Almost all states require liability insurance in case you hit someone.Find out your state's requirements. (You might want to buy more than just the minimum requirements to make sure you have enough coverage to protect your financial security)

You'll want enough coverage to make sure your assets (bank accounts, home) aren't in danger if a claim is made against you. For example, if you have $50,000 bodily injury coverage, and the person you hit has hospital expenses of $80,000, you'll need to come up with $30,000.

The deductible that you choose should be based on your situation and your needs. The bigger your deductible, the lower your insurance rates will be. So if you want to save money, and you are a safe driver who doesn't get into accidents, you will probably want to set your deductible high.

Some insurance agents recommend having a deductible of at least $500. But remember, if you're in an accident, you will need to pay the amount of your deductible, before your insurance will pay anything. So you need to be able to come up with that amount of money.