Buying the legal minimum is the cheapest option — and often the riskiest. The right amount of car insurance is not the lowest number that keeps you legal; it is the amount that protects what you actually own. Here is how to think it through.
Every state sets a minimum amount of liability insurance drivers must carry. Buying exactly that minimum is the cheapest way to be legal — and that is the only thing it guarantees. State minimums were not designed to fully cover a serious accident; they were designed as a floor.
The gap matters because liability claims can be large. A single accident that injures someone or damages an expensive vehicle can produce costs well beyond a minimum limit. When a covered claim exceeds your limit, the insurer pays up to that limit and the rest can become your personal responsibility — potentially your savings, your wages, or other assets.
So the real question is not “what is the least I can buy?” but “how much do I have to lose, and what would it take to protect it?” Insurance is state-licensed, so the minimums and the options differ by state — a licensed RMO agent can explain what is available where you live.
There is no single right amount of coverage. The amount that fits you depends mostly on three things:
Notice that two of these protect other people and your assets (liability) and one protects your car (collision and comprehensive). They are separate decisions and should be made separately.
Once you know what you are protecting, the choices become clearer:
There is no formula that fits everyone. A licensed RMO agent can walk through your assets, your vehicle, and your lender’s requirements, explain the limits available in your state, and help set coverage that genuinely matches your situation — with your policy managed in your MyRMO account. For pricing, request a quote.
It is legal, but it is often not enough. State minimum liability limits are set low and can be used up quickly by a single serious accident with injuries or an expensive vehicle. If a claim exceeds your limits, you can be personally responsible for the rest. Minimum coverage keeps you legal; it does not necessarily protect your assets.
Three things mainly drive the decision: the assets and income you could lose in a lawsuit, the value and age of your car, and any requirements from a lender or leasing company. The more you have to protect and the more valuable your car, the more coverage generally makes sense. A licensed RMO agent can help match limits to your situation.
A common guideline is to set liability limits high enough to cover what you could realistically lose if you were sued after a serious at-fault accident — roughly your net worth and future income. Higher limits cost more, but the increase is often modest relative to the protection gained. A licensed RMO agent can explain the options available in your state.
While a car is financed or leased, you generally cannot drop them — the lender requires both. Once the car is paid off, it becomes a judgment call. As a car ages and its value falls, there is a point where the yearly cost of that coverage is high relative to the most it would ever pay out. A licensed RMO agent can help you weigh it, with your policy managed in your MyRMO account.
These guides help you turn the decision into a policy:
