How to Choose Auto Insurance Coverage

You should aim to have a good balance between value, protection and comfort when choosing a car insurance coverage. Motorists can transfer the exposure associated with owning and driving a vehicle to insurers but it isn’t possible to transfer all and it may get expensive if you keep adding to your policy. You would want to transfer large and financially challenging risks to your vehicle insurer. And you should appreciate that you may be able to keep your costs down by accepting certain risks. So, you need to decide on coverage, deductibles, get a few quotes to line up a few companies and choose the most beneficial policy.


One way of choosing the most suitable auto insurance coverage is considering worst case scenarios and deciding what protections would help the most and what can be left out. Here are some of the most common coverages to consider adding to your policy;

First of all, every driver is financially responsible for injuries and damages they cause to third parties and therefore states mandate liability coverage.

Bodily Injury Liability coverage pays for injuries you may cause to others and Property Damage Liability pays for other people’s financial losses like damages to property and vehicles.

Liability coverage will not include losses suffered by policyholders or family members. If they are injured in a car accident they may have costs in the form of medical bills or time lost off work. Medpay and Personal Injury Protection (PIP) are two solutions to deal with these expenditures. Motorists may have health plans that include traffic related injuries but they wouldn’t include time off work or other consequential expenses due to traffic accidents.

Uninsured/Underinsured Motorist Bodily Injury coverage pays for your and your passengers’ injuries when you are hit by an uninsured driver and over 20 states require UUMBI coverage to be included as part of minimum coverage. Uninsured/Underinsured Motorist Property Damage pays for damages to your vehicle in the same situation.

Physical damages coverage

Collision coverage repairs or replaces your automobile if it suffers crash related damages, even if it is your fault.

Comprehensive coverage deals with most other damages to your own auto, except collision like theft, vandalism, fire, act of nature and many other perils. A policyholder who wishes to be protected against those should include both Collision and Comprehensive coverage.

Other optional add-on covers

Rental Car Reimbursement coverage would take care of the hired vehicles to replace the one being repaired up to allowable limits. People may not be overly concerned with this if they have access to another vehicle or public transport or can pay for the rental out of pocket.

Roadside Assistance can be very helpful to provide assistance if you are stranded on the roadside or need towing and reasonably cheap to add to your policy.

GAP Insurance pays the difference between what your insurer pays in case your vehicle is totalled and your outstanding loan.

Not only virtually every vehicle owner is required to buy liability and other state required coverage but also they are advised to increase liability coverage levels a lot more than what is mandated by their states.

If you own your automobile outright, the rest of them are optional. However, most people have expensive enough automobiles so they naturally include Collision and Comprehensive to make their policy full coverage. Your lender or lessor would insist on full coverage as well, if applicable. Lenders usually insist on GAP insurance as well.

On average full coverage auto insurance policies are 3.2 times more expensive than basic state required minimum coverage. It provides much better protection but it costs a lot more as well.


If you are finding it hard to pay for full coverage car insurance, deductibles can help you to reduce the costs. But this comes at a cost of having to pay more out of pocket if you have accidents. Both Collision and Comprehensive coverage comes with deductibles that are payable for each and every claim. Increasing your deductibles reduces your automobile insurance premiums considerably. So, this may be a strategy to consider and check by getting quotes for different levels of deductibles.


You can get large discounts if you have good driving and credit history, are a student with good grades, have a car with safety features, bundle your policies, take a defensive driving course, pay the premium in full and for many other reasons. Each company has their own set of discounts and apply different percentages.

Get Quotes

However, what makes a real difference to your premium is the car insurance rates applied to you, That is why you need to shop around to find cheaper companies to keep your costs down. It doesn’t really matter how you get quotes but you should get a few of them or ask your broker to shop around for you. Comparison sites usually allow motorists to get a few quotes very quickly.

You provide all your details when you are getting a quote and the company you applied to considers all the facts and offers you their best price. That means, they have included all the discounts you qualified for already. Most importantly, they have rated your details and came up with their best rates.

Compare Quotes

The first step is to make sure each quote at least includes the auto insurance coverage you want and there are no conditions attached to the offer. Then, you need to make sure that deductibles are about the same and mark the ones with higher deductibles. Lastly check if any of the companies offering better coverage with extra add-ons you didn’t bargain for.

Choose Your Insurer

Getting quotes and comparing them would give you a list so you know which companies are within your price range. If there isn’t a clear winner already with the best price, coverage and reputation, you should go with your personal preferences. If a reputable company is offering an affordable quote with acceptable deductibles, you may be happy to go with them. And some people may actually feel strongly about the way they want to communicate with their vehicle insurer and choose accordingly.

For example, you may prefer to deal with an agent and go with the company that has a local agent near you. Then, you can actually call the agency and let them bind the policy for you. There is no one way of choosing a company but it is important that you get the automobile insurance coverage you need, the premium is within your budget and highly competitive and you are comfortable with the company you have chosen.