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UPDATED: Mar 13, 2020
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When the time comes to purchase car insurance, informed shoppers who have an understanding of insurance can improve their odds of getting the best deals. Insurance coverage types and amounts vary, and starting with the legally required limits for a driver’s state of residence sets the foundation for insurance needs. Deciding the amount needed to protect a person’s assets is the next question to answer!
Drivers will want to have enough insurance to protect them and their families, and to cover the loss or damage of personal property, injury and possible death for themselves and others who they may have an accident with.
What is Full Coverage Car Insurance?
Full coverage refers to the combination of a liability policy, along with a comprehensive and collision component of auto insurance. Additionally, some states legally require drivers to carry personal injury protection and uninsured motorist coverage as well.
Liability insurance is the legally required minimum insurance in each state. It consists of three components, with the first two covering bodily injury and the third covering property damage. Liability insurance covers other peoples’ property damage, bodily injuries or death that happens in an accident the insured is at-fault for. Liability insurance will also pay for legal defense if the other person involved in the accident decides to sue. In case of a serious accident, a person will want to have enough insurance to cover a legal judgment against them without jeopardizing their personal savings or other assets.
Bodily injury liability insurance does not cover the policy holder or others on her policy, or damage to the policyholder’s vehicle. It does cover bodily injury for the other party involved in accidents. For example, a liability policy state its limits as 15/30/10. This translates into $15,000 of bodily injury coverage per person in one accident, $30,000 bodily injury coverage total per accident, and $10,000 coverage for personal property damage per accident. If drivers choose liability insurance with low limits, they take financial risk because any damages that exceed the limits of the insurance policy become the responsibility of the insured. In this case, the insured may need to liquidate savings, property or their future earnings might be attached, to pay the expenses from the accident.
This insurance covers the policyholder’s vehicle and pays for damage or loss from any other incidents that happen besides a collision. The state does not usually require it. If a vehicle gets damaged by flood or fire, if it is stolen, if animals damage it or a tree branch falls on it, comprehensive insurance will cover it. To keep insurance costs lower, policyholders may want to set the deductible as high as they can afford on this portion of their policy, to balance the amount they can save on insurance payments against the amount of money they would be willing to pay out-of-pocket in case of damages. Leased or financed vehicles usually require comprehensive.
This coverage takes care of damages when a person’s car is hit by another vehicle, or hits another vehicle or object. For those with older cars, it may not make sense to carry this coverage, depending on the value of the car as weighed against the cost of carrying the insurance. As with comprehensive coverage, raising the deductible will help lower the cost of this type of coverage, but the policyholder should weigh it against the amount of money they can pay out-of-pocket. Collision is usually required if driving a leased or financed car.
Other types of coverage exist, and in-fact some states require them. Uninsured motorist is one that some states require, and it covers the driver, passengers and other insured members of his household for any bodily injury, damage or death caused by a hit-and-run or other uninsured driver who has been determined at fault. A variation of this is underinsured motorist bodily injury coverage, which covers the gap between and at-fault, underinsured driver who inflicts injuries, damages or death upon the insurer, his passengers or members of his family. The policy can also include uninsured/under-insured property damage coverage to pay for damage sustained as a result of an accident with an uninsured/underinsured driver.
Personal injury protection is mandated in certain states although not available in every state. It covers medical, hospital and funeral expenses, regardless of who caused the accident, for the insured, his relatives in the same home, any passengers or authorized drivers, and also covers them if they get hurt while riding in another person’s car, and in some states if they get hit by a car while a pedestrian.
Other add-ons exist for additional medical payments coverage, work loss coverage, rental car reimbursements, accidental death benefits and towing and labor.
Each state regulates its own auto insurance, and requirements vary somewhat from one state to another. Every state except New Hampshire requires liability insurance, although Florida only requires partial liability coverage. Some states, such as Massachusetts and Minnesota, require personal injury protection as well as uninsured motorist coverage, which tends to drive up the cost of insurance a bit in those states. Some states also have very high limits for liability insurance; for example Wisconsin has limits of 50/100/55, and Maine and Alaska each have limits of 50/100/25. Since Florida does not require full liability coverage, the state’s liability limit requirements are lower, at 10/20/10.
Shopping for Full Coverage Car Insurance
Shopping for insurance has never been easier since many insurance companies now have a presence on the Internet. Quotes can be had from some companies online, in as little as six minutes. Since so many factors can affect insurance rates, from a driver’s geographic location, age, gender, to his personal driving history and choice of car, taking the time to shop around and get quotes from several insurance companies will pay off. Since each insurance company uses its own internal statistical models and assigns different weights to various factors, rates may vary substantially. Additionally, with the competition between insurance companies, many offer several different types of discounts on policies and usually have information on their websites about each discount and how to qualify for it.