Types of car insurance: A Guide

Every state has different laws and every different driver 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
• Comprehensive and collision
• Gap
• Uninsured motorist
• Personal injury protection and medical payments

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.

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 to even higher levels, usually 100/300/50.

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.

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 theft- or disaster-prone area and drive an older car.

TALK TO OUR INSURANCE EXPERTS

Speak with insurance experts and ask questions before finalizing your plans or if you want help regarding our services. Our dedicated staff is more than happy to call and guide you.

The #1 Insurance Site

We offer insurance by phone, online and through independent agents. Prices vary based on how you buy.

*National average annual car insurance savings by new customers surveyed who saved with Americans First Insurance in 2017.

Americans First Insurance Home Advantage® policies are placed through Americans First Insurance Specialty Insurance Agency, Inc. with affiliated and third-party insurers who are solely responsible for claims, and pay PSIA commission for policies sold. Prices, coverages, privacy policies, and PSIA's commission vary among these insurers. How you buy (phone, online, mobile, or independent agent/broker) determines which insurers are available to you.

Discount varies and is not available in all states or situations

**Annual premium for a basic liability policy excludes travel trailer and is not available in all states.

††Annual premium for a basic liability policy excludes travel trailer and is not available in all states. No. 1 specialty RV insurer from 2016 Millward-Brown national survey data. RV insurance not available in DC or HI, and Travel Trailer insurance not available in MA.

A leader in boat insurance from 2016 Millward-Brown national survey data.

No. 1 commercial auto insurer from SNL Financial’s 2015 national written premium data.

Savings based on 2015 consumer data collected by Hagerty on single car policies, with premiums $5000 and under, from several daily driver ("Everyday") auto insurance carriers.

Learn more about comparison rates, which are available through Americans First Insurance Direct® in most states and situations. Rate comparisons provided here are based on our Americans First Insurance Direct auto insurance price and product, and do not include prices and products available from Americans First Insurance agents.

Name Your Price® is available in most states for new policies. Price and coverage match limited by state law. Amounts entered outside of our range of coverage prices will be shown the closest available coverage package.