How Much Car Insurance Do I Actually Need?

When it comes to insurance, the decisions you make today can impact your financial future in a big way. In a recent call to The Dave Ramsey Show, a listener named Dan asked for advice on auto insurance. What followed was a valuable breakdown of liability coverage, umbrella policies, and the critical difference between captive and independent agents. Let’s walk through some of the key takeaways.

Why High Liability Coverage is a Smart Move

Most people focus on getting the lowest premium possible, but according to Dave, the cheapest part of an auto insurance policy is actually the liability coverage. That’s the part that pays out if you cause injury or damage to others in an accident.

"I always recommend carrying high liability — like 500/300 coverage. The difference in cost is small, but the protection is huge." Here’s why it matters:

• Medical bills and legal expenses add up fast in serious accidents.
• Standard limits like 100/300 may not be enough if multiple people are hurt.
• You could be personally liable for any amount beyond your policy.

If you’ve built any kind of wealth — a home, savings, investments — you need that extra protection to avoid financial devastation.

Add an Umbrella Policy If You Have Assets

As your net worth grows, so should your coverage. If you have over $500,000 in assets or income, Dave recommends an umbrella liability policy. It kicks in on top of your auto and homeowners insurance to provide an extra $1 million or more in liability protection. And here’s the best part? It usually only costs a couple hundred dollars a year.

"Umbrella policies are one of the best values in insurance. You’re buying peace of mind for pennies on the dollar."

Whats the Difference Between Captive and Independent Agents?

This is where things get interesting — and where most people overpay without realizing it. Captive Agents These agents work for one insurance company (like State Farm or Allstate). They can only offer you products from that company, even if it’s not the best deal.

“They’re called ‘captive’ for a reason — they’re owned by the company.” **Independent Agents Independent agents, like those at Moore Insurance, work for you — not a corporation. They shop quotes across multiple top-rated carriers to get you the best coverage at the best price. “An independent agent works for you. A captive agent works for the insurance company.” You wouldn’t walk into one dealership and buy the first car you see. So why would you do that with insurance?

Big Brand ≠ Better Coverage

Dave put it bluntly: big-name insurance companies spend millions on marketing — think Super Bowl ads and celebrity spokespeople. That cost is baked into your premium. And just because a company is big doesn’t mean it’s the best at paying claims. Dave shared his own frustration trying to get claims paid by one of the largest providers.

“Just because you went to high school with the agent or saw them on TV doesn’t mean they’re offering the best deal.”

Final Thoughts

If you want to save money and get better protection, here’s Dave’s advice in a nutshell:

• Max out your liability coverage — it's one of the best deals in insurance.
• Add an umbrella policy if you have significant assets or income.
• Work with an independent insurance agent who shops the market on your behalf. At Moore Insurance, we believe in educating and empowering our clients. Our licensed team is here to make sure your policy fits your life — not just your budget.