How Much Car Insurance Does Dave Ramsey Recommend?
Last Updated on February 16, 2026
Dave Ramsey’s general car insurance recommendation is to carry enough coverage to protect you from a financially devastating accident—not to insure every small scratch. In practice, that usually means meeting your state’s legal minimums, carrying strong liability limits, and choosing deductibles you can comfortably pay from savings.
Ramsey often frames insurance as a backstop for worst-case scenarios: a minor dent is inconvenient, but injuries and major property damage can create bills that are life-changing. That mindset drives his approach to liability limits, deductibles, and when to file claims.
For Ramsey’s current guidance straight from the source, see his car insurance recommendation, which outlines his preferred liability targets and deductible strategy.
- Ramsey’s Goal Is “Devastation Protection”: The focus is on coverage that prevents a financial catastrophe, not paying for every minor inconvenience.
- Strong Liability Limits Matter Most: State minimums can be too low for modern medical costs and expensive vehicle repairs, so higher limits help protect assets and income.
- Deductibles Should Match Your Cash Savings: A higher deductible can lower premiums, but only makes sense if you can easily pay it without creating new debt.
- Save Claims for Big Losses: Frequent small claims can raise rates and reduce options later, so many drivers pay minor repairs out of pocket and claim only when necessary.
Auto Insurance Coverage Minimums
At a minimum, Ramsey emphasizes complying with your state’s required auto insurance. In most states, that includes liability car insurance, which pays for other people’s injuries and property damage when you cause a crash.
Some states also require additional coverages. Two common examples are uninsured motorist coverage and personal injury protection. Requirements vary, so it’s important to confirm what your state mandates before shopping for quotes.
Liability coverage is typically shown as three numbers (like 25/50/25 or 100/300/100). Those numbers represent limits for bodily injury per person, bodily injury per accident, and property damage per accident.
| Example Limits | What It Means | Why It Matters |
|---|---|---|
| 25/50/25 | $25,000 per person (injury) / $50,000 per accident (injury total) / $25,000 per accident (property) | Often close to state minimums and may be too low for serious injury claims or expensive vehicles. |
| 100/300/100 | $100,000 per person / $300,000 per accident / $100,000 property damage | Provides a larger cushion against lawsuits and high medical bills. |
| 250/500/250 | $250,000 per person / $500,000 per accident / $250,000 property damage | Commonly referenced as a “high liability” target in Ramsey-style advice. |
Dave Ramsey “Fit Checker”
See how your current coverage aligns with the Ramsey philosophy of protecting assets from financial devastation.
Dave recommends carrying a minimum of $500,000 in total liability (100/400/100 split or $500k single limit) to protect your income from lawsuits.
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Liability Coverage: The Core Protection
Liability coverage protects your finances when you’re legally responsible for a crash. It typically includes:
- Bodily injury liability to help pay for medical bills, lost income, and legal costs for people you injure
- Property damage liability to help pay for repairs or replacement when you damage someone else’s vehicle or property
Liability coverage does not pay for your own vehicle damage or your own injuries. To protect your own car, you generally need collision coverage and (depending on the risks you want covered) additional options like medical payments coverage.
Learn Auto Insurance Basics
Ramsey’s advice is easier to apply when you understand two key terms:
- Premium: The price you pay for insurance. Many insurers allow you to pay in different billing cycles, which can affect budgeting (and sometimes fees).
- Deductible: The amount you pay out of pocket before certain coverages (like comprehensive or collision) pay. This overview of car insurance deductibles explains how they work and why the number matters.
In general, higher deductibles can reduce premiums because you’re taking on more small-to-medium risk yourself. Ramsey’s content frequently points to a $1,000 deductible as a common target—as long as you can easily cover it with cash savings.
He ties that to his starter emergency fund approach: if you’re keeping a basic cash buffer, a higher deductible is less likely to create financial stress. (This is also why he discourages filing claims for minor repairs.)
For emergency fund decision-making in Ramsey’s framework, see his article on when to use your emergency fund.
Quick tip: If you raise your deductible, compare quotes both ways and make sure the premium savings are meaningful. A small discount may not be worth taking on much more out-of-pocket risk.
Filing Auto Insurance Claims
One consistent theme in Ramsey’s advice: avoid using insurance as a maintenance plan. When you file claims frequently—especially for minor damage—it can affect your rates at renewal, and in some situations it can even affect eligibility with a carrier. This is why many drivers ask about how many claims per year is “too many.”
For example, if you’re involved in a small fender bender and the repair is close to (or below) your deductible, filing a claim often provides little benefit and can create downside risk later.
When a claim is necessary—major damage, injuries, liability exposure—proper documentation and timing matter. This guide on the proper way to file an insurance claim after an accident walks through the basic steps that help avoid delays and disputes.
More Ways to Save Without Cutting Protection
If your rates feel high, Ramsey-style strategy focuses on keeping strong liability while looking for savings that don’t leave you exposed. Common approaches include:
- Choose a higher deductible you can comfortably pay: A higher deductible can lower premiums, but it means you may be paying out of pocket for smaller losses—like a cracked windshield.
- Use approved education discounts if they apply: Many carriers offer discounts for completing a defensive driving class, though eligibility and savings vary by insurer and state.
- Protect your driving record: Avoiding risky situations (driving while tired, driving recklessly, or driving intoxicated) is one of the most reliable ways to reduce long-term insurance costs.
Bottom line: Ramsey’s car insurance guidance is less about finding the “cheapest” policy and more about balancing protection and preparedness—high enough coverage to prevent financial devastation, plus enough savings to handle smaller inconveniences without leaning on claims.
