What is proper auto insurance coverage?

Most states require you to carry liability-only auto insurance, but full coverage also includes collision and comprehensive. Full coverage costs $79.58/mo on average in the US.

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Rachel Bodine graduated from college with a BA in English. She has since worked as a Feature Writer in the insurance industry and gained a deep knowledge of state and countrywide insurance laws and rates. Her research and writing focus on helping readers understand their insurance coverage and how to find savings. Her expert advice on insurance has been featured on sites like PhotoEnforced, All...

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Written by Rachel Bodine
Feature Writer Rachel Bodine

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 ex...

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Reviewed by Daniel Walker
Licensed Auto Insurance Agent Daniel Walker

UPDATED: May 26, 2022

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 auto insurance decisions. Comparison shopping should be easy. We are not affiliated with any one auto insurance provider and cannot guarantee quotes from any single provider. Our partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.

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...

  • There are five basic types of auto insurance coverage liability, collision, comprehensive, medical, and uninsured motorist
  • Insurance companies use your personal information to determine how much of a risk they would take by giving you auto insurance
  • Always ask about discounts when you’re shopping for auto insurance online
  • Without the right amount of research, one could easily spend too much on coverage they don’t need

Auto insurance provides a valuable service, protecting you against unexpected bills if you’re in an accident. But shopping amongst all the options and rates that auto insurance companies offer online can seem overwhelming at first.

Knowing what types of coverage you need and learning how you can shave some dollars off your premium will ease your search for auto insurance.

Enter your ZIP code into our FREE auto insurance comparison tool!

What are the different types of auto insurance?

There are five basic types of auto insurance coverage that you should consider buying:

  • Liability Coverage covers injury to other people and other vehicles for which the driver of your car is legally responsible. Liability insurance will kick in for you, a relative, or anyone else who was driving your car with your permission.
  • Collision Coverage helps pay for damage to your automobile caused by a wreck. The vehicle must be listed in your policy.
  • Comprehensive Coverage  auto insurance covers all other damage to your automobile. For example, this type of insurance covers damage done by weather, theft, falling objects, and even riots (learn more here: does car insurance cover riots).
  • Medical Payment Coverage  pays for medical and funeral costs if you, a relative or anyone riding in your automobile is injured or killed in an accident. The insurance company must agree that the prices are fit for industry value.
  • Uninsured/Underinsured Motorist Coverage — protects you in case you’re involved in an accident with a driver who doesn’t have insurance or doesn’t have enough insurance to cover the expenses.

Lenders and states require drivers to carry minimum amounts of certain types of insurance coverage. For example, the state of North Carolina requires that all drivers carry a minimum of $30,000 in bodily injury, $60,000 in total bodily injury and $25,000 in property damage coverage.

Not all states and lenders have the same requirements, so check with your lender or your state’s department of insurance to make sure you’ve got all the insurance you need.

If you’re shopping for insurance online, the insurers should be able to tell you what coverages the law says you must buy.


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What determines the cost of your insurance?

When you ask for free auto insurance quotes or apply for coverage, insurance companies will ask for a good deal of information. They’ll use this information to determine how much of a risk they would take by giving you auto insurance.

Your insurance premium will be higher or lower depending on how high or low your risk level is. Some of the factors that help determine your risk level are under your control, while others are not.

Factors considered by insurers include:

  • Driving Record your previous record usually has the largest impact on your insurance premium. Insurers typically will charge you more if you’ve been charged in a wreck or convicted of speeding and other driving offenses within the past three years.
  • Your Neighborhood – where you live can also affect how much you pay for insurance. Drivers in cities usually pay more than those in rural areas. Insurers consider an area’s vehicle density, the likelihood of accidents and claims, and costs of repair rates.
  • Your Automobile  the type of car you drive can also lower or raise your premium depending on its style, repair and replacement costs, and how often its model is stolen. A sedan, for example, usually costs less to insure than a sports utility vehicle or sports car.
  • Usage of Automobile  the more you drive, the more likely you are to pay for insurance. Insurers usually charge more for vehicles used daily than those used occasionally.

Insurance Discounts

Always ask about discounts when you’re shopping for auto insurance online. The different discounts that insurers offer can be a good comparison point to help you decide which policy is right for you.

The discounts offered by different insurers vary, but some of the most popular include:

  • Safe Driving – awarded for a good driving record with few or no violations.
  • Claims Free – given to drivers who haven’t filed any auto insurance claims in a certain amount of time.
  • Multiple Policies – for drivers who buy policies for multiple vehicles or purchase another type of insurance, such as homeowners or renters, from the company.
  • Homeowners – given to customers who own their own homes.
  • Students– awarded to responsible students with good grades.
  • Paid in Full – granted when a premium is paid up-front, instead of in monthly installments
  • Vehicle Safety Devices – given for safety devices such as airbags, daytime running lights and anti-lock brakes.
Without the right amount of research, one could easily spend too much on coverage they don’t need.

Free Auto Insurance Comparison

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

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