Nearly every state requires drivers to have, at minimum, liability insurance. When purchasing this coverage, you must buy a policy that meets your state's legal requirements. Generally, liability insurance provides coverage for any third party injured in an accident for which you are at fault. A liability policy has a maximum amount that is paid out per person injured and a cap on the amount paid out per accident. There is also an allowance for property damage per accident.
You also have the opportunity to purchase coverage beyond the basic required by your state. You decide which type of coverage is important for your situation. When you enter a quotes-searching website, it's important to remember that the quotes should be compared for equal coverage.
The following are common types of insurance:
- Collision coverage - this insurance covers damage to your vehicle that is caused by colliding with something other than another vehicle. It typically is used by drivers who hit deer or back-in to poles.
- Comprehensive coverage - you can protect against damage to your vehicle that is the result of an event other than a collision of any sort. If your car is damaged by severe weather or a tree limb falling on it, you can use this coverage to pay for repairs.
- Personal injury protection - if you are injured in a car accident, you can use this insurance to pay for medical bills. It also can be used to replace lost wages that result from serious injuries that prevent you from working.
- Uninsured/underinsured coverage - being involved in an accident caused by a driver without insurance can be financially devastating. With this coverage, your medical bills and repair costs are covered if the other driver does not have sufficient insurance. Without this coverage, you may need to sue the other driver to get compensation.
Depending on your situation, you may want to consider other insurance options, such as GAP (Guaranteed Auto Protection) or rental insurance. GAP coverage pays the difference between what the insurance company pays and what you owe to a lender if your new car is stolen or totaled in an accident. Determine what coverage is most advantageous before you request car insurance quotes so you get offers for the coverage you need.