How Much Auto Insurance Do I Need? 
A Personal Auto Policy -LRB- PAP -RRB- generally comes with five coverages included in the premium . 1 . Auto Liability ... protects you from claims other people make against you arising from auto accidents 2 . Uninsured/Underinsured Motorists Liability -LRB- UIM -RRB- ... protects you for claims you make against other drivers who do not have insurance or do not have enough insurance 3 . Medical Payments ... pays money to doctors and hospitals for your medical expenses arising out of auto accidents 4 . Collision ... pays for damage to your car arising out of auto accidents where you collide with another car or object , like a tree . 5 . Comprehensive ... pays for damage to your car arising out accidents that are other than collision , for example , flood , fire and theft . When you ask , `` How Much Auto Insurance Do I Need ? '' , I 'm assuming you mean # 1 , Auto Liability so I 'll limit my answer to that coverage . In subsequent postings , I 'll answer how much you need for the other coverages . So , how much Auto Liability Insurance do you need ? It depends . If you just want to get on the road and be legal about it , in New Jersey , the minimum limit of insurance is $ 35,000 for each accident . You are also required to purchase Uninsured/Underinsured Motorists Liability and Medical Payments and they also have minimum limit requirements . Other states have similar minimum limit requirements and they are spelled out at each state 's insurance department website . Minimum limit policies will get you on the road , but they are not a smart use of your dollars . Consider an auto accident where you strike a Lawyer 's Mercedes ... his new Mercedes . Think $ 35,000 will take care of everything ? I would n't bet on it . And if $ 35,000 is not enough , you 'll pay personally for a long time . Now , if your primary goal is adequate protection for you , your family and your assets , you need to take a step back . Liability claims against you arising out of the use of an auto is one area you should be concerned about . You should also be concerned about liability claims arising out of owning a home , operating a boat or a motorcycle or an RV . Liability claims can also arise from owning vacation property . You can trigger a claim . Your spouse can trigger a claim and your children can trigger a claim . Considering all the people in your life who can trigger a claim and all the ways they can do it , How much is enough liability insurance ? How much should you buy ? Answer : I do n't know . But I do know EVERY smart insurance consumer , concerned about `` how much insurance is enough ? '' should purchase a $ 1 million Personal Umbrella Policy . A Personal Umbrella Policy is a secondary policy . Your auto policy , homeowner policy , boat policy , and so on are all primary policies . Each primary policy has its own limit of insurance . In the event of an accident -LRB- in the home , in the car or on the water -RRB- , you have a primary policy to protect you . If the amount of primary insurance is not enough to pay a claim , the Personal Umbrella policy adds a million dollar cushion . Is a Personal Umbrella policy expensive ? No . A million dollar umbrella GENERALLY starts around $ 125 . That 's $ 125 for $ 1,000,000 of liability protection you can use over your auto insurance or your homeowner insurance or your boat insurance and so on and so on . If there is a better deal in the insurance business , I 'm not aware of it . Now if you 're sold on the idea that a Personal Umbrella Policy has merit , we need to return to your original question : `` How much Auto Liability Insurance do I need ? '' You need an amount of insurance that satisfies the minimum requirements of the Personal Umbrella Policy . For example , if your Personal Umbrella Policy requires you have a $ 300,000 Personal Auto Liability Limit , that 's what you need to buy for your auto policy . If the requirement is $ 300,000 and you have $ 250,000 , there will be a $ 50,000 gap in the event of a serious claim . Again , for example , you 're responsible for a serious auto accident . It ends up costing $ 600,000 . Your auto policy will pay $ 250,000 , you 'll have to pay $ 50,000 and then the umbrella will pay the remaining $ 300,000 . So you can see , you need to buy the correct amount of auto and home insurance and the correct amount for any other primary policy so you do n't have a gap in coverage . Can you buy a Personal Umbrella Policy with a limit higher than $ 1 million ? You can , but the higher the limit , the greater the scrutiny . I hope I 've answered your question , but if I have n't , feel free to call , fax or email me . 