser Disclosure: We strive to help you make confident car insurance decisions. Comparison shopping should be easy. We are not affiliated with any one car insurance company and cannot guarantee quotes from any single company.

Our partnerships don’t influence our content. Our opinions are our own. To compare quotes from top car companies please enter your ZIP code above to use the free quote tool. The more quotes you compare, the more chances to save.

Here's what you need to know...

You probably already know that you need insurance when you buy a new car, but you may be asking how much car insurance do I need for a new car. The amount of insurance you need can be confusing, especially if you’re unfamiliar with the types of car insurance coverage available for purchase.

There are several factors to consider when you need insurance. For example, nearly every state has a minimum liability requirement. Some states also require uninsured motorist or personal injury protection insurance. You’ll also likely need more insurance on a financed car.

You can learn more about your coverage options below, including what you’ll need before you can legally drive. 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Table of Contents

Minimum Car Insurance Requirements by State

When you’re in the market for car insurance, the first thing you should look is minimum car insurance required by state. Besides Virginia and New Hampshire, every state requires at least liability auto insurance coverage before driving or registering a car. Check below to see how much insurance you need in your state.

Car Insurance Liability Requirements by State StateMinimum Liability Requirements Alabama25/50/25 Alaska50/100/25 Arizona15/30/10 Arkansas25/50/25 California15/30/5 Colorado25/50/15 Connecticut25/50/20 Deleware25/50/10 District of Columbia25/50/10 Florida10/20/10 Georgia25/50/25 Hawaii20/40/10 Idaho25/50/15 Illinois25/50/20 Indiana25/50/25 Iowa20/40/15 Kansas25/50/25 Kentucky25/50/25 Lousiana15/30/25 Maine50/100/25 Maryland30/60/15 Massachusetts20/40/5 Michigan20/40/10 Minnesota30/60/10 Mississippi25/50/25 Missouri25/50/25 Montana25/50/20 Nebraska25/50/25 Nevada25/50/20 New Hampshire25/50/25 New Jersey15/30/5 New Mexico25/50/10 New York25/50/10 North Carolina30/60/25 North Dakota25/50/25 Ohio25/50/25 Oklahoma25/50/25 Oregon25/50/20 Pennsylvania15/30/5 Rhode Island25/50/25 South Carolina25/50/25 South Dakota25/50/25 Tennessee25/50/15 Texas30/60/25 Utah25/65/15 Vermont25/50/10 Virginia25/50/20 Washington25/50/10 West Virginia25/50/25 Wisconsin25/50/10 Wyoming25/50/20

Read more: Compare Wyoming Car Insurance Rates

When shopping for coverage, you’ll need to meet at least the minimum coverage car insurance requirements for your new vehicle. The good news is that minimum insurance is affordable and your cheapest option. (For more information, read our “Pros and Cons of Cheap Car Insurance Companies“).

Consequences if You Drive Without Car Insurance

Driving without insurance in a state requiring it can have disastrous consequences. There are two types of insurance violations: being unable to prove coverage and driving without it. You’ll face much lighter consequences if you have insurance but can’t prove it.

Deciding to get behind the wheel of your car without insurance can result in the following penalties:

The specific consequences of driving without insurance vary by state, but most drivers must pay a fine, face license suspension, and SR-22 forms.

Read more: Compare SR-50 Car Insurance: Rates, Discounts, & Requirements 

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Buying More Than Minimum Car Insurance

While many drivers benefit from buying more than minimum insurance, it’s not always necessary. A good way to tell if full coverage is worth the price is to consider your deductible cost compared to your car’s value.

For example, paying for full coverage might not make sense if your car is worth $2,000 and your deductible is $1,000. Learn more about the best full coverage car insurance.

However, most drivers benefit from more coverage. To get an idea of what types of car insurance for a new car might be right for you, consider the following coverage types.

Types of Car Insurance to Buy For New Cars

Minimum insurance isn’t always enough. Drivers with a car loan or lease usually must get full coverage, which includes the following:

Full coverage offers valuable protection for your car, but it’s not the best fit for everyone. For example, if your vehicle is older or less valuable and you own it outright, you can probably skip full coverage insurance.

Additional Car Insurance Options

Aside from the standard car insurance options, you can purchase other add-on coverages to increase your policy’s value. Some of the most popular options include:

Most major insurance companies offer these add-ons and several others to increase your car’s protection. However, be cautious about adding coverage to your policy — add-ons can significantly increase your insurance rates.

Read more:

Cost of Car Insurance

Insurance companies look at various factors to determine your rates, including your age, location, driving history, credit score, and car type. However, you can get an idea of how much you might pay by looking at the average insurance cost in your state.

Annual Full Coverage Auto Insurance Rates for 65-Year-Old Drivers Age and GenderAllstateGeicoLiberty MutualNationwideProgressiveState FarmNational Average 65 Y/O Male w/a Clean Record$1,878 $941$2,022 $1,347 $1,234 $1,010 $1,381 65 Y/O Female w/a Clean Record$1,900 $938$1,991 $1,327 $1,312 $1,010 $1,383

As you can see, there are some significant differences between states. Some states have higher insurance rates due to extreme weather risks, while others have higher coverage requirements.

Regardless of how much average insurance costs are in your state, there are plenty of ways to save. If you’re trying to stay on a budget, compare car insurance quotes, take advantage of discounts, and choose the right deductible.

Deductible Amounts

When filing a car insurance claim, your deductible is the amount you need to pay before your insurance kicks in. Your liability insurance doesn’t include a deductible, but most other types of coverage have one.

When you sign up for a policy, your insurer will ask you to choose a deductible. Most companies offer deductibles between $100 and $2,000. If you choose a higher deductible, your monthly rates will be lower. However, you’ll run the financial risk of paying more if you need to file a claim.

Find the Right Car Insurance Today

Finding the right amount of car insurance might seem confusing, but it doesn’t have to be difficult. If you need more information about your coverage options, an insurance representative can help.

Once you know how much insurance you need, your next step should be comparing quotes. By looking at as many companies as possible, you’ll be able to find the best policy for your needs.

Read More:

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Case Studies: Determining Car Insurance Coverage for a New Car

Case Study 1: State Minimum Coverage

John purchased a new car and wants to meet the state’s minimum car insurance requirements. In his jurisdiction, the state mandates a minimum liability coverage of $25,000 for bodily injury per person, $50,000 for bodily injury per accident, and $10,000 for property damage. John opts for the state minimum coverage to fulfill the legal requirements.

Case Study 2: Comprehensive Coverage With Collision Insurance

Sarah values the protection of her new car and wants coverage that extends beyond the basic liability insurance. She chooses to add comprehensive coverage and collision insurance to her policy. This ensures that her car is protected against damages caused by events such as theft, vandalism, natural disasters, and accidents.

Case Study 3: Full Coverage With Higher Limits

Mike wants extensive coverage to safeguard his new car and provide additional peace of mind. He selects full coverage, which includes liability insurance, comprehensive coverage, and collision insurance. Moreover, Mike decides to increase the liability limits beyond the state minimums to ensure adequate protection in case of an accident involving substantial damages.

Case Study 4: Optional Coverages for Enhanced Protection

Samantha decides to enhance her coverage beyond the standard options. She adds optional coverages such as uninsured/underinsured motorist coverage, personal injury protection, and roadside assistance. Samantha prioritizes comprehensive protection for her new car and personal well-being.

The Final Word on Necessary Car Insurance Coverages for New Cars

If you have a new car, you will have to at least carry your state’s required minimums. If your new car is under lease, then you will need to carry more coverage to meet your lender’s requirements.

Now that you know the answer to how much car insurance coverage do I need for a new car, it’s time to start comparing rates to get the best deal. You can use our free quote comparison tool to compare new car insurance quotes from companies in your area.

Frequently Asked Questions

How much car insurance coverage do I need for a new car?

How much car insurance coverage do I need for a new car?

The amount of car insurance coverage you need for a new car depends on several factors, including your state’s legal requirements, your financial situation, and your individual needs. It is generally recommended to have sufficient coverage to protect your new car from potential risks and liabilities.

What factors should I consider when determining the coverage amount for my new car?

What factors should I consider when determining the coverage amount for my new car?

When determining the coverage amount for your new car, consider the following factors:

Are there any legal requirements for car insurance coverage?

Are there any legal requirements for car insurance coverage?

Yes, there are legal requirements for car insurance coverage that vary by state. Most states require a minimum level of liability coverage to cover injuries or damages you may cause to others in an accident. It is important to check your state’s specific requirements.

What are the different types of car insurance coverage available?

What are the different types of car insurance coverage available?

The different types of car insurance coverage include:

What are the pros and cons of having higher coverage limits for a new car?

What are the pros and cons of having higher coverage limits for a new car?

Pros of having higher coverage limits:

Do new cars cost more to insure?

Do new cars cost more to insure?

Yes, new cars will cost more to insure because their overall replacement value is higher than an older car.

Why do newer cars cost more to insure?

Why do newer cars cost more to insure?

New cars cost more to insure because their overall value is greater than older cars. If you crash your new car, your insurance company will have to pay out more in a claim to repair or replace your car. Therefore, insurance companies charge more to offset this financial risk.

Free Car Insurance Comparison

Enter your ZIP code below to view companies that have cheap car insurance rates.

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Written by:

Scott W. Johnson

Licensed Insurance Agent

Scott W Johnson is an independent insurance agent in California. Principal Broker and founder of Marindependent Insurance Services, Scott brings over 25 years of experience to his clients. His Five President’s Council awards prove he uses all he learned at Avocet, Sprint Nextel, and Farmers Insurance to the benefit of his clients. Scott quickly grasped the unique insurance requirements of his...

Licensed Insurance Agent

Reviewed by:

Jeffrey Manola

Licensed Insurance Agent

Jeffrey Manola is an experienced insurance agent who founded TopQuoteLifeInsurance.com and NoMedicalExamQuotes.com. His mission when creating these sites was to provide online consumers searching for insurance with the most affordable rates available. Not only does he strive to provide consumers with the best prices for insurance coverage, but he also wants those on the market for insurance to ...

Licensed Insurance Agent

Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.

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