There are two correct answers:
First, you need enough insurance to drive legally.
Second, you need enough insurance to protect your life and your financial situation from turning into a living hell if you have a car accident or worse hit a pedestrian. This can be as easy as buying the minimum coverage mentioned above or it can be much more complicated depending on your situation.
If you own only the clothes on your back and a car on its last legs, you’re probably what is known as “judgment proof.” You may lose if someone decides to take you to court, but you have no real assets to take.
However, if you have savings or a home or a business or multiple home – in other words you have alot of assets then you are not “judgment proof”. In this case you want to get as much insurance as you can afford.
In the options below, the first two numbers refer, in thousands, to bodily injury liability, which pays the hospital bills of anyone you injure. The first number is the per-person limit, the second is the per-accident limit. The third number is the property damage liability limit, which would repair or replace the car or property anyone you hit.
If you have a significant net worth then you should seriously consider an umbrella policy. This covers liability above and beyond your other insurance policies. Popular amounts range between $1 million and $5 million. The cost of this type of policy is relatively cheap compared to what it would actually pay out.
Remember, how much auto insurance should I buy is a personal decision and just liability insurance will not repair your own car if you cause an accident. If you have any questions please call my office and we can go over your different options and pricing.