How to Choose Auto Insurance Coverage

When selecting car insurance coverage, it’s essential to achieve a well-balanced combination of value, protection, and comfort. While insurers can bear the brunt of the risks tied to vehicle ownership and driving, it’s essential to accept that not all risks can be entirely shifted, and excessive coverage may result in premiums surpassing your budget. A prudent approach involves transferring significant and financially burdensome risks to your vehicle insurer while considering self-financing for certain risks to maintain affordable auto insurance costs. To make a well-informed choice, carefully assess coverage options and deductibles, request quotes from multiple companies, and ultimately opt for a policy that best aligns with your specific requirements.

Choosing Coverage

Selecting the most suitable auto insurance coverage involves considering potential worst-case scenarios and determining which protections would be most beneficial while identifying what can be omitted. Here are some of the most common coverages to consider adding to your policy:

  1. Liability Coverage: Liability coverage is mandated by states and may pay for damages and injuries you may cause to third parties in an accident your are at fault. Usually, it comprises two primary elements, namely Bodily Injury Liability coverage, which handles injuries you might inflict on others, and Property Damage Liability, which addresses financial losses suffered by others, such as damages to property and vehicles. Liability coverage offers significant asset protection. Opt for higher coverage limits to avoid paying out-of-pocket for any excess damages or injuries.
  2. Uninsured/Underinsured Motorist Coverage: This protects you and your passengers if you’re involved in an accident with a driver who lacks sufficient insurance or is uninsured. A few states require this coverage as part of the state minimum coverage requirements. Otherwise, it is very helpful coverage, especially in states where the ratio of uninsured drivers is high.
  3. Personal Injury Protection (PIP) or Medical Payments: PIP covers medical expenses and lost wages for you and your passengers, regardless of fault. Medical Payments coverage is similar but may have lower limits and is not available in all states. Again a few states including no-fault states require some level of PIP or MedPay as part of the minimum coverage they require. Otherwise, you should consider this coverage, especially if you don’t have good health insurance.
  4. Collision Coverage: This coverage pays for damages to your own automobile resulting from a collision with another vehicle or object, regardless of fault.
  5. Comprehensive Coverage: This covers non-collision-related damages to your vehicle, such as theft, vandalism, acts of nature, or hitting an animal. Collision and Comprehensive coverage together offer physical damages coverage for your car and they usually have deductibles.
  6. Rental Reimbursement Coverage: This helps cover the cost of a rental car while your vehicle is being repaired after a covered accident.
  7. Roadside Assistance: Provides assistance if your car breaks down on the road, offering services like towing, fuel delivery, and jump-starts. This coverage is usually fairly cheap to add to your policy and it can be very helpful when you are stranded in the middle of nowhere.
  8. GAP Insurance pays the difference between what your insurer pays in case your vehicle is totalled and your outstanding loan.

When you have a loan or lease on your car, you are normally required to buy Collision and Comprehensive coverage and you may need GAP coverage too. Otherwise, you need to consider the value of your automobile to decide on Collision and Comprehensive coverage. If you have an older automobile and you can pay for repairs and replacement out of pocket, you may not feel the need to have Collision and Comprehensive coverage.

On average, vehicle insurance policies with Collision and Comprehensive coverage are 3.2 times more expensive than basic state required minimum coverage. They provide much better protection but they cost 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 and Compare Quotes

In addition to discounts, the rates of car insurance applied to you can significantly impact your premium. Therefore, it is essential to compare various companies to find more affordable options and keep your costs down. You can obtain quotes through different methods, and it is advisable to gather multiple quotes or have your broker assist you in the process. Comparison sites are often convenient for obtaining quick quotes.

When obtaining a vehicle insurance quote, you provide all your details, and the company evaluates this information to present you with their best price, taking into account any qualifying discounts. The company also rates your details to determine the final rates.

The initial step is to ensure that each quote includes the desired auto insurance coverage without any attached conditions. Next, compare the deductibles, noting those with higher deductibles. Additionally, check if any of the companies offer better coverage with additional add-ons that you may not have considered. Some companies provide higher liability coverage than the minimum required in your state as a standard offering, so it’s crucial to review liability coverage limits as well.

Choose Your Insurer

Obtaining quotes and making comparisons will provide you with a roster of vehicle insurance companies. From there, you can begin to identify and highlight the ones that fall within your budgetary constraints. In the absence of a clear frontrunner that excels in terms of pricing, coverage, and reputation, you may rely on your personal preferences to make a decision. It might be prudent to opt for a reputable company that offers a reasonably priced quote with acceptable deductibles, which could leave you content with your choice. Additionally, some individuals may have strong preferences regarding their interaction with the car insurer, choosing based on factors such as online account access or the availability of local agents in their vicinity.

Selecting a company is not a one-size-fits-all process. However, it remains crucial to secure automobile insurance coverage that suits your requirements, while also ensuring that the premium is affordable and competitively priced. Equally significant is your comfort and confidence with the chosen insurance provider.