Sara Routhier, Managing Editor and Outreach Director, has professional experience as an educator, SEO specialist, and content marketer. She has over five years of experience in the insurance industry. As a researcher, data nerd, writer, and editor she strives to curate educational, enlightening articles that provide you with the must-know facts and best-kept secrets within the overwhelming world o...

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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Reviewed by Jeffrey Johnson
Insurance Lawyer Jeffrey Johnson

UPDATED: Feb 13, 2022

Advertiser Disclosure

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

Advertiser Disclosure: We strive to help you make confident auto insurance decisions. Comparison shopping should be easy. We are not affiliated with any one auto insurance provider and cannot guarantee quotes from any single provider. Our partnerships don’t influence our content. Our opinions are our own. To compare 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 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.

Here's What You Need to Know

  • There are many types of car insurance coverages including liability, collision, and comprehensive
  • The type of vehicle you own and the state you live in will help determine what kind of coverage you need
  • Save on car insurance by maintaining a clean driving record and taking advantage of discounts

Car insurance can be challenging to navigate, but you will need to choose the right coverage in order to drive legally in almost every state. For example, Florida car insurance requirements only include liability and personal injury protection.

However, state requirements are not all that you should consider when comparing auto insurance. You also need to protect your vehicle if it’s damaged, and you need limits that will cover repairs if you cause an accident.

You should also shop around when you are ready to select car insurance. Every auto insurance company will offer different rates and coverage options. Compare multiple companies to find the coverage you need with the lowest rates.

If you are ready to choose the right coverage for you, enter your ZIP code to compare free car insurance quotes from companies in your area.

What are the types of car insurance?

It can seem daunting to learn how to select the appropriate car insurance coverage because there are numerous options available. However, once you know what each coverage offers, you can easily decide what you need and what you don’t.

These are the main types of car insurance:

  • Liability – covers bodily injury and property damage to others if you cause an accident
  • Collision – covers damages to your vehicle if you cause an accident
  • Comprehensive – covers damages that don’t involve an accident like fire, theft, vandalism, and acts of nature
  • Uninsured/underinsured motorist – covers damages to you and your vehicle if you are hit by another driver who either doesn’t have insurance or has very little coverage
  • Medical and personal injury protection – covers medical expenses for you and your passengers, no matter who is at fault in an accident
  • GAP – covers the difference between what you owe on your vehicle and what it is worth. There are usually limits as to how long you can carry this coverage.

While there are additional coverages such as roadside assistance, rental car coverage, and new car replacement, those are all considered add-ons.

The type of coverages you choose will help determine your car insurance rates. The more coverage you have, the higher your rates will be.

This table displays average annual rates from top car insurance companies based on the type of coverage.

Average Annual Car Insurance Rates Based on Coverage Type
CompanyAverage Annual Rate for Low CoverageAverage Annual Rate for Medium CoverageAverage Annual Rate for High Coverage
Allstate$4,628.03$4,896.81$5,139.02
American Family$3,368.49$3,544.37$3,416.40
Farmers$3,922.47$4,166.22$4,494.13
GEICO$3,001.91$3,213.97$3,429.14
Liberty Mutual$5,805.75$6,058.57$6,356.04
Nationwide$3,394.83$3,449.80$3,505.37
Progressive$3,737.13$4,018.46$4,350.96
State Farm$3,055.40$3,269.80$3,454.80
Travelers$4,223.63$4,462.02$4,619.07
USAA$2,404.11$2,539.87$2,667.92

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While rates for full coverage are higher, that coverage is also more extensive. This type of insurance will cover you and your vehicle no matter who causes an accident. In addition to peace of mind, your out-of-pocket costs will also be lower.

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How do you determine which car insurance coverage is right for you?

There are multiple factors that you need to consider when selecting the right coverage. Everything from your vehicle to how much money you can afford to spend determines how much coverage you need.

Still asking, how much insurance coverage do I need?

First, you need to know how to choose the right liability coverage. Almost every state requires you to carry some sort of liability coverage to ensure that others are protected if you cause an accident.

However, the required coverage limits are usually very low and probably won’t cover all of the costs of an accident. Consider increasing the liability coverage so that you won’t have to pay for damages yourself.

Second, consider your vehicle. Is it new and expensive, or is it an older car that you can easily replace? If you can’t afford to repair or replace your car yourself, then consider adding collision and comprehensive coverages. These coverages help pay for damages to your vehicle.

Next, consider medical coverages and uninsured/underinsured coverages in the same manner. Hospital bills are very expensive and paying for them out of pocket is probably not an option.

Also, many drivers either don’t carry insurance at all or merely carry the minimum. In fact, according to the Insurance Information Institute, approximately 12% of drivers are uninsured. Adding a little extra coverage can give you peace of mind no matter what other drivers do.

It’s also important to note that if you lease a vehicle, you may not have an option regarding the type of coverage you carry. Most lenders require you to have full coverage so that their investment is completely protected.

What are car insurance deductibles?

Another thing to consider is your deductible. A car insurance deductible is the amount of money you have to pay up-front before your car insurance will kick in. Most deductibles are anywhere between $500-$1,000.

In general, the higher your deductible, the lower your car insurance rates because the company will have to pay out less money. While paying a deductible can seem like a large expense, chances are you will save more money by lowering your rates long-term.

How can you save on car insurance?

Once you determine how much car insurance you need, the next step is to find the lowest rates possible. There are several ways that you can decrease your rates and still acquire the coverage you need.

There are many factors that affect your car insurance rates. While some of those aspects are beyond your control, such as your age, there are other factors that you can manage.

For example, one of the most significant factors is your driving record. Avoiding accidents, tickets, and DUI infractions will help you obtain the lowest car insurance rates.

Another aspect that you can control is your credit score. Although a few states don’t allow the use of your credit score, most states still let insurance companies view your credit rating. Companies believe that a higher credit score means you are less likely to file a claim and are more willing to pay for damages yourself.

One of the best ways that you can maintain low rates is to take advantage of car insurance discounts. Most car insurance companies offer various reductions and even allow you to bundle them to save more money.

Multi-car, multi-policy, good driver, and continuous coverage discounts are just a few that are common. Be sure to request any discounts that you are eligible for to receive the most savings.

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Choosing the Right Coverage: The Bottom Line

Knowing how to choose the right auto insurance coverage can seem difficult, but determining the types of coverage available and assessing your situation will help you make a decision. Consider your financial situation as well as the type of vehicle you have when comparing coverage.

Also, you should do everything that you can to lower your rates once you determine how much coverage you need. Keep your driving record clean, your credit score high, and add car insurance discounts to save even more.

It’s important that you shop around to find affordable car insurance. Every company will offer different rates, coverages, and discounts so compare multiple policies to find your best deal.

Now that you know how to choose the right coverage, enter your ZIP code to compare car insurance quotes from companies near you for free.