A robust benchmark for auto liability coverage is the 100/300 policy—$100,000 per person and $300,000 per accident. This is widely recommended by insurance professionals as a minimum for financially stable drivers, moving beyond outdated state minimums that often fall short of covering actual accident costs.
To determine what’s “good,” you must align coverage with your personal financial risk. The core purpose of liability insurance is to protect your assets—savings, home, future income—if you're found at fault in a serious accident. Industry data consistently shows that medical and legal costs from severe crashes can easily exceed $100,000 per injured person. Relying on low state minimums, which can be as low as $25,000 in some areas, leaves you personally responsible for any amount over your policy limit.
The 100/300 level is considered a prudent baseline because it addresses this gap. It provides a substantially higher cushion than minimum policies for a relatively modest increase in premium. According to guidance from organizations like the Insurance Information Institute, this level is a sensible step for drivers with assets to protect. For context, a policy with 250/500 limits offers even stronger protection, often for only a 10-15% higher premium than the 100/300 level.
Consider this realistic scenario: You cause an accident involving two other vehicles. One driver has $85,000 in medical bills, another has $110,000, and both sue for additional damages like lost wages and pain and suffering. A 100/300 policy would cover the full $85,000 for the first driver and $110,000 for the second (within the per-person limit), totaling $195,000 of the $300,000 accident limit. If you only carried a 25/50 state minimum, you would be responsible for the hundreds of thousands in excess costs.
Your asset level is the ultimate guide. A common rule of thumb is that your liability coverage should at least match your net worth. The table below illustrates how coverage needs align with different financial situations:
| Driver Profile & Approx. Net Worth | Recommended Minimum Liability | Key Reasoning |
|---|
| Young driver, few assets | State Minimum (e.g., 25/50) | Meets legal requirement; premiums are a primary concern. |
| Typical homeowner, steady career (Net Worth: $100k - $500k) | 100/300 (strongly consider 250/500) | Aligns with asset value; protects home equity and savings from a lawsuit. |
| High net worth individual (Net Worth: $1M+) | 250/500 or 500/500, plus an Umbrella Policy | Base auto policy must be high enough to qualify for umbrella coverage, which extends protection to $1 million or more. |
Ultimately, “good” coverage is what prevents a car accident from becoming a financial catastrophe. Consulting with an independent agent who can quote different levels is the best way to see the cost-to-benefit ratio for your specific situation.
