Stop overpaying for car insurance. Compare rates from 12 top insurers and find coverage that actually protects you.
What Is Auto Insurance
Auto insurance is a contract between you and an insurance company that protects you against financial loss in the event of an accident or theft. In exchange for paying a premium, the insurance company agrees to pay your losses as outlined in your policy. Auto insurance provides property coverage for damage to your car, liability coverage for your legal responsibility to others for bodily injury or property damage, and medical coverage for treatment of injuries and rehabilitation.
Types of Coverage
There are six main types of auto insurance coverage. Liability pays for other people's injuries and property damage you cause. Collision covers your vehicle if you hit another car or object. Comprehensive covers damage from events other than collisions such as theft and weather. Uninsured motorist coverage protects you when the other driver has no insurance. Medical payments or PIP covers medical expenses for you and your passengers. Gap insurance covers the difference between what your car is worth and what you owe on your loan.
How Much Coverage You Need
At minimum you need your state's required liability limits but state minimums are almost never enough. A single serious accident can result in medical bills exceeding $100,000. Financial advisors recommend at least 100/300/100 liability limits. If your car is financed or leased your lender will require collision and comprehensive coverage as well.
How to Save Money
The most effective ways to reduce your auto insurance premium include bundling auto and home insurance to save 10 to 25 percent, maintaining a clean driving record, raising your deductible from $500 to $1,000 to save 15 to 20 percent, improving your credit score in states where it is permitted, shopping quotes annually, and enrolling in a telematics program if you are a safe driver.