Auto insurance is essential financial protection for you and your car. It covers the costs if you cause a car accident that injures someone else or damages their property. It can also cover damage to your own car, either from a collision or another type of danger, like hail, fire, falling objects and theft. Car insurance can even pay for towing if you’re stranded by the side of the road, or for a rental car if yours is in the shop after an accident.
At least a minimum amount of car insurance is legally required in almost every state, but most drivers need more coverage than just their state’s requirements.
Every car insurance policy is made up of different types of coverage that all provide different types of protection.
When you hear full coverage car insurance, that just means an auto insurance policy that includes a full range of protection for both your and your car.
|COVERAGE||PROTECTS AGAINST…||LIKE IF…|
|Bodily injury liability||Injury you cause with your car||You rear-end another driver and the impact gives them whiplash|
|Property damage liability||Property damage you cause with your car||You run a stoplight and cause an accident with another car, smashing their passenger-side door|
|Personal injury protection||Medical expenses for you and your passengers after an accident (required in some states)||You live in a “no-fault state” and are injured in a car accident|
|Uninsured/underinsured motorist||Damage caused by a driver who doesn’t have insurance, or whose insurance doesn’t fully cover repair costs||You’re t-boned by an uninsured driver and your car requires expensive repairs|
|Comprehensive||Damage not caused by a collision||An icy tree branch falls onto your car’s roof, smashing it and cracking the windshield|
|Collision||Damage caused by a collision, no matter who was at fault||You backed into a telephone pole and cracked your rear bumper|
According to a 2020 report from the National Association of Insurance Commissioners (NAIC), the average car insurance premium was $1,134 a year (about $95 a month). But car insurance rates can vary widely depending on factors like driving history and type of car.
Your insurance company matters too — you can submit the exact same profile to three different companies and get three very different prices.
The best car insurance company isn’t always the one that offers you the lowest rates. When you’re choosing car insurance, weigh cost along with factors like claims satisfaction ratings and customer happiness.
Independent third-parties like J.D. Power, which rates insurance companies based on feedback from real customers, and A.M. Best, which scores insurance companies on their financial stability, are good places to look for help choosing the best company for you. Low rates are great, but you want a car insurance company that will be there to help you when you need to file a claim.
Buying car insurance can seem intimidating, but it’s actually an easy process — you can probably do it in one afternoon.
All you have to do is follow these five steps for simple shopping:
Anna Swartz is a Managing Editor at Policygenius in New York City, and an expert in auto insurance. Previously, she was a senior staff writer at Mic, writing about news and culture. Her work has appeared in The Dodo, AOL, HuffPost, Salon and Heeb.