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.

Full Bio →

Written by

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...

Full Bio →

Reviewed by Daniel Walker
Licensed Auto Insurance Agent

UPDATED: Aug 28, 2020

Advertiser Disclosure

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...

  • In 47 states, you are required to purchase a minimum amount of insurance before you can register your car and to drive legally
  • Personal injury protection is also commonly called “no-fault” or PIP insurance
  • Car insurance pays for damages to property in addition to medical expenses related to injuries received in an accident

Buying auto insurance is a simple process once you know what you are looking for and have compared policies from several companies.

Understanding basic car insurance is a matter of educating yourself about the different types of auto insurance coverage and what kind of financial protection they offer.

Our FREE auto insurance comparison tool can give you great quotes to compare when you enter your zip code above!

Understanding Auto Insurance

In 47 states, you are required to purchase a minimum amount of insurance before you can register your car and to drive legally.

The purpose of auto insurance is to provide you with financial protection if you are involved in a car accident. Finding the most protective auto insurance company is beneficial for having the best coverage possible.

Car insurance pays for damages to property in addition to medical expenses related to injuries received in an accident.

Free Auto Insurance Comparison

Enter your ZIP code below to view companies that have cheap auto insurance rates.

 Secured with SHA-256 Encryption

Liability Insurance

Liability auto insurance provides protection for you if you cause an accident. It is mandatory auto insurance in most states, although the required coverage limits are very low.

Liability insurance pays for damages and medical expenses for the other person. However, it does not pay for repairs to your car or for injuries you or anyone in your car receives.

Since required coverage limits are very low, it is recommended that you purchase additional liability insurance if at all possible.

If your liability insurance limits are inadequate for the costs related to an accident for which you are responsible, you may be potentially sued for the remaining damage costs.

Be sure to know when to report a car accident to the insurance company.

Collision Insurance

Collision insurance is not required by law in any state, but lenders require it if your car is leased or financed. Collision insurance pays for damages to your car if you are involved in an accident.

Collision insurance pays for accidents related to hitting another vehicle, buildings and guard rails. It also pays for damages that are the result of

It also pays for damages that are the result of hit and run accidents and for damages that occur if someone else is driving your car.

Free Auto Insurance Comparison

Enter your ZIP code below to view companies that have cheap auto insurance rates.

 Secured with SHA-256 Encryption

Comprehensive Insurance

Comprehensive insurance is another form of insurance that lenders require if your car is leased or financed. Comprehensive insurance pays for damages that are the result of events other than collisions.

For example, if your car is damaged because of a hail storm or by a flying rock, it will be covered by your comprehensive coverage. Comprehensive insurance also covers your car is it is stolen or damaged by vandalism.

Free Auto Insurance Comparison

Enter your ZIP code below to view companies that have cheap auto insurance rates.

 Secured with SHA-256 Encryption

Personal Injury Protection

Personal injury protection is required as additional insurance coverage by 14 states.

Personal injury protection is also commonly called “no fault” or PIP insurance.

It is also occasionally referred to as “medical expense” car insurance. PIP pays for medical expenses regardless of who is responsible for the accident.

It is also used to pay for expenses related to rehabilitation services, lost wages, and legal expenses.

Gap Insurance

Gap insurance is another form of voluntary auto insurance but is highly recommended if your car is leased or financed.

If your car is declared a total loss, you will be paid only for the value of the car at the time of the loss, not the amount of money you owe on the car.

Gap insurance provides payment for the difference between the depreciated value of your car and the amount of money you owe on your lease or auto loan.

Buying Auto Insurance Coverage

You can buy auto insurance coverage from almost any car insurance company or an independent insurance broker.

In most cases, if you do not already have coverage with that specific insurance company, you will be required to complete a policy coverage application and submit a down payment before your coverage will be considered to be in force and active.

Once your payment and application are received, they are processed by the insurance underwriting department.

They conduct background information checks on your driving record and motor vehicle reports. Additionally, they will conduct a credit report check.

In some cases, if your driving record shows accidents or tickets you have not reported to them in your policy application, your premium rate may increase.

Also, if you have poor or bad credit, this can have a negative impact on your premium rate and it may increase. If your rate will increase, you will be notified and your following payments will be adjusted.

Free Auto Insurance Comparison

Enter your ZIP code below to view companies that have cheap auto insurance rates.

 Secured with SHA-256 Encryption

Comparing Auto Insurance Coverage

It is a good idea to compare several auto insurance companies before deciding to purchase a policy. When comparing companies, make sure you are comparing the same level and type of coverage between companies.

Additionally, you should also compare the same deductible amounts, since this can have a significant impact on rates.

You can find out information about policy rates by talking with an independent insurance broker, who should be able to provide you with rates from several different companies.

Understanding what type of auto insurance you need and how much coverage you need is half the process when buying car insurance. You can also compare rates by visiting an insurance comparison website, where you can get quotes from several different companies very quickly.

Enter your ZIP code into our FREE car insurance comparison tool now!4