Insurance
Auto Insurance: What It Covers and How to Compare
Most auto policies bundle several coverages with different limits and deductibles. Understanding each one makes apples-to-apples comparison much easier.
What auto insurance covers
Liability
Pays for injuries and property damage you cause to others. Required in nearly every state. Commonly written as three numbers (e.g. 100/300/100) for bodily injury per person, per accident, and property damage.
Collision
Pays to repair or replace your vehicle after a collision, regardless of fault. Often required if you finance or lease.
Comprehensive
Pays for non-collision damage: theft, vandalism, fire, hail, falling objects, animal strikes, and similar events.
Uninsured / underinsured motorist (UM/UIM)
Helps cover your injuries and damages if you're hit by a driver who has no insurance or too little coverage. Some states require it; others make it optional.
Medical payments / PIP
Helps cover medical expenses for you and your passengers regardless of fault. Personal Injury Protection (PIP) is required in no-fault states.
Deductibles
Apply to collision and comprehensive. Common choices range from $250 to $2,000. Higher deductibles lower premium but increase what you pay at claim time.
Factors affecting rates
- Driving record (accidents, tickets, DUI).
- ZIP code, garaging address, and state regulations.
- Age, marital status, and (in many states) credit-based insurance score.
- Vehicle make, model, year, and safety features.
- Annual mileage and primary use (commute vs. pleasure).
- Coverage limits, deductibles, and endorsements.
- Continuous prior insurance vs. lapses in coverage.
How to compare quotes
- Use identical coverage limits and deductibles across carriers.
- Ask each carrier for the same endorsements (rental, roadside, gap).
- Confirm whether the quote includes available discounts (multi-policy, paid-in-full, telematics, good student).
- Look beyond price: claims service, financial strength, and digital tools matter long-term.
Do I need full coverage?
If you finance or lease, the lender usually requires collision and comprehensive. If you own an older vehicle outright, liability-only may be enough.
Will my rate go up after a claim?
Often, yes — especially for at-fault accidents. Some insurers offer accident forgiveness for the first incident.
What is gap insurance?
It pays the difference between what you owe on a financed/leased vehicle and its actual cash value if it's totaled. Most useful in the first few years of a loan or lease.
Does insurance follow the car or the driver?
Generally, the car. If you let a licensed driver borrow your vehicle, your policy is usually primary.
Explore insurance options tailored to your criteria
Based on your location, household details, coverage needs, property information, vehicle information, or family goals, Finance Choices can help you compare relevant insurance options from partner providers.
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