Auto Insurance Coverage Options

Liability Coverage

  • Bodily Injury Liability: Covers medical expenses, lost wages, and legal fees if you are at fault in an accident that injures someone else.
  • Property Damage Liability: Covers the cost of damages to another person’s property (e.g., their car, fence, or building) if you are at fault.

Collision Coverage

  • Covers damages to your own vehicle resulting from a collision with another car or object, regardless of who is at fault.

Comprehensive Coverage

  • Covers damages to your vehicle caused by non-collision events such as theft, vandalism, natural disasters, and hitting an animal.

Personal Injury Protection (PIP) or Medical Payments (MedPay)

  • PIP: Covers medical expenses, lost wages, and other related costs for you and your passengers, regardless of who is at fault.
  • MedPay: Covers medical expenses for you and your passengers, regardless of fault, but typically does not cover lost wages.

car driving at night

car with airbag deployed

Uninsured/Underinsured Motorist Coverage

  • Covers your medical expenses and damages if you are hit by a driver who has no insurance or insufficient insurance.

Gap Insurance

  • Covers the difference between the actual cash value of your car and the amount you owe on your car loan if your car is totaled.

Rental Reimbursement

  • Covers the cost of a rental car while your vehicle is being repaired after a covered loss.

Roadside Assistance

  • Covers services such as towing, battery jump-starts, flat tire changes, and locksmith services.

Determining Auto Insurance Coverage Needs

State Requirements

  • Minimum Coverage: Check your state’s minimum liability coverage requirements. This is the least amount of insurance you must carry by law.

Your Vehicle

  • Value of Your Car: If you have a new or expensive car, you might want comprehensive and collision coverage. For older cars, the cost of these coverages might outweigh the benefits.
  • Loan or Lease: If you’re financing or leasing your car, your lender or leasing company may require comprehensive and collision coverage, as well as gap insurance.

Your Financial Situation

  • Assets: If you have significant assets, you might want higher liability limits to protect yourself from lawsuits.
  • Budget: Balance the cost of premiums with the coverage you need. Higher deductibles can lower your premium but require you to pay more out-of-pocket in the event of a claim.

Your Driving Habits

  • Commute Distance: If you have a long daily commute, you might want more comprehensive coverage due to increased exposure to risks.
  • Driving Record: A clean driving record might qualify you for discounts, but if you have a history of accidents, you might need more coverage.

car with smashed windshield

Peace of Mind

  • Comfort Level: Consider how much risk you’re comfortable with. Some people prefer to have more coverage for peace of mind, while others might be comfortable with just the basics.

Example Scenarios

  • New Car Owner: You might need liability, comprehensive, collision, gap insurance, and possibly rental reimbursement.
  • Older Car Owner: You might choose liability coverage only or add collision if the car still holds significant value.
  • High Net-Worth Individual: Higher liability limits, comprehensive, and collision coverage to protect your assets.
  • Minimal Driver: You might want to look into pay by mile insurance programs.

Final Steps

  1. Get Quotes: Compare quotes from multiple carriers to find the best rates.
  2. Review Policies: Look at the details of each policy, including limits, deductibles, and exclusions.
  3. Consult: Don’t hesitate to ask questions or seek advice from your independent insurance agent.