Updated 2026-10-26
States set minimum liability limits as a legal floor. They do not reflect how much a serious crash can cost. Choosing your limits is a personal decision, and these questions can guide it.
What could you lose?
If a claim goes beyond your limits, the injured person can pursue you for the rest. Think about your savings, home equity, future wages and other assets. The more you have to protect, the more valuable higher limits become.
What do you drive and where?
Heavier traffic, long commutes and frequent highway driving increase exposure. So do young drivers in the household. A crash involving multiple people or expensive vehicles can quickly exceed minimum limits.
What does each step cost?
Ask for quotes at your state minimum, at a moderate level and at a higher level. Compare the added cost of each step with the added protection. Prices vary by insurer and driver, so the only reliable comparison is with your own quotes.
Match your other protection
Uninsured and underinsured motorist coverage is often offered at limits up to your liability limits. Raising liability may let you raise these too, which protects you if the other driver is underinsured.
Umbrella policies
If you have significant assets, an umbrella policy adds a larger layer of liability coverage over your auto and home policies. Umbrella insurers usually require certain underlying auto limits first.
Review regularly
Check your limits when you buy a home, get a raise, add a teen driver or change cars. The right limits change as your life does.
Writing your limits down, and the reasons you chose them, makes the next review faster.