How Much Auto Coverage Should I Consider?

Auto Insurance only provides coverage up to policy limits — beyond that, you're personally responsible for damages related to any accident you cause. This is a key consideration, especially if you have assets you want to protect.

Here are a few factors to consider — and some things to keep in mind — as you choose auto coverage limits:

Third-party liability coverage: Your assets and income

Third-party liability coverage pays damages you cause to others in a covered loss — up to the policy’s limits.  When selecting those limits, it’s important to know the value of assets you want to protect.  Add up the value of everything you own: your primary and vacation homes, savings and investments, cars and recreational vehicles, and any collectibles. Ideally, choose liability limits that are high enough to protect the total value of these assets. 

Comprehensive and collision coverage: The value of your vehicles

If your car were damaged or totaled, would you have the financial resources to pay the costs of repair or replacement out of your own pocket?  If not, consider taking out comprehensive and collision coverage. If you lease or finance your vehicle, your lender may require these coverages.

And here’s a quick overview of the various coverage types you can use to build a customized policy that works the way you want it to:


  • Covers the cost of injury to others and damage to their property when you’re at fault
  • Required by law in nearly all states


  • Pays to repair or replace your own vehicle when you’re at fault
  • Covers collisions with other vehicles, objects and animals


  • Covers damage to your car caused by things besides a collision
  • Includes hail, wind, theft, fire, vandalism, animal damage and more    

Uninsured / Underinsured Motorist

  • Covers your losses caused by an uninsured or underinsured driver 
  • Helps pay for damage to your car and bodily injury to you and your passengers 

Medical Payments

  • Helps with the cost of medical care for you and your passengers resulting from injuries in an accident
  • Provides this coverage no matter who’s at fault

Personal Injury Protection (PIP)

  • Helps cover the cost of your rehabilitation and lost wages resulting from an accident
  • Covers you no matter who’s at fault

Towing and roadside service

  • Provides 24/7 roadside assistance if your car is disabled
  • Helps pay for towing, tire changing, locksmith service and jumpstarts 

Rental Car Reimbursement

  • Covers the cost of a renting a car for up to 30 days while yours is repaired
  • Arrangements and billing can be handled by Farmers  


  • Helps protect drivers for rideshare companies like Uber and Lyft
  • Provides coverage during periods not covered by company or personal insurance

Loss of Use

  • Provides a flat sum for transportation while your car is repaired
  • Can be used for public transit, rentals, taxis and rideshare services   

Guaranteed Value™

  • Pays you a defined, agreed-upon value if your car is a total loss
  • Popular option for owners of classic and collector cars

Customized Equipment

  • Covers the cost to repair or replace aftermarket equipment like infotainment systems and custom wheels
  • Available on any vehicle with collision and comprehensive coverage

Personal Umbrella

  • Provides additional liability coverage — above the limits on your auto policy
  • Helps protect your assets from lawsuits

Glass Deductible Buyback

  • Covers windshield and glass repair and replacement
  • Low $100 deductible (the portion you pay yourself)

Full Windshield and Glass Coverage

  • Offers $0 deductible on glass repair and replacement
  • Pay nothing out of pocket

Spare Parts Coverage

  • Covers the cost to replace spare parts you keep on hand, up to $750
  • Popular choice for owners of classic and collector cars

Original Equipment Manufacturer (OEM)

  • Covers the cost of using factory-original parts in covered repairs 
  • Available on cars up to 10 years old

You might also hear the term Gap Insurance. This isn’t a coverage offered by Farmers — in fact, it’s most frequently sold by car dealers during the purchase process. What gap insurance covers is the difference between the amount you owe on your car and its value in the event of a total loss. It’s worth your consideration when you borrow more than a car is worth. 

Gil Weiss trains sales teams at dealerships for nearly every major automaker in North America.

We interviewed Weiss to seek out tips on how to negotiate with a car dealer to achieve maximum savings. 

Read the story: New Car Tactics that Could Save $100s (or $1,000s) on Your Next Deal