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Types of car insurance: A guide

By Posted : October 12, 2018

Every state has different laws and every driver different needs, but the purpose of car insurance remains the same: to prevent financial disaster.

No policy will cover everything or make you financially whole in every case. But any car insurance policy you buy should protect the assets you own, shield you from crippling medical bills if you lack health insurance, and pay for the damage you do to other people and property.

Use the Insurance.com car insurance coverage calculator to get our recommendation of what coverage package and deductibles are best for you.

Car insurance coverage calculator>

Liability insurance

Liability insurance stands between you and a lawsuit when you are at fault in an accident.

No house and little or no savings? We recommend you purchase at least $25,000 per person/$50,000 per accident bodily injury coverage and at least $25,000 for property damage (usually expressed as 25/50/25). Some states require less -- but less will rarely cover all the bills. California, for example, requires just $5,000 for property damage liability, and most cars are worth more than that. You’re responsible for anything left over. But if you really can't afford anything but bare-bones coverage, your state minimum liability requirements will at least allow you to drive legally.

A house, a car, some savings?Leased your car? The more liability insurance you buy, the cheaper it gets. You’ll find that moving up to 50/100/50 for bodily injury and property damage coverage costs only a few dollars more a month. If you lease a car, you’ll be required to carry even higher levels, usually 100/300/50. And to be confident you are sufficiently covered, Insurance.com Consumer Analyst Penny Gusner recommends you get 100/300/100. 

Consider the following, based on Insurance.com’s analysis of rates from up to six major insurers for nearly all ZIP codes:

  • The nationwide average cost for state minimum liability coverage is $526
  • Increasing that coverage to $50,000/$100,000/$50,000 averages only $561. So, you only pay another $35 a year by increasing your coverage.
  • If you increase that to $100,000/$300,000/$100,000 with comprehensive and collision and a $500 deductible, that average goes up to $1,350, which is $824 more per year or $69 per month.

Teen drivers, a house, investments? Buy the highest limits available from your carrier, usually 250/500/100. Consider an umbrella liability policy on top of that if your net worth exceeds the highest available liability limits.


To give you an idea of how much common coverage levels cost, see our average yearly rate table below:

StateState minimumLiability 50/100/50100/300/100
Alaska$318$323$1,109
Alabama$419$432$1,299
Arkansas$397$416$1,370
Arizona$496$573$1,356
California$491$592$1,518
Colorado$506$544$1,404
Connecticut$761$868$1,771
DC$745$809$1,723
Delaware$805$904$1,646
Florida$884$930$1,823
Georgia$532$577$1,340
Hawaii$555$609$1,458
Iowa$294$323$1,015
Idaho$319$343$941
Illinois$383$403$1,004
Indiana$400$424$964
Kansas$397$427$1,242
Kentucky$745$793$1,752
Louisiana$705$831$2,190
Massachusetts$539$609$1,191
Maryland$710$748$1,390
Maine$359$364$925
Michigan$2,012$1,649$2,484
Minnesota$579$575$1,187
Missouri$409$457$1,154
Mississippi$398$425$1,323
Montana$323$356$1,224
North Carolina$347$383$960
North Dakota$363$372$1,315
Nebraska$329$344$1,113
New Hampshire$485$508$1,101
New Jersey$677$779$1,346
New Mexico$424$445$1,253
Nevada$623$768$1,746
New York$812$879$1,759
Ohio$383$381$952
Oklahoma$444$461$1,643
Oregon$690$702$1,264
Pennsylvania$480$526$1,522
Rhode Island$751$876$1,688
South Carolina$484$525$1,260
South Dakota$267$290$1,059
Tennessee$404$430$1,214
Texas$465$488$1,300
Utah$531$545$1,199
Virginia$372$409$972
Vermont$337$350$963
Washington$466$503$1,191
Wisconsin$373$415$1,351
West Virginia$493$545$1,375
Wyoming$339$360$1,494

Methodology:

Insurance.com commissioned Quadrant Information Systems to field rates from up to six major insurers in nearly every ZIP code of the country for three coverage levels. We’ve averaged rates here for state minimum liability limits and for $50,000 per person injured in an accident; up to $100,000 per accident, with $50,000 in property damage and for $100/$300/$100 with a $500 deductible, by state, for the driver profile of a 40-year-old male, 2016 Honda Accord, with good credit and no accidents.


Comprehensive and collision

Collision and comprehensive pay to repair or replace your car after an at-fault accident, theft, fire or other covered peril, minus your deductible.

If you have a loan or lease on the vehicle, your lender or leasing company will require you to buy collision and comprehensive.

If you own the car outright, the decision to drop comprehensive and collision is yours alone.

More than 90 percent of owners keep comp and collision on cars less than eight years old; that drops to less than 50 percent at 12 years old. We recommend you drop comp and collision when you would no longer make a major mechanical repair such as a new engine or transmission, getting rid of the car instead, but there are many different rules of thumb.

Deductibles can range from $0 to $2,500, but most drivers choose $500, an amount we recommend. A higher deductible may save you money, but it should never exceed an amount you can pay easily. Your car won’t be repaired until you’ve kicked in your share.

You typically cannot buy collision coverage without also buying comprehensive. You may be able to buy comprehensive coverage by itself – a good idea if you live in a theft- or disaster-prone area and drive an older car.

The average cost for collision per year is $526, comprehensive is $192, according to rate analysis by Insurance.com.


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