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Guide to car insurance coverage
Understand what you're covered for so you can build your perfect policy.
No one ever plans to be in an accident, but according to the National Highway Traffic Safety Administration there were over 6.7 million police-reported crashes in the US in 2018 alone. Understand your coverage options so you can build the policy that’s right for you.
What’s included with basic coverage?
Minimum coverage auto insurance is required in almost every state except Virginia and New Hampshire. Each state determines its own minimum, which means they vary depending on which state you live in. Auto Insurance typically covers medical fees, vehicle repair damages, body damage, legal fees and property damages.
Bodily injury liability
Covers injuries to another person in an at-fault accident, including medical care, legal help and funeral costs.
Property damage liability
Covers damages to someone else’s property in an at-fault accident, including repairs to vehicle, buildings or fences.
Personal injury insurance
Covers healthcare after an accident regardless of fault, including ambulances, nursing care and lost income.
Uninsured or underinsured motorist coverage
Covers damage caused by another driver if they don’t have insurance or if their insurance isn’t enough to cover the costs.
Optional car insurance coverage to consider
Unlike liability, personal injury protection and uninsured motorist coverage — which are required in most states — the following coverage types are optional. While not mandatory, these features offer extra protection against other mishaps that might happen to you or your car.
If you’re at fault in an accident, your collision insurance kicks in and pays for damage to your car.
Ensures that you’re covered for the expense of replacing or repairing your vehicle, regardless of fault, and damages that aren’t within your control.
This fills the gap between how much money you receive from your insurer and what you still owe to your bank.
Protects you beyond the coverage offered by your basic insurance.
If you break down on the side of the road, you’ll have help when you need it.
New car replacement
You’ll get a newer version of your current car if your new vehicle is stolen or declared a total loss.
Helps you with your medical costs resulting from a car accident — no matter who’s at fault.
If your pet is injured while riding in the car, this can help cover the costs.
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What coverage do I need?
When you’re shopping around for the lowest price car insurance, you’ll see several options with big price differences. Consider both the minimum state requirements and if optional coverages are worth it when building your policy.
The cheapest car insurance isn’t always the right one for your needs, even if saving money is your number one priority. Consider how you’d pay for your car if it was stolen or totaled in an accident. Could you afford a new car without insurance?
Liability claims, for example, could total much more than the bare minimum if you crash into someone’s garage or a car full of passengers. If you’re looking for the cheapest coverage, play around with maximum coverage and monthly payments. An extra $5 a month could cover you for hundreds of thousands in extra protection. But for an older car that’s worth less than your annual premium, consider cutting comprehensive and umbrella coverage.
What do coverage amounts mean?
Each state has minimum requirements for the amount of basic coverage you’re required to purchase. Liability requirements are often stated in 3 numbers, divided by slashes like so: 1/2/3.
The numbers stand for:
- Bodily liability per person
- Bodily liability per accident
- Property damage per accident
For example, the minimum liability coverage for New York state is 25/50/10. That’s $25,000 for bodily injury to one person, $50,000 for bodily injury to all persons and $10,000 for property damage in any one accident. Make sure you’re meeting your state’s minimum requirements.
How much car insurance do I need?
Answer 3 quick questions and compare the right car insurance coverage for you.
Question 1 of 2
Compare how much car insurance you need
|Cheapest rates||Good coverage||Highest coverage|
Recommended based on your answers
How much does each type of coverage cost?
|Coverage||Annual cost||Coverage details||Required||Worth it?|
|Collision||$300||Damage to your car||No||Yes|
|Comprehensive||$135||Nonaccident damage like theft and weather||No||Only for newer cars or high risk areas|
|Property damage liability||$1,000–$2,000||At fault damage to property||Yes||Yes|
|Personal injury protection||$50–$100||Your post-accident injuries regardless of fault||Yes in 15 states||Yes|
|Bodily injury liability||$1,000–$2,000||At fault post-accident injuries to others||Yes||Yes|
|Uninsured motorist||5% of annual premium||Damages caused by uninsured driver||Yes in 22 states||Yes|
|Umbrella||$150–$300||Damages above and beyond other coverage||No||Only for high value assets|
|Medical payments||$50–$100||Post-accident injuries for you and passengers||No||Only as health insurance supplement|
|Gap insurance||$20–$30||Damages if car is stolen or totaled||No||Only for loans over car value|
How to know when you’re covered
Damage to other people’s property
Hitting a car
Hitting a pole
Hit and runs
Hitting an animal
Storm or flood
Emergency accommodation, transport and repairs
Replacement of keys
Contents inside the car
New car replacement
While exclusions may vary between providers, you generally won’t be covered for:
- Damage caused by mechanical failure, depreciation, rust, wear and tear or changes made to the vehicle
- Damage incurred due to participation in a race or your vehicle generally not being safe
- Damage that was caused intentionally
- Any damage incurred if the person driving didn’t have a license or was under the influence of drugs or alcohol
- Drivers not listed on your policy
Effectively comparing car insurance quotes requires understanding the ins and outs of each type of coverage to decide if you need it and what’s covered. Compare car insurance companies to find the right policy and coverage for you.
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