The limits we recommend, and why minimums are not enough
Liability limits are written as three numbers, for example 100/300/100. That is $100,000 in bodily injury per person, $300,000 per accident, and $100,000 in property damage. When the damage exceeds your limits, the shortfall is a personal debt, collectible against wages and assets in most states.
| Coverage | What it pays | What to carry |
|---|---|---|
| Bodily injury liability | Other people’s medical bills, lost wages and pain and suffering when you are at fault. | 100/300 at minimum; 250/500 if you have meaningful assets or income |
| Property damage liability | Their vehicle and any property you damage. | $100,000. Average new-vehicle prices make $25,000 minimums inadequate |
| Uninsured/underinsured motorist | Your injuries when the at-fault driver has no coverage or too little. | Match your bodily injury limits; carriers must offer it in most states |
| Collision | Your vehicle after a crash regardless of fault, minus your deductible. | Keep while the car is worth more than roughly $4,000; $500 or $1,000 deductible |
| Comprehensive | Theft, hail, flood, fire, vandalism and animal strikes. | Keep alongside collision; often only $10 to $20 a month |
| Medical payments or PIP | Your own medical bills and, with PIP, sometimes lost wages, regardless of fault. | Required in no-fault states; elsewhere $5,000 to $10,000 is cheap coverage |
Two coverages people skip and regret. Uninsured motorist protection is the one that pays when someone with a minimum policy or no policy at all injures you, which is a meaningful share of drivers in many states. And gap or loan-lease payoff coverage matters any time you owe more than the car is worth, since collision pays actual cash value, not your loan balance.
An umbrella policy is usually the cheapest liability you can buy. Once your auto limits reach 250/500, $1 million of personal umbrella coverage commonly runs $200 to $400 a year and extends over both your auto and home policies. See umbrella insurance for the qualifying limits carriers require underneath.
For a walk-through of how to size limits against your own assets, read how much car insurance do I need.
Nine ways to cut the bill that actually work
Discount lists are long and mostly small. These are the ones with real dollars behind them:
- Shop at every renewal, not every five years. Carriers re-tier existing customers slowly and price new business aggressively. The same profile can differ 30% or more between two admitted carriers in the same state.
- Bundle home or renters with auto. Multi-policy discounts commonly run 10% to 25% on the auto side, and renters insurance often costs less than the discount it unlocks.
- Raise your collision and comprehensive deductible. Going from $500 to $1,000 typically saves 8% to 15% of that portion. Only do it if you can absorb the deductible in cash.
- Drop collision on an old car. When annual collision and comprehensive premium exceeds about 10% of the car’s actual cash value, the coverage stops making sense.
- Try telematics for one term. Low-mileage, smooth drivers commonly earn 10% to 30%. Check whether the program can raise your rate before you enroll.
- Fix the mileage on file. Remote work has cut commutes for millions of drivers and carriers do not update it for you.
- Claim the student and defensive-driving discounts. Good-student discounts for teens are among the largest single credits on a policy, and many states mandate a discount for approved defensive-driving courses.
- Pay in full and go paperless. Installment fees plus a paid-in-full credit are frequently worth 5% to 10% combined.
- Never let coverage lapse. A lapse costs more in lost discounts and tier placement than the month of premium you skipped.
What does not work: chasing an advertised rate that turns out to carry state minimum limits, or buying from a carrier with a poor claims reputation to save $8 a month. Our guide to lowering your car insurance premium covers the negotiation sequence in detail, including how to request a re-rate after a violation ages off your record.
SR-22s, lapses and getting back to standard rates
An SR-22 is a certificate of financial responsibility, not a type of insurance. Your carrier files it with the state to confirm you are carrying at least the required liability limits, and it notifies the state automatically if your policy cancels or lapses.
Rules are state-specific. In Texas, the Department of Public Safety requires an SR-22 after a suspension from a crash, a second or subsequent conviction for driving without liability insurance, or a civil judgment, and the filing must be maintained for two years from the conviction or judgment date, with a $100 reinstatement fee before a license is reissued. Other states commonly require three years. A non-owner SR-22 policy is available if you do not own a vehicle but still need to satisfy the requirement.
The filing itself is cheap, usually $15 to $25. The expensive part is the underlying rate, because the event that triggered the filing also moves you to a nonstandard tier. Three things shorten that period:
- Keep the policy continuously in force. A single cancellation restarts the clock and can re-suspend your license.
- Ask for a re-quote at each renewal and again at the three-year and five-year marks, when most violations stop surcharging.
- Take an approved defensive-driving course if your state allows a point reduction, then have your carrier re-rate the policy.
Our SR-22 guide covers filing timelines, non-owner policies and what happens if a payment is missed. We place these filings routinely, including for drivers who were nonrenewed by their previous insurer.
Sources & further reading
- NAIC — 2023 Auto Insurance Database, average premium and expenditure tables
- NAIC — 2022/2023 Auto Insurance Database Report release
- Insurance Information Institute — Facts + Statistics: Auto insurance
- Texas Department of Insurance — Auto insurance guide
- Texas Department of Public Safety — Financial Responsibility Insurance Certificate (SR-22)