Is there a formula I can use to determine how much liability coverage I need?

My car insurance policy is up for renewal, and I noticed it's a 15/30/50 liability policy. This seems far too low. How do I determine how much coverage I need?

Answer
“Generally speaking, the best way to figure your liability coverage is to do the following:
  • Take your net liabilities (debt) and subtract them from your assets
  • Then, take whatever you make in a year and multiply it by three
  • Add these two numbers together
So let’s say you add this all up and it’s $200,000. That’s the bare-minimum coverage you should get for your car insurance. Anything less and you’re playing with fire.”
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Eric Schad
Answered on May 04, 2021
Eric Schad has been a freelance writer for nearly a decade, as well as an SEO specialist and editor for the past five years. Before getting behind the keyboard, he worked in the finance and music industries (the perfect combo). With a wide array of professional and personal experiences, he’s developed a knack for tone and branding across many different verticals. Away from the computer, Schad is a blues guitar shredder, crazed sports fan, and always down for a spontaneous trip anywhere around the globe.
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