What You Need to Know Before Buying Car Insurance
Buying car insurance can be confusing, but understanding the basics will help you make the best decision. Here’s what you should consider before purchasing a policy:
1. Understand the Different Types of Coverage
Car insurance includes several types of coverage, and knowing what each one does can help you choose the right policy:
✔ Liability Insurance (Required in most states)
Covers injuries and property damage you cause to others in an accident.
✔ Collision Insurance
Pays for damage to your car from accidents, regardless of fault.
✔ Comprehensive Insurance
Covers non-collision damage, like theft, vandalism, or natural disasters.
✔ Uninsured/Underinsured Motorist Coverage
Protects you if the at-fault driver doesn’t have enough insurance.
✔ Personal Injury Protection (PIP) / Medical Payments (MedPay)
Covers medical expenses for you and your passengers, regardless of fault.
2. Know Your State’s Minimum Requirements
Each state has different minimum liability coverage requirements.
However, the minimum coverage may not be enough to fully protect you, so consider higher limits.
3. Compare Multiple Insurance Quotes
Rates vary between companies, so shop around to find the best deal.
Get quotes from at least three different insurers.
4. Consider Your Deductible
The deductible is the amount you pay out-of-pocket before insurance kicks in.
A higher deductible lowers your premium but increases costs if you file a claim.
5. Look for Discounts
Many insurance companies offer discounts that can lower your premium:
✔ Safe driver discounts
✔ Bundling with home or renters insurance
✔ Good student discounts
✔ Low-mileage or usage-based discounts
6. Check the Insurance Company’s Reputation
Research customer reviews and complaint records.
Check their claim handling process—some companies are faster than others.
7. Understand Policy Limits
Your liability coverage limit determines how much your insurance will pay for damages.
If damages exceed your coverage, you’ll have to pay the rest out-of-pocket.