- The right coverage for you will depend on your budget, how much coverage you need, and what company you want to purchase from
- While there are many types of auto insurance and add-ons you can buy, the main three that will cover most of what you need are liability, comprehensive, and collision
- You can compare prices to determine where to start, but personalized quotes are the best way for you to choose the most appropriate insurance for you
Anyone who plans on driving needs insurance, but finding the right coverage can be confusing. That’s especially true if you’re unfamiliar with insurance terms, like liability, collision, and comprehensive coverage.
There are three main factors to consider when choosing insurance: how much coverage you need, what your budget is, and what company to buy from. If you’re wondering, How much insurance do I need? these three items are a great starting point.
If you’re struggling to choose the right coverage, the first place to begin is to shop around for rates to gain an idea of your options. Enter your ZIP code into our free tool to discover what quotes might look like for you.
How to Choose the Right Car Insurance Coverage
The first step in how to find the right auto insurance coverage is to determine how much coverage you need.
While there are numerous insurance products you can purchase, liability, collision, and comprehensive are three main options.
Liability coverage helps pay for damage you cause to other cars and property. Most states (except New Hampshire) require a minimum amount of liability coverage to drive legally.
Collision protects your car, no matter who is at fault for an accident. This includes accidents with other drivers as well as collisions with objects like trees or walls.
Comprehensive covers your car against anything else that can damage it, including weather, vandalism, animal contact, and theft.
Other types of insurance that you can purchase include the following:
- Underinsured/uninsured motorist – Even though most states require drivers to have insurance, not every driver does. This coverage protects your vehicle against drivers with inadequate insurance.
- Personal injury protection – This gives you extra coverage for any medical bills you or your passengers incur after an accident.
- Roadside assistance – When you purchase this, you can call for help anytime you’re stranded on the side of the road.
- GAP coverage – GAP coverage is for drivers with an auto loan. You’ll likely owe more on your loan than the car is worth for the first year or so of your loan, and GAP coverage pays the difference if your car is totaled.
In general, you can’t go wrong with having all three of the main types of coverage. If you’re concerned about your car, a mixture of all three will certainly protect your vehicle from everything on the road.
However, you don’t necessarily need all three. If your car is older and of low value, you can probably avoid comprehensive insurance.
How to Choose the Right Liability Coverage
Every state except New Hampshire has a minimum liability coverage requirement. You can check your state’s minimum requirements below.
State Alabama Alaska Arizona Arkansas California Colorado Connecticut Delaware District of Columbia Florida Georgia Hawaii Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada New Hampshire New Jersey New Mexico New York North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas Utah Vermont Virginia Washington West Virginia Wisconsin Wyoming #blank# #blank# #blank#
Most providers recommend that you purchase more than your state’s minimum coverage. Otherwise, if you cause an accident, you’ll be on the hook for several payments. Your state’s minimum coverage is likely so low that it won’t cover expensive accidents.
How to Choose the Right Full Coverage
Full coverage means that your car has liability, collision, and comprehensive insurance. While it isn’t required by law, full coverage is a good idea if you have a new or valuable vehicle.
On top of that, lenders usually necessitate full coverage on any vehicle you don’t own.
Regardless of your ownership status, you should consider full coverage for any car you want to have around for a long time. Your car is an investment, and full coverage will protect it.
The best way to find the perfect policy is to shop around for quotes and explore insurance options. Some companies provide extra coverage and unique add-ons. It’ll cost more, but you might enjoy the additional insurance.
How much does insurance cost?
Several factors comprise the price of your insurance:
- Your age
- Your gender
- Your vehicle make, model, and year
- Your location
- Your driving history
- Your insurance history
- Your credit score
- Your average yearly driving miles
Insurance companies will use all these factors to determine your price. No matter what coverage you end up buying, the right amount of insurance for you will fit your budget.
Here are the average prices of the top insurance companies:
Company Average monthly price of liability Average monthly price of full coverage
Allstate $58 $117
MetLife $68 $176
Progressive $48 $125
Nationwide $41 $123
GEICO $36 $117
The Hartford $62 $189
State Farm $44 $121
USAA $29 $102
As you can see, USAA has extremely affordable prices. However, you have to be active or retired military or their families to be eligible to join USAA.
Which insurance company is right for you?
There are a few key characteristics you should seek when you consider an insurance company, but the importance of each factor will depend on how much weight you put on them. For example, you’ll select a different company if you want a fast claims process vs. lower rates.
The leading insurance companies have fast response times, a quick claims process, higher settlements, and excellent customer service. They should also offer competitive rates.
An excellent way to gain a sense of the quality of a company is to inspect third-party reviewers, such as J.D. Power, A.M. Best, or the Better Business Bureau. Most insurance companies have a rating, but you can review the top insurance companies below:
Company A.M. Best rating J.D. Power rating BBB rating
Allstate A+ Average A+
GEICO A++ Slightly below average A+
American Family A Above average A
Travelers A++ Below average A
Nationwide A Above average A+
Progressive A+ Below average A+
State Farm A++ Above average B+
USAA A++ Above average A+
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However, the most critical thing to do to obtain the best rates is to shop around for quotes. You can examine averages all day, but the price of your policy will be unique to you.
Find the Best Insurance for Your Needs
Buying insurance can be a confusing, complicated process, but you don’t have to do it alone. Using this guide is a good starting point, and you can work with an insurance agent.
When you’re ready to choose the right coverage for you, you should obtain quotes from as many companies as possible. Enter your ZIP code into our free tool to determine what quotes might look like for you.
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