Do auto owners need to worry about insurance coverage?

Most states require car owners to have auto insurance coverage. You could save up to 25% with a good driver discount from most auto insurers.

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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...

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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...

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Reviewed byDaniel Walker
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UPDATED: Apr 27, 2020

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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...
  • Each state issues its own laws regarding the amount of coverage each driver is required to carry
  • Know the different types of auto insurance including the minimum limits required for each type
  • Find out the ways to save on auto insurance by cutting unnecessary car insurance coverages

Auto insurance is intended to protect drivers in the event of an accident.

Your auto insurance coverage will help you pay for damages and injuries caused by your driving.

Therefore, it is important to ensure you have all of the coverage you need. Not all auto insurance policies are created equally. It is up to you to ensure that you have everything you need without purchasing too much coverage.

Check your state’s specific laws when you seek insurance quotes to ensure you will receive the coverage required by law.

These laws typically spell out which types of auto insurance you must cover, as well as the minimum car coverage amounts for each type.

Save on your auto insurance policy with our FREE comparison tool! Just enter your ZIP to find car insurance rates now!

Types of Auto Insurance

 

No two auto insurance policies are created equal. Most policies are a combination of several different types.

Each type fulfills a different area of coverage related to your automobile.

The main types of auto insurance available include:

  • Bodily Injury Liability – Covers the medical expenses of those injured in an accident that you caused up to a specific dollar amount per person with a total cap for each individual accident.
  • Property Damage Liability – Pays for damage to property, such as vehicles and buildings, in an accident in which you were at fault. Like the bodily injury insurance, your policy will cover up to a specific amount for each accident.
  • Uninsured and Underinsured Motorist – Provides you with coverage when someone else is at fault and either doesn’t have insurance or doesn’t have enough.
  • Collision – Pays to repair the damages to your car but has limitations of only paying as much as your vehicle is worth at the time of the accident.
  • Comprehensive – Protects you in case your vehicle is stolen or damaged in some way other than in an accident, such as during a severe storm.

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Choosing Coverage

When it comes to choosing your coverage, you need to compare policies very carefully. Pay attention to what exactly is included in each policy when you compare prices.

When you gather quotes from more than one company, it is easy to simply look at the total cost and make your decision based on that alone.

However, you must pay attention to the amounts and types of coverages included when you purchase a policy.

If you don’t, you may find yourself without enough coverage when you need it the most.

Cutting Corners

 

With insurance policies, you typically don’t want to cut corners. Cutting corners on your auto insurance policy can end up costing you more money in the long run if you become involved in an accident or your vehicle is damaged.

However, there are areas of your car insurance where you can cut back some without having a significant negative impact on your coverage.

Liability insurance isn’t an area you want to cut back on because it involves paying others. However, if you drive a beat up old car, you may consider reducing your comprehensive or collision coverage since it won’t pay out much anyways.

Another way you can reduce your auto insurance coverage is by evaluating your other policies.

For instance, if you have a good health insurance plan and disability coverage that will cover lost wages if you are injured, you may be able to cut back on your auto insurance coverage that would pay for your medical bills and lost wages.

For some people, paying for auto insurance can feel like a waste of money, especially if you are a good driver. However, not everyone is a good driver and anytime you venture out in a car, you can become involved in an accident.

This is why it is important to make sure you purchase the proper coverage, just in case the unthinkable happens as you drive your vehicle.

If you purchase the right amounts and types of insurance coverage, you don’t need to worry when you are in an accident. Compare cheap car insurance by entering your ZIP into our comparison tool!

References:

  1. http://www.naic.org/state_web_map.htm
  2. https://www.libertymutual.com/auto/car-insurance-coverage/bodily-injury-liability
  3. https://www.allstate.com/tools-and-resources/car-insurance/property-damage-liability-insurance.aspx
  4. https://www.thebalance.com/comprehensive-vs-collision-coverage-527402
  5. http://www.nahu.org/consumer/diinsuranceguide.cfm

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