How do I know if I chose the right coverage?
When trying to choose the right coverage, you should consider factors such as the different types of insurance, how much coverage you need, how your car affects your rates, and more. In addition, most states and finance companies will have requirements for how much car insurance you must buy.
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Brad Larsen
Licensed Auto Insurance Agent
Brad Larson has been in the insurance industry for over 16 years. He specializes in helping clients navigate the claims process, with a particular emphasis on coverage analysis. He received his bachelor’s degree from the University of Utah in Political Science. He also holds an Associate in Claims (AIC) and Associate in General Insurance (AINS) designations, as well as a Utah Property and Casual...
Licensed Auto Insurance Agent
UPDATED: Mar 21, 2024
It’s all about you. We want to help you make the right cheap car insurance coverage choices.
Advertiser Disclosure: We strive to help you make confident car insurance decisions. Comparison shopping should be easy. We are not affiliated with any one car insurance company and cannot guarantee quotes from any single company.
Our insurance industry partnerships don’t influence our content. Our opinions are our own. To compare cheap car insurance 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 car insurance. Our goal is to be an objective, third-party resource for everything car insurance-related. We update our site regularly, and all content is reviewed by car insurance experts.
UPDATED: Mar 21, 2024
It’s all about you. We want to help you make the right cheap car insurance coverage choices.
Advertiser Disclosure: We strive to help you make confident car insurance decisions. Comparison shopping should be easy. We are not affiliated with any one car insurance company and cannot guarantee quotes from any single company.
Our insurance industry partnerships don’t influence our content. Our opinions are our own. To compare cheap car insurance 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.
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- When trying to choose the right coverage, you should consider factors such as what types of coverage you need, how much coverage is required in your state, what type of car you have, how much you can afford, and more
- Each state will have a minimum amount of insurance you need to buy, which may include liability, uninsured/underinsured motorist coverage, and personal injury protection coverage
- When it comes to liability coverage, limits of 100/300/100 is usually sufficient for most people
If you don’t have a lot of experience with car insurance, it can be a daunting task trying to choose the right coverage. There are many car insurance companies with a variety of different coverage types, and you may not know which ones are best for you. On top of that, having the freedom to choose coverage limits, deductibles, and more can seem confusing if you don’t know what the best amounts are.
Below, we’ve discussed some of most important factors you should consider when buying car insurance to make sure you have the right types of coverage and the right coverage limits.
If you don’t know how to choose the right car insurance coverage, start by entering your ZIP code into our free quote comparison tool above.
How do I choose the right coverage?
There are a lot of different factors that go into choosing the right car insurance for you. Some of the factors that you will have to consider include:
- What types of coverage you need
- How much coverage you need
- Which car insurance company is right for you
- How much coverage you can afford
- How your car and demographics will affect car insurance rates
Figuring out what kinds of coverage you need is a good place to start, so let’s review some of the basic types of coverage and who these policies are for.
Most states require you to purchase liability coverage. Liability coverage is split into property damage liability and bodily injury liability. It will cover damage to other people’s property and injuries to other people if you are at fault in an accident. You will need to purchase at least the minimum required in your state.
Minimum Car Insurance Requirements by State
| States | Coverage Types | Coverage Limits |
|---|---|---|
| AL | BI & PD Liab | 25/50/25 |
| AK | BI & PD Liab | 50/100/25 |
| AZ | BI & PD Liab | 15/30/10 |
| AR | BI & PD Liab, PIP | 25/50/25 |
| CA | BI & PD Liab | 15/30/5 |
| CO | BI & PD Liab | 25/50/15 |
| CT | BI & PD Liab, UM, UIM | 25/50/20 |
| DE | BI & PD Liab, PIP | 25/50/10 |
| DC | BI & PD Liab, UM | 25/50/10 |
| FL | PD Liab, PIP | 10/20/2010 |
| GA | BI & PD Liab | 25/50/25 |
| HI | BI & PD Liab, PIP | 20/40/10 |
| ID | BI & PD Liab | 25/50/15 |
| IL | BI & PD Liab, UM, UIM | 25/50/20 |
| IN | BI & PD Liab | 25/50/25 |
| IA | BI & PD Liab | 20/40/15 |
| KS | BI & PD Liab, PIP | 25/50/25 |
| KY | BI & PD Liab, PIP, UM, UIM | 25/50/25 |
| LA | BI & PD Liab | 15/30/25 |
| ME | BI & PD Liab, UM, UIM, Medpay | 50/100/25 |
| MD | BI & PD Liab, PIP, UM, UIM | 30/60/15 |
| MA | BI & PD Liab, PIP | 20/40/5 |
| MI | BI & PD Liab, PIP | 20/40/10 |
| MN | BI & PD Liab, PIP, UM, UIM | 30/60/10 |
| MS | BI & PD Liab | 25/50/25 |
| MO | BI & PD Liab, UM | 25/50/25 |
| MT | BI & PD Liab | 25/50/20 |
| NE | BI & PD Liab, UM, UIM | 25/50/25 |
| NV | BI & PD Liab | 25/50/20 |
| NH | FR only | 25/50/25 |
| NJ | BI & PD Liab, PIP, UM, UIM | 15/30/5 |
| NM | BI & PD Liab | 25/50/10 |
| NY | BI & PD Liab, PIP, UM, UIM | 25/50/10 |
| NC | BI & PD Liab, UM, UIM | 30/60/25 |
| ND | BI & PD Liab, PIP, UM, UIM | 25/50/25 |
| OH | BI & PD Liab | 25/50/25 |
| OK | BI & PD Liab | 25/50/25 |
| OR | BI & PD Liab, PIP, UM, UIM | 25/50/20 |
| PA | BI & PD Liab, PIP | 15/30/5 |
| RI | BI & PD Liab | 25/50/25 |
| SC | BI & PD Liab, UM, UIM | 25/50/25 |
| SD | BI & PD Liab, UM, UIM | 25/50/25 |
| TN | BI & PD Liab | 25/50/15 |
| TX | BI & PD Liab, PIP | 30/60/25 |
| UT | BI & PD Liab, PIP | 25/65/15 |
| VT | BI & PD Liab, UM, UIM | 25/50/10 |
| VA | BI & PD Liab, UM, UIM | 25/50/20 |
| WA | BI & PD Liab | 25/50/10 |
| WV | BI & PD Liab, UM, UIM | 25/50/25 |
| WI | BI & PD Liab, UM, Medpay | 25/50/10 |
| WY | BI & PD Liab | 25/50/20 |
Some states also require uninsured/underinsured motorist (UM/UIM) coverage. UM/UIM coverage will cover damages to your vehicle or your injuries if you are in an accident with another driver that doesn’t have enough liability coverage to pay your expenses.
In addition, a few states will require personal injury protection (PIP) coverage or MedPay coverage. Both coverages are meant to pay for your and your passengers’ injuries. PIP may have higher coverage limits than MedPay and can cover expenses such as lost wages or funeral expenses.
Two other common types of insurance include collision coverage and comprehensive coverage. Collision coverage will pay for damages to your vehicle after an accident, regardless of fault. Comprehensive coverage will pay for damages to your car caused by many events that are out of your control, such as natural disasters or vandalism. If you finance your vehicle, your finance company may require that you carry collision or comprehensive insurance.
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How much car insurance do I need?
After you’ve considered which types of insurance you should buy, you’ll next need to decide how much of each coverage you should buy. In some cases, the minimum amount you will need is mandated by the state you live in or the finance company’s requirements. However, you will also need to balance requirements, recommended amounts, and how much coverage you can actually afford.
Below are some average annual car insurance rates by coverage level:
Average Annual Car Insurance Rates by Coverage Level
| Company | Average Annual Rates for High Level Coverage | Average Annual Rates for Medium Level Coverage | Average Annual Rates for Low Level Coverage |
|---|---|---|---|
| USAA | $2,667.92 | $2,539.87 | $2,404.11 |
| Geico | $3,429.14 | $3,213.97 | $3,001.91 |
| State Farm | $3,454.80 | $3,269.80 | $3,055.40 |
| American Family | $3,416.40 | $3,544.37 | $3,368.49 |
| Nationwide | $3,505.37 | $3,449.80 | $3,394.83 |
| Progressive | $4,350.96 | $4,018.46 | $3,737.13 |
| Farmers | $4,494.13 | $4,166.22 | $3,922.47 |
| Travelers | $4,619.07 | $4,462.02 | $4,223.63 |
| Allstate | $5,139.02 | $4,896.81 | $4,628.03 |
| Liberty Mutual | $6,356.04 | $6,058.57 | $5,805.75 |
In terms of how to choose the right liability coverage, you should have a balanced combination of property damage liability and bodily injury liability coverage. Most people can manage with $100,000 per person, $300,000 in bodily injury liability per accident, and $100,000 in property damage liability per accident (usually expressed as 100/300/100).
The coverage limits on collision and comprehensive coverage are typically the value of your vehicle. However, you can adjust rates based on your deductible. The average deductible for collision and comprehensive coverage is $500 each, but you can have a higher deductible to decrease your rates or a lower deductible and increase your rates.
Read more: How much insurance coverage do I need?
What is the right car insurance for my car?
The type and amount of car insurance that you buy should make sense for your car. Below are some average car insurance rates by vehicle type:
Average Annual and Monthly Car Insurance Rates by Vehicle Type
| Vehicle Type | Average Monthly Auto Insurance Rates | Average Annual Auto Insurance Rates |
|---|---|---|
| Minivan | $111 | $1,329 |
| SUV | $125 | $1,500 |
| Sedan | $142 | $1,700 |
The age and mileage of your car will affect the cost of your coverage, as well as be a consideration for what types of coverage you should buy. If you have an older car or a vehicle that has a low value, it may not make sense to buy collision or comprehensive coverage. In addition, some cars, such as collector, luxury, or antique cars, will need special coverage.
Read more: Best Auto Insurance Companies & Policies for Antique Cars
How do I choose a car insurance company?
There are many different car insurance companies to choose from, which can make the process of choosing one difficult and time-consuming. However, there are certain things that you should look for, and taking the time to compare multiple companies now can save you money in the long run.
You should check each company’s industry ratings, such as their A.M. Best rating and NAIC complaint index. The A.M. Best rating will indicate the company’s financial strength, while the NAIC can rate the company on customer service and complaints.
Take some time to read online reviews from real customers as well. These people have generally had personal experiences with a company and can give you an idea of how it might be when it comes time to file a car insurance claim.
If you’re wondering how to choose the right auto insurance coverage, start by entering your ZIP code into our free quote comparison tool below to find companies in your area.
Compare quotes from the top car insurance companies and save
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Brad Larsen
Licensed Auto Insurance Agent
Brad Larson has been in the insurance industry for over 16 years. He specializes in helping clients navigate the claims process, with a particular emphasis on coverage analysis. He received his bachelor’s degree from the University of Utah in Political Science. He also holds an Associate in Claims (AIC) and Associate in General Insurance (AINS) designations, as well as a Utah Property and Casual...
Licensed Auto Insurance Agent
Editorial Guidelines: We are a free online resource for anyone interested in learning more about car insurance. Our goal is to be an objective, third-party resource for everything car insurance-related. We update our site regularly, and all content is reviewed by car insurance experts.