How to choose car insurance coverage
Choosing the right car insurance coverage starts with understanding your personal needs, including your risk level and what you can afford to pay out-of-pocket if something goes wrong. Auto insurance coverage limits that are enough for one person might be too low for someone else, and you might want to add options someone else doesn't need.
That's why it's important to get to know the different types of car insurance, what’s required by law, and what additional coverage is available. You'll also want to calculate insurance specifically for your vehicle and the way you use it. If you work at home your needs are different from someone who commutes daily.
Insurance.com's car insurance coverage calculator will help you find the right car insurance coverage and estimate costs. While getting the cheapest car insurance rate is a top priority, you don't want to be underinsured. Not having enough coverage can be a lot costlier in the long run. Answering a few quick questions can help you find the best car insurance coverage for your situation and compare car insurance cost for the right coverage levels.
How to calculate car insurance coverage and estimate costs
The car insurance coverage calculator and cost estimator is a short questionnaire. You'll enter:
- Your ZIP code
- A few basics about your financial situation
- Make, model, and age of your vehicle
- Your chosen deductible
- Whether you own, lease or finance your vehicle
- What's most important to you: price or coverage
After answering a few questions, the calculator will provide a car insurance coverage recommendation specifically for you and help you estimate auto insurance costs. You'll gain insights on coverage you should consider adding for better protection as well as the coverage you could go without to save money.
The calculator shows both the cheapest rates and the plan with the most coverage, so you can compare your options. You might find the additional coverage is more affordable than you think.
How much car insurance do I need?
How much car insurance you need depends on a lot of factors. You need to carry at least state minimum, but there are other things to consider. If you have a loan or lease, you’ll have to meet lender requirements. That means you'll need to select the full coverage car insurance calculator option for either a leased or financed car. And then you need to look at your particular needs as well as your budget.
The car insurance calculator recommends the right level of car insurance coverage for you. This coverage can include:
- Liability insurance
- Uninsured/underinsured motorist coverage
- Comprehensive and collision
- Personal injury protection and medical payments
- Gap insurance
- Roadside assistance
- Rental reimbursement
Some of these coverages are required by law, some are required by a lender, and others are always optional. Read on for more details on each coverage and the recommended levels.
| The coverage | Basic policy | Recommended coverage | Best coverage |
|---|---|---|---|
| Bodily injury/Property damage liability | State minimum | 100/300/100 | 500/250/500 or maximum available |
| Uninsured/underinsured motorist | State minimum or no coverage* | 100/300/100 or match liability limits | 500/250/500 or maximum available |
| Personal injury protection/Medical payments | State minimum or no coverage* | Add the option* or increase above state minimum | Maximum available |
| Comprehensive | None | Add coverage, $500 deductible | Add coverage, lowest deductible |
| Collision | None | Add coverage, $500 deductible | Add coverage, lowest deductible |
*where not required by law
What auto insurance coverage is required?
What car insurance coverage are you required to have? Here's what state laws may require as well as additional loan or lease requirements.
These coverages may be required by state law:
Liability insurance covers damages you cause to others in an auto accident and is required by law in most states. Bodily injury liability pays for injuries to the other driver or their passengers. Property damage liability pays for damage to another person’s car or other property such as a fence.
Your state will have minimum requirements you must carry for liability, but experts recommend you carry higher limits. 100/300/100 is the commonly recommended limit. Higher limits don't usually cost much more but give you a lot more protection. Remember if your limits are exceeded in an accident you're on the hook for any remaining costs -- and medical bills can add up quickly.
Personal injury protection (PIP) and medical payments (MedPay) may both be required if you live in a no-fault state. PIP pays your medical costs regardless of who is at fault, and you will file the claim directly with your insurance company. A few tort states also require these coverages.
Uninsured/Underinsured motorist coverage is required in some states as a way to cover damages if the at-fault party was uninsured or underinsured. In most states that don't require it, you can still add the coverage to your policy if you desire. Like liability, there are two types of coverage available: bodily injury and property damage.
These coverages may be required if you have a loan or lease:
Comprehensive and collision coverage both pay for damage to your vehicle. Collision will pay for damage to our car in an accident regardless of fault, including single-vehicle accidents. Comprehensive (often called comp) covers your vehicle for "other than collision" events like theft, fire, and damage from weather events like flooding and hail.
Comprehensive and collision are not required by any state law. However, if your car is financed or leased, the company will require you to carry both. There is no limit for these coverages; rather, the most your insurer will pay out is the current value of your vehicle if it is totaled in an incident. Both coverages have a deductible, which you can select, and you don’t need to buy both together, although most people do.
Gap insurance is not required by law, but may be required by your loan or lease agreement. It protects you if you owe more than your car is worth. If your car is a total loss and the insurance payout is less than what you owe, gap insurance will pay the difference. It may also be called loan/lease payoff insurance by some companies.
What car insurance coverage is optional?
These coverages are always optional but may fit your needs.
Roadside assistance provides coverage if your car has a flat tire, your battery dies, you lock yourself out, or for many other emergency needs. It will also cover towing your vehicle if it breaks down.
Rental reimbursement coverage will pay for a rental car if you need one while your car is being repaired. It applies only to repairs under a covered claim, and not if your car is in the shop for maintenance or other repairs. If you don’t own a second car, this is good coverage to have.
Rideshare coverage is an add-on you may need if you drive for a rideshare company like Uber or Lyft. It will cover the gap between the rideshare company’s coverage and your personal coverage.
If you want more liability coverage that what your auto and homeowners insurance provide, you can purchase umbrella insurance. This is not a type of car insurance coverage but is a separate policy. Umbrella insurance kicks in when your home or auto liability limits are exceeded. Umbrella policies typically start at one million dollars of coverage and go up from there, and are generally recommended to those with a lot of assets to protect.
As you go through the car insurance calculator you’ll get personalized recommendations for your auto insurance coverage based on your answers.
Car insurance cost estimator
After determining the best car insurance coverages for your needs, it's time to shop around to find the best price. Insurance companies' rates will vary depending on what coverages, limits, and deductibles you choose. Rates will also vary based on your driving record and other rating factors that are specific to your current situation. That means comparing multiple companies is the best way to get affordable car insurance.
Factors that affect car insurance rates include:
- Age and gender
- Location
- Driving history, including tickets and accidents
- Claims history
- The age, make, and model of your vehicle
- Credit score
- Coverage levels
Some states don’t allow the use of age, gender, and credit for car insurance rates. You can estimate car insurance rates right along with our coverage recommendations in the calculator to get an idea of how much car insurance should cost for you.
Just choose the option to compare car insurance rates from top car insurance companies side-by-side. You can then take the next steps to purchase your chosen policy.
You can also view rates by age, rates by state, and rates by company. With all of these ways to estimate and compare costs, you should have a good idea of what you should be paying. However, the best way to really determine what your premium will be is to get rate quotes and see who is offering you the cheapest rates at this point in time.
How to calculate car insurance rates before buying a car
When you're shopping for a car (whether it's new or used), it is essential to compare car insurance rates at the same time. You don't want to find the perfect car only to find out you can't afford the insurance.
You can estimate car insurance by using our rates by car tool to get an idea of the average rate in your state for the vehicle model you're considering. Once your car choices are narrowed down, compare actual rate quotes for you. You can buy your new car confident that you’ll get the coverage you need at the best price.
Remember to check our car insurance calculator to make sure you are getting the recommended auto insurance coverages for your vehicle. You don't want to miss out on vital protection for your vehicle by skipping coverage.