How to I Know if I Chose the Right Coverage (2024)
Knowing how to choose the right coverage is important for every driver. While many states require drivers to carry a minimum amount of auto insurance, coverage and limits are usually very low. Consider adding collision, comprehensive, and uninsured motorist coverages so that you are fully protected. Once you choose the right auto insurance coverage, save money by raising your deductibles and adding discounts.
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Zach Fagiano
Licensed Insurance Broker
Zach Fagiano has been in the insurance industry for over 10 years, specializing in property and casualty and risk management consulting. He started out specializing in small businesses and moved up to large commercial real estate risks. During that time, he acquired property & casualty, life & health, and surplus lines brokers licenses. He’s now the Senior Vice President overseeing globa...
Licensed Insurance Broker
UPDATED: Jul 26, 2023
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 insurance industry 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.
UPDATED: Jul 26, 2023
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 insurance industry 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.
On This Page
- There are many types of auto insurance coverage available to choose from
- Your state requirements and your vehicle will help determine which coverage options you need
- Even if you choose full coverage, you can get low rates by taking advantage of discounts and raising your deductible
When it comes to understanding auto insurance, the first thing you need to do is choose the right coverage. There are many different types of auto insurance coverage options available, and auto insurance is not one size fits all. Learning how to choose the right auto insurance coverage is very important.
The coverage options you choose will depend on several different factors, and your auto insurance rates will vary based on the amount of coverage you have.
Before you buy auto insurance, shop around to compare coverages and rates from multiple companies. Every company will offer a different rate, so comparison shop to find your best deal.
To find rates for the coverages you need, enter your ZIP code now, and compare free auto insurance quotes from companies near you.
Table of Contents
What are the types of auto insurance to choose from?
Not all auto insurance coverages are the same, and you probably do not need to carry every coverage available. The first part of learning how to choose the right car insurance coverage is to know what different coverages are for.
Most states require drivers to have at least a minimum amount of auto insurance to drive legally. However, those coverages vary from state to state, and the limits are usually very low.
Common auto insurance coverages are:
- Liability – Pays for property damage and bodily injury for others if you cause an accident
- Collision – Pays for damages to your vehicle if you cause an accident
- Comprehensive – Pays for damages to your vehicle that are not from an accident, such as fire, theft, flood, vandalism, falling debris, and acts of nature like hail
- Uninsured/under-insured motorist – Covers damages if you are hit by someone with either little or no auto insurance
- Medical payments and personal injury protection – Helps pay for medical bills for you and your passengers regardless of who is at fault
- GAP – Pays the difference in what you own on your vehicle and what it is worth
- Custom and classic car – Covers expensive repairs to custom or classic vehicles
You can also add coverages like roadside assistance and rental car coverage to your auto insurance policy. These are considered add-ons and offer helpful services.
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How much is auto insurance?
Auto insurance companies charge higher rates for more coverage. This table shows you how different average annual rates can be from top insurance companies based on which coverage you choose.
| Company | Average Annual Rate for Low Coverage | Average Annual Rate for Medium Coverage | Average Annual Rate for High Coverage |
|---|---|---|---|
| Allstate | $4,628.03 | $4,896.81 | $5,139.02 |
| American Family | $3,368.49 | $3,544.37 | $3,416.40 |
| Farmers | $3,922.47 | $4,166.22 | $4,494.13 |
| Geico | $3,001.91 | $3,213.97 | $3,429.14 |
| Liberty Mutual | $5,805.75 | $6,058.57 | $6,356.04 |
| Nationwide | $3,394.83 | $3,449.80 | $3,505.37 |
| Progressive | $3,737.13 | $4,018.46 | $4,350.96 |
| State Farm | $3,055.40 | $3,269.80 | $3,454.80 |
| Travelers | $4,223.63 | $4,462.02 | $4,619.07 |
| USAA | $2,404.11 | $2,539.87 | $2,667.92 |
Although high or full coverage rates are higher, you also get much more coverage. Low or liability-only coverage leaves you to pay for damages to your vehicle. While the initial rates are lower, you will pay more in the long run, by paying for expensive repairs.
How do you choose the right coverage for you?
There are several factors to take into consideration when you are deciding the right amount of coverage for you.
First, look at the state requirements for auto insurance. This will help you know how to choose the right liability coverage. While most states require at least a minimum amount of liability coverage, limits are usually very low.
Next, take a look at your vehicle. Is it older and not worth very much money? Or, is it new, expensive, or custom? An older vehicle probably does not need as much coverage since repairs will not be as expensive. However, new or expensive cars are much more costly to repair or replace.
Then, think about other coverages you need. Collision and comprehensive coverages help pay for damages to your vehicle. Adding them makes sense, especially if you cannot afford to pay for repairs yourself.
Also, consider adding uninsured/under insured motorist coverage. According to the Insurance Information Institute, about 12% of drivers are uninsured. If an uninsured driver causes an accident, your insurance will need to step in to pay for damages.
Other coverages such as medical payments and personal injury protection help pay for medical bills. Since hospital stays and medications are so expensive, adding these coverages can help cover costs.
Auto insurance add-ons like roadside assistance and rental car coverage can be included if you think you will benefit from them.
How can you save on auto insurance?
Once you choose the right amount of coverage, the next step is getting the lowest rates possible. There are some easy ways to save on the coverage you need.
First, choose high deductibles. A deductible is the amount of money you have to pay before your insurance begins paying. Most deductibles are $500 or $1,000. While choosing a higher deductible means you have to pay more if you use your insurance, your rates will be lower, allowing for more savings overall.
Next, take advantage of auto insurance discounts. Discounts can significantly lower rates, and most insurance companies allow you to combine them for the most savings. Common car insurance discounts include good student, safe driver, multi-vehicle, and multi-policy.
One of the best ways to save money on auto insurance is to shop around. Every company uses different methods of determining rates. While one company may charge you higher rates because of a speeding ticket, another company may overlook that.
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Choosing the Right Coverage: What You Need to Know
Choosing the right auto insurance coverage does not have to be daunting. Look at your vehicle and financial situation to determine the coverages and limits that make the most sense for you. Every driver will have different needs.
When you know what coverage you want, there are ways to get lower rates. Raise your deductible, take advantage of discounts, and shop around to find the best coverage with the lowest rates.
Find affordable auto insurance by comparing coverages, rates, and discounts. Now that you know what coverage you need, enter your ZIP code to compare auto insurance quotes from companies in your area for free.
Frequently Asked Questions
How do I choose the right auto insurance coverage?
Choosing the right auto insurance coverage is crucial for every driver. Start by considering your state’s minimum requirements, but also think about adding collision, comprehensive, and uninsured motorist coverages for better protection. Raising deductibles and taking advantage of discounts can help you save money on your coverage.
What are the different types of auto insurance coverage?
Auto insurance coverages vary, and not all are necessary for every driver. Common coverages include liability, collision, comprehensive, uninsured/underinsured motorist, and medical payments/personal injury protection. Optional add-ons like roadside assistance and rental car coverage are also available.
How much does auto insurance cost?
The cost of auto insurance depends on several factors, including the coverage options you choose. Rates vary among insurance companies. While high coverage levels come with higher rates, they also offer more protection. Comparing quotes from different companies can help you find the best price for the coverage you need.
How do I save money on auto insurance?
To save on auto insurance, consider choosing higher deductibles, as they can lower your premiums. Take advantage of discounts offered by insurance companies, such as safe driver, multi-vehicle, and multi-policy discounts. Shopping around and comparing quotes from multiple providers is another effective way to find the most affordable rates.
How can I find the right coverage with the lowest rates?
To find the right coverage with the lowest rates, evaluate your vehicle and financial situation to determine the appropriate coverage and limits for your needs. Then, raise your deductibles, apply for discounts, and compare quotes from different insurance companies to find the best deal. Enter your ZIP code to receive free auto insurance quotes from local companies.
Compare over 200 auto insurance companies at once!
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Zach Fagiano
Licensed Insurance Broker
Zach Fagiano has been in the insurance industry for over 10 years, specializing in property and casualty and risk management consulting. He started out specializing in small businesses and moved up to large commercial real estate risks. During that time, he acquired property & casualty, life & health, and surplus lines brokers licenses. He’s now the Senior Vice President overseeing globa...
Licensed Insurance Broker
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.