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How to Choose the Right Car Insurance Policy for your Automobile

Updated on August 28, 2012

If you live in the United States and drive a vehicle, you are required to have that vehicle insured. Each state will have its own set of laws as to what type of insurance you are required to have. Most states minimum insurance policy will require an individual to have liability insurance. Some states will require medical insurance as part of the policy as well. When looking for car insurance it is important to know what type of coverage you need in order to keep yourself safe. This article will look at the different types of car insurance policies available and how to choose the type that you need.

Liability Insurance

A liability car insurance policy is the very basic form of car insurance. Liability insurance policies will cover a person should they hit another vehicle. Liability insurance coverage will only pay for damage that is done to the other person’s car. If involved in an accident with only liability coverage the damage done to your car will not be paid for. Of course, this is only if the accident is stated as your fault. If the accident is the other person’s fault it will be their insurance that will have to pay for all of the damages incurred.

Collision Insurance

Collision insurance is exactly what it sounds like; it will protect your vehicle if it is involved in a collision with another vehicle. If you are involved in any type of car accident a collision insurance policy will pay for the damages to your vehicle minus the deductible amount you have chosen. Once again this type of coverage only comes into play if the accident you are involved in is determined as being your fault.

Comprehensive Coverage

If you are financing or leasing your vehicle, most companies will require you to carry a comprehensive insurance plan. This type of coverage should also be used by someone who is driving a vehicle that is in exceptional condition or is new. Comprehensive insurance plans will cover your vehicle from damages other than collision. This includes such things as hitting an animal or tree, damages from natural disasters such as storms and also protects your vehicle if it is stolen or vandalized.

Uninsured Motorist Coverage

While it is required by law for people to carry insurance on any vehicle that they drive, there are some people who simply do not abide by this rule. Obtaining a uninsured motorist policy will protect you if you are involved in an accident with someone who does not have any form of car insurance in place. The amount of money this insurance policy will pay will be determined by the maximum amount set on your policy when you choose your insurance plan.

How to Choose the Right Insurance Plan

Looking for the right car insurance policy can be overwhelming. There are so many different types and on top of that thousands of companies to choose from. There are a few things that you should consider when looking for car insurance.

First, determine the deductible amount that you can afford to pay if something were to happen to your vehicle. The higher the amount of the deductible, the lower your premiums will be. It is important to stick with an amount that you truly would feel comfortable paying should you be involved in an accident.

The next decision will be to determine if you need liability insurance only or a comprehensive insurance plan that includes collision insurance. The type of policy that you need will be directly related to the type of car that you drive. If you drive an older vehicle it may not be worth the amount of money that a comprehensive insurance plan would cost. However, if you have a lease or loan on your vehicle it is likely going to be required that you carry a full coverage insurance policy.

Choosing Your Insurance Company

The best way to find an insurance company is to compare quotes from several different companies. Using the internet is the simplest way to go about this. Most insurance companies have their own websites that you can visit and obtain a quote from. There are also comparison websites that will allow you to enter your information once and receive quotes from several different companies at once. This is the best way to compare different policies and determine which one is the best one for you.


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    • wolfee profile image

      wolfee 6 years ago

      getting car insurance is confusing. However, with all of the new comparison websites that are available, it makes it a bit easier. The first step is determining what kind of insurance you need and go from there.

    • texasgirlfw profile image

      texasgirlfw 6 years ago

      I find choosing car insurance so confusing. I have been with the same company for about 8 years and I am too confused to changed. I know I am paying too much.