What Car Insurance Coverage Do I Need?

Getting car insurance can be confusing, especially if you’re not sure what type of coverage will work best for your driving habits and lifestyle. To help you decide what kind of coverage you need, here’s a look at the main types of car insurance policies and what each one includes, so you can choose the right policy to suit your needs. We’ll also look at additional coverage available so you can adjust your policy to match your specific driving demands. If you have any questions along the way, feel free to contact us or check out our other articles on different aspects of car insurance coverage.

Collision coverage

A liability-only policy pays for property damage to your car caused by accidents you are at fault for. If your car has been damaged in an accident, you may be able to use collision coverage to pay for repairs, which can substantially reduce your deductible. Because collision coverage is relatively expensive and almost all states mandate personal injury protection (see below), it’s not uncommon to drop collision once you have paid off your car or have adequate other insurance.

Comprehensive coverage

No one ever plans to get into an accident, but if you’re unfortunate enough to be in one, comprehensive insurance coverage will cover you for all of your repairs. However, if there is any damage beyond what’s covered by your comprehensive insurance policy, you will have to pay for it out-of-pocket. That’s why most drivers elect to purchase collision coverage too. This type of coverage takes care of damages from car accidents when comprehensive isn’t enough.

Rental reimbursement

If you’re renting a car, you can benefit from rental reimbursement coverage. Some rental companies won’t let you bring your own insurance, and if you don’t want to leave your personal auto policy at home, getting supplemental rental insurance can help.

Uninsured/underinsured motorist coverage

If you get into an accident with someone who doesn’t have insurance or enough insurance to cover your damages, uninsured/underinsured motorist coverage can help you recoup your losses. Depending on your state, insurance companies may sell basic underinsured motorist coverage for as little as $10 per year.

General car insurance coverage

You should get basic liability coverage with your car insurance to protect yourself in case you’re involved in an accident that results in damage or injury to a third party. This basic coverage typically costs about $100 per year and can help cover any medical expenses for someone who is injured in an accident caused by you, as well as legal expenses if someone sues you.

Personal injury protection and uninsured motorist coverage

Personal injury protection (PIP) pays for your medical expenses and lost wages after a car accident, no matter who was at fault. (Some states call it no-fault coverage.) Uninsured motorist coverage protects you if you’re in an accident with a driver who doesn’t have auto insurance. If you don’t have PIP or uninsured motorist coverage, it can cost tens of thousands of dollars to cover your injuries out-of-pocket.

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