Mathew B. Sims is Editor-in-Chief and has authored, edited, and contributed to several books. He has been working in the insurance industry ensuring content is accurate for consumers who are searching for the best policies and rates. He has also been featured on sites like UpJourney.

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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 Reviews.com and Safeco. He reviews content, ensuring that exis...

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Reviewed by Daniel Walker
Licensed Auto Insurance Agent

UPDATED: Apr 13, 2020

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It’s all about you. We want to help you make the right coverage choices.

Advertiser Disclosure: We strive to help you make confident insurance decisions. Comparison shopping should be easy. We partner with top insurance providers. This doesn’t influence our content. Our opinions are our own.

Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.

Things to Remember...

  • Knowing the basics about car insurance can save you money
  • Several different factors affect your rate including age, gender, driving history, and credit score
  • There are six different types of auto insurance coverage

Finding the auto insurance policy isn’t as easy as it looks. Since many factors can affect the level of coverage you need, educating yourself about the insurance marketplace is a smart decision.

Below is a breakdown of auto insurance basics you should know:

Enter your zip code above to find the right insurance plan for you and your family today!

What is auto insurance?

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Auto insurance is protection. When you enter into a contract with an insurance company, they agree to protect you from financial losses resulting from an accident, in exchange for your payment of a premium.

Your policy will define what losses are covered, and the coverage limits.  Auto insurance provides coverage for property, medical expenses, and liability.

There are many different types of auto insurance that can buy to cover just the basics, all the way up to total comprehensive and collision coverage. It’s a good idea to educate yourself before making a final decision on which type of insurance is best for you.

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Choosing a Policy

If you watch any television or surf the Internet, you probably see ads for auto insurance companies every day. Some of them use cute, talking animals or perky sales girls. Some rely on catchy, rhyming jingles.

Others try to gain your business through deep-voiced, trustworthy-looking actors. Regardless of which type you like, the bottom is the same; you need affordable coverage.

When choosing an insurance company, the goal is to overlook the gimmicks and find real information that will help you make this important decision.

Buying auto insurance is not a one-size-fits-all solution. Just as everyone is different, so are their insurance needs. It’s a good idea to make a checklist of what you are looking for before you start your research.

How to Cancel Your Policy

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There are several reasons why you may want to cancel your auto insurance. Maybe you found a better rate with another company. After a few years, you finally paid off your car and are no longer required to carry insurance on it.

Or perhaps you’ve decided to be more environmentally responsible, and have sold your vehicle in favor of riding a bicycle.

Whatever your reason, there is a process for canceling your insurance that will ensure it’s done quickly and that things go smoothly.

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How to File a Claim

Filing an auto insurance claim is something no one ever wants to do. It means something bad has happened to your vehicle, and it now needs to be repaired or replaced.

An accident or theft is very upsetting and not knowing what to do afterward just adds to that stress.

Having a checklist, and keeping a copy in your glove box, will help you get through the process of filing a claim.

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Types of Auto Insurance Coverage

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A well-written auto insurance policy usually includes six types of coverage. They provide the broadest protection for the most common events for which you would file a claim.

In addition to those six basic types, several others apply to very specific events that may cause damage to your vehicle, or to specific needs you may have if you’re involved in an accident.

Auto Insurance FAQ

There are six types of auto insurance coverage. The most basic type is liability coverage. It protects you if you are at fault in an accident. Normally, you are only able to opt for liability only coverage when you own your vehicle outright.

If the vehicle is financed, the lender, the insurance company will most likely require you to have full coverage.

Below are the six most common types of auto insurance coverage:

  • Liability
  • Personal Injury Coverage
  • Comprehensive
  • Collision
  • Uninsured
  • Underinsured Motorist

Before making a final decision, weigh the pros and cons of each type of coverage. Decide which type best suits your particular situation.

Then, compare at least three quotes from different insurance companies to get a better idea of what each has to offer. You can get started now by entering your zip code below and using our FREE online comparison tool!

References:

  1. http://www.rmiia.org/auto/traffic_safety/Cost_of_crashes.asp
  2. https://www.progressive.com/glossary/comprehensive-and-collision/
  3. https://www.farmers.com/auto/coverage/
  4. https://www.nationwide.com/personal-injury-protection.jsp