Jessica Sautter is a Content Writer for CarInsuranceCompanies.com with a Bachelor’s Degree from Eastern Michigan University in Elementary Education with a Major in Reading and a Minor in Mathematics.

Full Bio →

Written by

Chris Harrigan has an economic degree from Limestone College and an MBA from Clemson University. He previously managed auto insurance claims for Enterprise Rent-A-Car. Currently, he is using his business and insurance expertise to provide insurance data analysis and visualizations to enhance the user experience.

Full Bio →

Reviewed by Chris Harrigan
Former Auto Insurance Claims Manager

UPDATED: Sep 19, 2020

Advertiser Disclosure

It’s all about you. We want to help you make the right car insurance coverage choices.

Advertiser Disclosure: We strive to help you make confident insurance decisions. Car insurance comparison shopping should be easy. We partner with top car insurance companies. This doesn’t influence our content. Our opinions are our own.

Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.

Key takeaways...

  • In 47 states, you are required to carry at least liability insurance on every car you operate
  • Liability insurance covers any repairs or injuries sustained by the other driver
  • Liability coverage does not pay for injuries you or your passengers sustain in an accident

You are required to purchase liability car insurance in 47 states in the United States if you want to register your car and drive legally. In 15 states, you are also required to purchase personal injury protection, also known as “PIP” or “no-fault” insurance.

While you can purchase the legally required minimum amount of car insurance, it is wiser to purchase additional insurance for full protection if you are involved in an accident.

Enter your zip code above to receive FREE car insurance quotes for you to compare.

Table of Contents

Liability Auto Insurance

In most states, liability auto insurance is the type of insurance you are legally required to purchase. The minimum amount of liability insurance varies from state-to-state, but usually, it is a fairly low level of coverage.

Unfortunately, if you only purchase the minimum amount of liability insurance, you probably will not have enough coverage to protect you in an accident. If this occurs, then you will be held liable for expenses not covered by your insurance.

Liability auto insurance provides payments for repairs and injuries sustained by the other driver if you are involved in an accident.

It does not cover costs to repair your car or treatment for injuries you or your passengers sustain.

If you have a low level of coverage and hit an expensive or newer car, you can almost be guaranteed that you will not have adequate insurance to cover damages and injuries.

Liability insurance is expressed in a sequence of three numbers on your auto insurance policy.

For example, if you see 10/30/20 on your car insurance policy, it means that you have $10,000 of coverage per person for medical expenses due to injuries, $30,000 of total coverage for all medical expenses for all people injured in the accident, and $20,000 for repairs and property damage.

Compare Car Insurance Companies

Compare quotes from the top car insurance companies and save

 Secured with SHA-256 Encryption

Compare quotes from the top car insurance companies and save

 Secured with SHA-256 Encryption

Collision Auto Insurance

Collision auto insurance pays for repairs to your car if you are involved in an accident. Collision means just that, your car hits something and has a collision. Collision accidents can involve other cars, stationary buildings, fences, guard rails and anything else, including animals.

You should have enough collision insurance to pay for repairs to your car, particularly if your car is newer or expensive.

If you have an older car, collision insurance will only pay for repairs to your car if they cost less than the value of your car at the time of the accident.

If the repairs will cost more than the value of your car, then your car will be declared a total loss and you will be paid the value of your car at the time of the loss.

Comprehensive Auto Insurance

Comprehensive auto insurance provides protection for other kinds of accidents or damage to your car. For example, if your car is damaged by a tornado, hurricane or earthquake, it will be covered under a comprehensive policy.

Comprehensive auto insurance also provides coverage if your car is damaged due to vandalism or is stolen.

If your car is leased or you have an auto loan on it, you will probably be required to purchase comprehensive car insurance, since the lender actually owns the car and will want as much protection as possible if the car is damaged or stolen.

Personal Injury Protection Car Insurance

Personal injury protection or PIP insurance is required auto insurance in 17 states. PIP auto insurance provides additional protection for injuries regardless of who is at fault and causes an accident.

Personal injury protection provides payments for medical treatments, including doctor visits and hospitalization.

It also provides additional payments for lost wages and legal expenses related to your accident. PIP and also be applied to rehabilitation services for the injured person.

Compare quotes from the top car insurance companies and save

 Secured with SHA-256 Encryption

Gap Insurance

Gap insurance is extremely important if your car is leased or financed. However, it is not required by lenders since it provides financial protection for you, not them.

If your car is damaged beyond repair in an accident, it will be declared a total loss.

The loss will be paid to your financial institution at the rate of the value of the car at the time of the loss, not for the amount of your loan or lease.

This leaves you financially responsible for the difference between the loss value of your car and the remaining balance of your car loan or lease amount.

Gap insurance pays this difference, freeing you from this financial obligation.

Keeping Your Premiums Low

There are several things you can do to keep your premiums low when you compare rates for auto insurance. One is simply to evaluate your auto insurance and compare rates each time your insurance comes up for renewal.

Keep in mind that accidents, claims, and tickets that have happened since your last renewal date will have an impact on your rates and will, most likely, increase your premiums at renewal time.

Also, your credit score is also taken into consideration by insurance companies when determining your auto insurance rates. So it is a good idea to maintain good credit as much as possible and pay your bills on time.

When talking to an insurance company or agent, ask if you are eligible for any discounts.

Insurance companies frequently offer discounts if you are insuring several cars on your policy. They also offer discounts if you bundle your auto insurance with homeowners, rental or life insurance.

Other common discounts include good driver discounts and discounts for older drivers or individuals who have taken a defensive driving course. Insurance companies also offer discounts for newer safety devices and for auto locator devices.

It is important to understand exactly what kind of insurance you need so that you purchase the right kind of protection for your needs. You can keep your auto insurance rates down if you comparison shop and ask about discounts.

No matter if you are looking for basic liability car insurance or any other type of car insurance. We can help you find affordable rates for FREE if you enter your zip code below!

References:

  1. http://www.edmunds.com/car-loan/gap-insurance-how-it-impacts-your-car-loan-or-lease.html
  2. https://www.statefarm.com/insurance/auto/discounts
  3. https://www.nationwide.com/homeowners-insurance-quotes.jsp
  4. https://www.statefarm.com/insurance/auto/coverage-options/liability-coverage