How much auto insurance should a homeowner have?

Increase the liability coverage on your auto insurance policy to protect yourself from lawsuits. Compare quotes to find hidden discounts up to 12% for homeowners.

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Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products including home, life, auto, and commercial and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, largely in the insuranc...

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Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years (BBB A+). He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like and Safeco. He reviews content, ensuring that ex...

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Reviewed by Daniel Walker
Licensed Auto Insurance Agent

UPDATED: Oct 28, 2021

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Here's what you need to know...

  • Homeowners need both homeowner’s and auto insurance coverage
  • Most states require that you carry a minimum amount of liability insurance
  • Homeowners  need to determine the value of the belonging before purchasing insurance

If you’re a homeowner, knowing how much auto insurance you should have is vital to protecting your assets if you’re ever involved in a car accident.

Unfortunately, most homeowners don’t carry as much auto insurance as they really should, expecting that they’ll never have a serious accident.

Every state in the Union, but one, requires drivers to carry a minimum amount of liability insurance, either through a licensed insurance company or by means of self-insurance.

But those minimum amounts are usually so low as to be meaningless in today’s litigation-happy culture.

For example, if your state auto insurance minimum for bodily injury is $50,000 per accident, and you end up being sued for $5 million, your insurance company will only be paying 1 percent of the judgment if you lose. Where will the rest of the money come from?

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Can my house be taken in a lawsuit?

The question of whether or not your house can be seized to pay an injury award is the crux of this discussion about how much auto insurance homeowners should carry.

Some states, like Florida and Texas, will not allow the courts to seize someone’s primary residence for this purpose.

In states like these, you don’t have to worry about protecting your home as an asset. Unfortunately, most states don’t provide that type of protection.

Using that same $5 million example, if you could not come up with the money your house could be seized and sold in any state where it’s not protected.

Not only that, any of your assets – your cars, boats, investments, etc. – are as vulnerable to seizure as your home is.

You need to carry enough liability insurance to cover the replacement cost of all your assets if you want the maximum protection against jury awards.

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So how do I calculate how much auto insurance I need?

Documenting how much auto insurance homeowners should have is a simple mathematical equation. The hardest part is to honestly take stock of what your valuable assets are.

But once you have a list, you simply add up their value to determine how much insurance coverage you need. You will consider things like:

  • Cars
  • Boats
  • RVs
  • Vacation property
  • Antiques and collectibles
  • Precious metals
  • Investments


Obviously, some of your assets will need to be appraised before you can fix an insurance value to them. Appraisals for most items can be had rather inexpensively so it’s well worth your while.

While you’re at it, you can also insure any individual assets against fire, theft, and such by way of your homeowner policy.

On the other hand, your investments will hopefully be increasing in value as the weeks and months go by, so you may have to periodically increase your auto insurance to cover them.

Is there any other way to protect myself other than increased auto insurance?

There is another way to protect the case of your assets of a personal injury lawsuit. It’s called an umbrella policy. The umbrella policy is simply a catch-all insurance policy to cover anything not addressed by any of your other insurance policies.

Now, before you assume that the umbrella policy is a golden goose, it’s not. It does come with some restrictions and stipulations which may make it not worthwhile in your case.

One of the big ones is the fact that an umbrella policy will not kick in until all of your other insurances have been exhausted. While that may not seem like such a big deal, realize that the premiums for all of your different policies will most likely go up substantially if a claim against you reaches the maximum benefit.

Will all of those premium increases be less money combined than you would pay for a higher-value auto insurance policy? If so, the umbrella policy is the way to go. If not, it may be more cost-effective to simply increase your auto coverage.

Regardless of how you look at it, the minimum liability amounts on a standard auto policy are insufficient for anyone with any real, tangible assets.

When personal injury claims can reach into the millions, and medical expenses can be equally high, you’re just asking for a financial disaster by not carrying enough insurance. Speak to your agent today to find out how much you really need it.

While you’re thinking about, now is the time to begin searching for auto insurance quotes by entering your zip code below!



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