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Navigating the Maze: Finding the Best Auto Insurance for Your Needs

Auto insurance is a fundamental aspect of responsible car ownership. It provides financial protection in case of accidents, theft, and other unexpected events. However, with numerous insurance providers and policies available, choosing the best auto insurance can be a daunting task. In this comprehensive guide, we will explore the world of auto insurance, helping you understand the key factors that make an auto insurance policy the best for you. From coverage options and discounts to customer satisfaction and financial strength, we’ll equip you with the knowledge to make an informed decision.

Table of Contents

Understanding Auto Insurance

When you buy or lease a car, you should protect your investment. Purchasing auto insurance can provide reassurance in the event that you are involved in an accident or your vehicle is stolen, vandalized, or damaged by a natural disaster. Instead of paying out-of-pocket for auto accidents, customers pay annual premiums to an auto insurance company, which subsequently covers all or most of the costs connected with an accident or other vehicle damage.

What Is Auto Insurance?

Auto or car insurance is effectively a contract between yourself and an insurance company in which you agree to pay premiums in exchange for protection against financial losses stemming from an accident or other damage to the vehicle. Auto insurance can offer coverage for:

  • Vehicle damages, including your car or another driver’s vehicle
  • Property damage or bodily injuries caused by an accident
  • Medical bills and/or funeral expenses associated with injuries sustained in an accident

The exact details of what’s covered depend on the minimum coverage requirements for your state and any additional coverage options you choose to include. Every state except New Hampshire requires drivers to have a minimum amount of bodily injury liability coverage and property damage liability coverage.

In exchange for paying a premium, the insurance company agrees to pay your losses as outlined in your policy. Policies are priced individually to let you customize coverage amounts to suit your exact needs and budget. Policy terms are usually six- or 12-month timeframes and are renewable. An insurer will notify a customer when it’s time to renew the policy and pay another premium.

Regardless of whether they mandate having a minimum amount of auto insurance, nearly every state requires car owners to carry bodily injury liability, which covers costs associated with injuries or death that you or another driver causes while driving your car. They may also require property damage liability, which reimburses others for damage that you or another driver operating your car causes to another vehicle or other property.

A number of states go a step further, mandating car owners carry medical payments or personal injury protection (PIP), which reimburses medical expenses for injuries sustained by you or your passengers. It will also cover lost wages and other related expenses.

Uninsured motorist coverage reimburses you when an accident is caused by a driver who does not have auto insurance. Underinsured motorist coverage is designed to protect you when you’re involved in an accident with a driver who has some insurance but not enough to cover the full cost of a claim.

Types of Auto Insurance Coverage

Car insurance will not prevent you from getting into an accident, but it will help you pay for medical fees and repair costs later. The amount your policy will pay is determined on the type of automobile insurance coverage you choose and the limits you select.

Here’s an overview of the most common auto insurance options, what they cover, and when you might need them.

Liability insurance

If you cause a car accident, your liability insurance covers the other driver’s bills for any damage, injuries or even death. Almost every state requires this coverage for all drivers, and you’ll need proof of insurance to legally drive a new vehicle.

There are two types of liability coverage:

  • Bodily injury liability covers the medical expenses from an accident.
  • Property damage liability covers the repair costs to other vehicles, fences, mailboxes or buildings from an accident.

Your car insurance may pay only up to the limits included in your policy, and then you’re responsible for additional expenses from the accident. So if the property damage comes out to $52,000 and your liability insurance covers $50,000 of that, you’ll need to pay the remaining $2,000.

Personal injury protection and medical payments coverage

Personal injury protection, or PIP, and medical payments coverage, or MedPay, cover your medical expenses after a car accident no matter who was at fault. They also cover medical expenses for injured passengers if you were the at-fault driver.

Personal injury protection, sometimes called no-fault insurance, may also cover funeral costs, child care or lost wages due to injuries from an accident. PIP or MedPay is required by law in 17 no-fault states.

Uninsured and underinsured motorist coverages

Uninsured motorist coverage pays for expenses that result from an uninsured driver hitting you. This could be more important than you might expect because about 1 in 8 drivers didn’t have car insurance in 2019, according to a 2021 study by the Insurance Research Council. 

Underinsured motorist coverage, on the other hand, pays when the at-fault driver’s insurance limits are too low to cover all of the injuries or damage they caused.

Some states require a minimum amount of uninsured or underinsured motorist coverage. Here are four coverage types that might be required:

  • Uninsured motorist bodily injury coverage, or UMBI, pays for medical expenses caused by an uninsured driver.
  • Uninsured motorist property damage coverage, or UMPD, pays for repair expenses caused by an uninsured driver.
  • Underinsured motorist bodily injury coverage, or UIMBI, pays out if the cost of injuries and repairs is more than an at-fault driver’s bodily injury liability limits.
  • Underinsured motorist property damage coverage, or UIMPD, pays for repair costs that surpass the at-fault driver’s property damage liability limits.

Collision and comprehensive coverages

Collision and comprehensive insurance are optional in every state, but they may be required in certain situations, like if you financed or leased your vehicle. The limit on these coverage types is the value of your car at the time of the wreck, and those limits pay to fix your car or pay out its value if it’s stolen or damaged beyond repair.

Collision insurance pays for damage to your car after an accident, regardless of who was at fault. It will also pay for damage to your car from hitting a pothole or an object like a pole or tree.

Comprehensive insurance pays out if your car is stolen or damaged by anything other than a car accident. That includes damage from storms, floods, falling objects, explosions, earthquakes, vandalism or hitting an animal (deer, raccoon, armadillo, etc.).

Comprehensive and collision coverage generally come with a deductible, which is an amount you’ll have to cover before your insurer pays anything. Choosing a higher deductible means your premium will be lower. But because that payout is limited by your car’s value, comprehensive and collision might not make sense for older cars with little cash value, especially if you also have a high deductible.

Gap insurance

In most cases, a new car’s value can drop faster than the loan balance at first. If you total a new car that hasn’t been paid off, gap insurance will cover the difference between what the car is worth and how much you still owe on your loan.

And if you’re leasing a car, the leasing company will require you to carry gap insurance.

You can choose from a variety of extra car insurance types to add to your policy. Most of these “extras” don’t cost much to add, but you may need to buy collision and comprehensive insurance to be eligible to buy other coverage types.

  • Rental reimbursement covers a rental car while your car is in the shop for a repair covered under an insurance claim.
  • Roadside assistance gets you help if you break down and need a battery jump or towing service, but it may be cheaper from a local towing company or auto repair shop.
  • New-car replacement insurance works a lot like gap insurance, which pays the value of a new car if yours is totaled in an accident.
  • Full glass coverage pays to repair or replace chipped or broken window glass.
  • Rideshare insurance covers you when you’re driving for a rideshare service such as Uber or Lyft. Most rideshare companies only cover you when you have a passenger or are heading to pick one up; rideshare insurance provides coverage for the time when you’re waiting between fares.
  • Mechanical breakdown coverage pays for repairs or replacement parts if your vehicle breaks down even if there is not an accident or external cause of damage.
  • Custom parts and equipment value coverage will repair or replace modifications to your vehicle, like a new stereo system or those sweet, sweet spinner rims.
  • Classic car insurance covers repairs on classic or antique cars. It will also insure your vehicle for its full appreciated value.
  • Business or commercial auto insurance covers you when you’re using your vehicle for commercial or small-business purposes.

Legal Requirements and Minimum Coverage

Although insurance companies would not offer you a policy with less coverage than the state-mandated minimum coverage level, it is still a good idea to check your state’s minimum coverage auto insurance standards. Also, if you desire greater financial protection, you may always buy more coverage than you need. To save money on auto insurance, most insurance professionals advocate receiving quotes for different coverage levels before settling on the bare minimum of coverage available in your state.

The table below includes the minimum car insurance requirements in all 50 states and Washington, D.C.

StateBodily injury liability and property damage liabilityUM/UIM, PIP and MedPay
Connecticut25/50/2525/50 UM/UIM
Delaware25/50/1015/30 PIP
Florida$10,000 PDL*$10,000 PIP
Hawaii20/40/10$10,000 PIP
Illinois25/50/2025/50 UM
Indiana25/50/2525/50 UM; 50 UIM
Kansas25/50/2525/50 UM/UIM
$4,500 PIP
Maine50/100/2550/100 UM/UIM
$2,000 MedPay
Maryland30/60/1530/60/15 UM
Massachusetts20/40/520/40 UM
$8,000 PIP
Michigan50/100/10Six PIP options: minimum $50,000 for insureds on Medicaid
Minnesota30/60/1025/50 UM/UIM
$40,000 PIP
Missouri25/50/2525/50 UM/UIM
Nebraska25/50/2525/50 UM/UIM
New Hampshire**25/50/2525/50 UM
$1,000 MedPay
New Jersey25/50/25***25/50 UM/UIM
$15,000 PIP
New Mexico25/50/10None
New York25/50/1025/50 UM
$50,000 PIP
North Carolina30/60/2530/60/25 UM
30/60 UIM
North Dakota25/50/2525/50 UM/UIM
$30,000 PIP
Oregon25/50/2025/50 UM/UIM
$15,000 PIP
Pennsylvania15/30/5$5,000 PIP
Rhode Island25/50/25None
South Carolina25/50/2525/50/25 UM
South Dakota25/50/2525/50 UM/UIM
Utah25/65/15$3,000 PIP
Vermont25/50/1050/100/10 UM
Washington, D.C.25/50/1025/50/5 UM
West Virginia25/50/2525/50/25 UM
Wisconsin25/50/1025/50 UM

Most insurance professionals recommend higher policy limits than the minimums required by law for greater financial protection, and you may need full coverage depending on your situation. Car insurance is designed to protect your finances from the fallout of vehicle accidents, so having a policy that fits your needs — even if it’s more expensive than the minimum requirements — may save you from financial devastation should the worst happen.

The Importance of Choosing the Right Auto Insurance

While auto insurance is not required in New Hampshire, drivers must demonstrate their ability to cover the costs of an accident in which they are at fault. The majority of drivers have auto insurance because it is required by law, but that doesn’t mean you should only get the absolute minimum. Purchasing auto insurance offers many advantages.

  • Pay Now and Save Later: You and your family might be shielded against significant costs by having auto insurance. You can assist prevent future expensive bills by making a small investment now in your own protection. In the event of an accident, policies with collision, comprehensive, property damage, and bodily injury coverage can assist in defraying the cost of high-priced claims.
  • Protect Yourself and Others: Having the proper auto insurance can help keep you, your loved ones, your passengers, and other drivers safe. You want to be sure you have the appropriate coverage in case of an accident to handle any potential expenditures for property damage or physical injuries. Get a price for auto insurance online or contact an agent right now to find out how you can better safeguard your loved ones and yourself.
  • Save Time and Hassle: After a car accident, the aftermath can be extremely time-consuming and irritating. If you have the right insurance, you can avoid handling the costs of fixing or replacing your car as well as haggling with other drivers and property owners who were involved in the collision. Many of these hassles can be avoided with good auto insurance. A quality auto insurance policy can assist with towing, replacement and repairs of the vehicle, and paying for damages to other drivers. After you file a claim on your auto insurance, the insurance provider can assist in handling the procedure and provide you with support.
  • Peace of Mind: Everyone is prone to error. But occasionally, a driver’s error might affect you. You can be sure that you’re safe in the event that you are struck by an uninsured or underinsured motorist if you have the appropriate kind of auto insurance.
  • Supplement Your Health Insurance: You might be able to get assistance from car insurance to cover medical costs that health insurance typically won’t. Dental care and other medical costs incurred as a result of an auto accident can be partially reimbursed by a decent auto insurance policy.

Consider these simple tips to choose the ideal car insurance for your valuable asset:

  1. Don’t Rely Solely on Dealers: Many car owners, to avoid complications, trust dealers and buy car insurance at inflated prices. However, it’s not mandatory to purchase insurance from the dealer. You have the freedom to choose between online and offline options. Dealers might entice you with supposed “extra benefits,” but you can find similar benefits from trusted insurers online or through platforms like metassure.ai.
  2. Understand Your Needs: Before investing in four-wheeler insurance, understand your budget and desired coverage. Assess whether you need only third-party coverage or a comprehensive plan. Consider your specific requirements before making a decision.
  3. Thoroughly Compare Plans: Take advantage of the online platform to compare insurance plans from different providers. Evaluate coverage, inclusions, exclusions, add-ons, deductibles, and discounts before finalizing your choice.
  4. Choose Add-ons Wisely: While add-ons enhance coverage, they also come with extra costs. Select add-ons judiciously based on your new car’s needs. Essential add-ons for a new car include Zero Depreciation, Roadside Assistance, Engine Protect Cover, and NCB Protect cover.
  5. Know Your Insurer: Assess the credibility of your insurer by checking their claim settlement ratio (CSR). A higher CSR indicates a higher amount of settled claims. Look for a CSR exceeding 90%. Consider factors like Incurred Claim Ratio, discounts, cashless facilities, and network garages.

Avoiding Common Pitfalls

Follow along to learn about eight common auto insurance mistakes when you’re buying or maintaining coverage—and how to avoid them.

1. Not Shopping Around

One of the biggest mistakes that can put a dent in your budget is not shopping around for auto insurance.

The Insurance Information Institute recommends getting quotes from at least three auto insurance companies when you’re looking for coverage. This allows you to compare coverage apples-to-apples and find the best deal that meets your coverage needs.

2. Underestimating Coverage Needs

You might think that buying only the minimum coverage mandated by your state or required by a lender or leasing company is sufficient. You may want to rethink that, though. Buying the bare minimum amount of coverage might not offer enough protection. For example, Texas requires motorists to carry at least $30,000 in liability coverage for each injured person, up to a total of $60,000 per accident, and $25,000 for property damage per accident.

But would that be enough to ensure that your finances aren’t drained if you’re involved in a crash? Minimum coverage might not be enough to cover costs if you’re at fault in an accident, such as legal bills you might pay if another driver sues you.

Keep in mind, too, that if you took out a loan or lease for your car, the lender or leasing company will typically require you to purchase comprehensive and collision coverage.

3. Overinsuring Your Car

Underestimating your insurance needs can be costly. But so can overestimating them.

For example, let’s say you own an old car that’s not worth a lot. The Insurance Information Institute suggests looking into dropping comprehensive and collision coverage for that car, given that the premium cost might outweigh the benefits. Work with an insurance agent to get recommendations on the coverage that will be right for your individual needs.

4. Overemphasizing the Cost of a Policy

While price certainly is an important factor when buying auto insurance, it’s not the only factor.

For instance, you should check out the reputation of a car insurance company that you’re considering and review its track record for customer service. Also, you should study the discounts that an auto insurer provides. You may find that one insurer offers more or better discounts than another, or better customer service when you’re in an accident, making paying a little extra per month worthwhile.

5. Overlooking Life Changes

It’s understandable: Your teenager just got their driver’s license and is now getting behind the wheel of your SUV, but you forget to tell your insurance company. If your teen driver got involved in a crash and wasn’t covered by your policy, you could face steep financial challenges.

This and other big life changes should always warrant a call to your car insurance company. And the consequences of making the call can be good. For instance, you might see your premium go down if you get married or relocate to a lower-crime neighborhood.

6. Picking the Wrong Deductible

Let’s say you want to save money on your auto insurance coverage, so you decide to go with a higher deductible of $1,000 instead of a lower deductible of $500. Unfortunately, a higher deductible could put you in a financial bind. The deductible is the amount of money you must come up with out of your own pocket when you file a claim.

So, if you’ve got a $1,000 deductible, you may be able to trim your premium. But if you file a claim, the insurer will subtract that $1,000 from your payout. On the other hand, a $500 deductible would mean just $500 less in your claim check.

7. Lying on Your Application

Your parents probably taught you that lying is wrong. This definitely holds true when you’re filling out an auto insurance application, such as providing a phony address to score a lower rate.

If an auto insurance company finds out that you lied on your application, it might:

  • Cancel your policy
  • Reject your claim
  • Bump up your premium
  • Pursue fraud charges against you

8. Not Exploring Discounts

If you’re not digging into the discounts you may qualify for, you could be throwing money out your car window. Discounts you should check into include:

  • Good student discount
  • Good driver discount
  • Discount for insuring at least two vehicles with the same company
  • Bundling discount for buying two types of coverage, such as auto and home insurance, from the same company
  • Low-mileage discount
  • Discount for driving a car with certain safety features
  • Other discounts, such as senior discounts, discounts for certain professions and the like

While you may not qualify for any discounts from your insurance company, not asking and missing out on savings is worse than asking and being told no.

Factors to Consider When Evaluating Auto Insurance Providers

When selecting an auto insurance provider, there are numerous aspects to consider. Making a pick might be difficult due to the variety of coverage options, as well as the cost and customer service. However, selecting the correct insurance provider is critical for safeguarding yourself and your vehicle in case of an accident. Below, we will go over the major criteria to consider while selecting a vehicle insurance provider.

1. Coverage options: The first thing to consider when choosing an auto insurance provider is the coverage options. You want to make sure that the provider offers the coverage you need for your specific situation. For example, if you have a new car, you may want to consider a provider that offers comprehensive coverage. On the other hand, if you have an older car, you may be able to save money by opting for liability coverage only.

2. Price: Price is always an important factor when making a purchase, and auto insurance is no exception. While you don’t want to sacrifice quality for price, you also don’t want to overpay for coverage you don’t need. It’s important to shop around and compare quotes from different providers to find the best deal.

3. Customer service: Another key factor to consider when choosing an auto insurance provider is customer service. You want to make sure that the provider has a good reputation for handling claims and providing support to customers. Reading reviews and talking to friends and family members who have experience with different providers can help you get a sense of their customer service.

4. Discounts: Many auto insurance providers offer discounts for things like safe driving, multiple cars, and bundling with other types of insurance. Make sure to ask about any available discounts when comparing quotes from different providers.

5. Financial stability: Finally, it’s important to consider the financial stability of the auto insurance provider. You want to make sure that the provider will be able to pay out claims in the event of an accident. Checking the provider’s financial ratings and reviews can give you an idea of their stability.

Overall, choosing an auto insurance provider requires careful consideration of several factors. By doing your research and comparing quotes, you can find the provider that offers the best coverage, price, and customer service for your needs.

Types of Auto Insurance Coverage

Although many of the top auto insurance companies offer a variety of coverage packages, it may be easier to comprehend your policy if you divide it into two categories: compulsory and optional.

Read Also: What Are The Best Tax Saving Investments?

Liability insurance, which includes bodily harm and property damage, is almost always required. Personal injury protection (PIP) and uninsured or underinsured motorist coverage may also be required under your state’s minimal requirements. Personal vehicle coverage, including as collision and comprehensive coverage, is optional, but you may be obliged to have it if you finance or lease your vehicle.

To be liable means that you are legally or financially responsible for something. In the case of car insurance, liability refers to damage and injuries that you cause with your vehicle. There are two types of liability offered on most standard car insurance policies: bodily injury and property damage. You may also have the option to purchase uninsured and underinsured motorist coverage.

Bodily injury liability (BI)

Bodily injury liability coverage may pay for the other party’s medical bills if you’re deemed at fault in an accident. Most often, your insurance company will write bodily injury on a per person, per accident basis. For example, you may see $25,000/$50,000 listed under bodily injury on your auto policy. This means you have $25,000 of bodily injury coverage per person, with a maximum of $50,000 per accident.

Property damage liability (PD)

Property damage liability coverage pays to repair the damage you cause to others’ property — not your own — in an at-fault accident. Your insurance company will probably write this as a single limit. For instance, you might see $25,000 under your property damage coverage on your auto policy. This means you have $25,000 worth of coverage to repair something you hit, such as another car, a pole, a house or another stationary object.

Uninsured and underinsured motorist bodily injury coverage (UM/UIM)

Uninsured motorist coverage and underinsured motorist coverage are two different coverage options, but they are frequently listed together on your auto policy. Uninsured motorist coverage and underinsured motorist coverage pay for your medical bills and other damages if another driver hits you and they don’t have any or enough bodily injury liability to cover your medical expenses, respectively. This coverage may also apply if you are the victim of a hit-and-run. These coverage options may or may not be mandatory, depending on your state.

In addition to the liability insurance that may be required by your state, you may want to consider other optional coverage types for your vehicle, such as collision and comprehensive, especially if your vehicle is newer or more valuable. The following coverage types are not mandated by law, but if you have a loan or lease on your vehicle, your lender will likely require them.

These coverage types also have a deductible, which is the amount you agree to pay out of pocket in the event of a covered claim. Insurance would kick in to help pay the rest. The higher the deductible, the lower your premium for that particular coverage (and vice versa). Depending on your state’s insurance laws and the particular coverage type, deductibles can be as low as $0 or as much as $2,500 — or more. Some lending institutions may put restrictions on how high of a deductible a policyholder can carry for as long as the vehicle has a lease or lending agreement.

Collision (COLL)

Collision coverage pays for the damage to your vehicle regardless of who is at fault in an accident. Unlike the liability coverage options, collision doesn’t have a written limit. Instead, it will cover up to your vehicle’s value after depreciation, also called the actual cash value or ACV.

Comprehensive (COMP or OTC)

Comprehensive coverage pays for the damage to your car resulting from acts of nature (such as hail, wind and floods), fire, theft, vandalism, falling objects and hitting an animal. Comprehensive also covers your windshield. Like collision, comprehensive carries a deductible. However, in some states, policyholders have the option to have a separate glass deductible for windshield replacement. Glass deductibles may be lower than the comprehensive deductible and could be as low as $0.

Uninsured motorist property damage (UMPD)

Uninsured motorist property damage pays to repair the damage to your vehicle if someone hits you and they don’t have insurance. In some states, uninsured property damage is mandatory. In others, it’s not offered or is optional. UMPD can have a maximum payout limit and a mandated or limited deductible option. Also, many states require the driver of the uninsured vehicle to be identified for the coverage to apply, meaning it is often not an option for hit-and-run accidents.

In addition to the main coverage categories supplied by most automobile insurance companies, several insurance firms provide additional miscellaneous auto insurance coverage options. Some of the coverage options described below may only be available if you currently have comprehensive and collision insurance. Your state’s insurance laws may also limit the availability of certain auto insurance coverage options. However, these types of automobile insurance coverage are usually reasonably priced add-ons that can help round out your policy.

Medical payments coverage (MPC or MedPay)

Medical payments coverage is typically offered as an optional coverage (although it is required in a few states, like Maine) that pays towards medical bills for you and your passengers, no matter who is at fault in the accident. This coverage is written on a per-person basis, and the coverage limit usually ranges from $1,000 to $10,000. Additionally, medical payments coverage may apply if a vehicle hits you as a pedestrian.

Personal injury protection (PIP)

Personal injury protection (PIP) is similar to medical payments coverage in that it pays for you and your passengers’ medical bills no matter who’s at fault in the accident. It can also cover necessary expenses that medical payments do not, such as child care or household services. Although this coverage isn’t available everywhere, PIP coverage could be mandatory if you live in a no-fault state.

Gap insurance

Gap insurance is an optional coverage that you may be able to purchase when financing or leasing a new vehicle. As a vehicle ages, it tends to depreciate in value. This depreciation can sometimes cause you to owe more money on your car than it’s worth. In this instance, gap insurance could step in to pay the difference if your new vehicle is totaled in a covered loss or stolen and unrecoverable. This coverage type is typically only available for vehicles less than three years old.

The types of auto coverage you choose to carry are determined by your specific needs. To comply with the law, you must carry the minimum limitations set by your state. However, most insurance pros recommend carrying higher liability limits to help safeguard your funds. If you’re in an at-fault accident and simply have the bare minimum of coverage, you could end up paying thousands of dollars (or more) out of pocket.

If you’re financing or leasing, you’ll most likely be required to get comprehensive and collision coverage. Lenders frequently have limits on how high you may set your deductible. However, as long as you match your state and lender criteria, you have the choice of coverage choices like emergency roadside assistance and gap.

Understanding Auto Insurance Discounts

Here are the most common car insurance discounts and the companies that offer them.

Driver history discounts

If you consider yourself a responsible driver and have steered clear of traffic tickets, chances are your insurer will reward your good driving behaviors with discounts.

  • Accident-free or ‘good driver’ discount

Most insurers will offer a discount if you’re a “good driver.” The definition of a good driver varies but generally means not having any accidents or traffic violations in the past three to five years.

  • Defensive driver discount

You may receive an auto insurance discount if you complete a defensive driving course, which teaches you tactics to become a safer driver (e.g., leaving enough space between cars to avoid an accident). In some cases, though, only drivers 55 or older qualify for this discount.

  • Telematics discount

All 10 insurance companies we evaluated encourage shoppers to sign up for a telematics program, sometimes promising significant savings. Telematics is a technology that lets insurers track your driving behaviors in real time through an app or device that plugs into your car’s diagnostic port.

If you don’t mind being tracked by your insurer and consider yourself a safe driver (avoiding speeding and hard braking, for example), then a telematics program may help lower your premium. However, it can just as well raise it: 40% of consumers who have tried a telematics program saw their rates increase as a result, according to TransUnion’s Insurance Trends and 2023 Outlook Report.

Affiliation discounts

Your job, school or clubs you’re associated with could help lower your car insurance bill.

  • Alumni or membership discounts

Some insurers grant special car insurance discounts for alumni from certain universities, Greek life alumni and members of professional organizations like the American Library Association.

  • Military and federal employees discount

If you’re a federal employee or you’re in the armed forces, a veteran or related to someone in the military, you may qualify for a discount.

Vehicle-related features discounts

While new cars, cars with safety add-ons and electric vehicles can have high price tags, you can help offset the cost with a discount from your insurer. You might need certain insurance coverage to qualify, though, like MedPay or personal injury protection, and the discount may apply to those portions only.

  • Alternative energy discount

An environmentally friendly vehicle like an electric car can save you money on gas and insurance. Some carriers, like Travelers, will give you a discount regardless of whether you own or lease.

  • Anti-theft devices discount

Anti-theft devices can save you money on car insurance in addition to helping you feel safer. Multiple companies offer car insurance discounts for having protective devices like alarms or steering wheel locks.

  • New car discount

Many companies have discounts if your car is 3 years old or newer. You might have to meet specific criteria. For instance, Allstate stipulates that the car must be the current or previous year’s model, and you must be its first owner.

  • Safety equipment discount

In many cases, carriers will offer small insurance discounts for vehicles with anti-lock brakes, dual airbags or other safety features.

Personal traits discounts

Car insurance discounts aren’t always based on your driving history or vehicle. You could earn one for getting good grades or owning a home.

  • Good student discount

Most insurers offer discounts to full-time students who earn good grades (typically at least a B average). However, age restrictions vary by carrier. For example, Nationwide offers this discount to students ages 16 to 24.

  • Homeowner discount

Do you own a house? You could earn a car insurance discount, even if you don’t buy homeowners insurance from your auto insurer.

  • Student away-at-school discount

Students at college who leave their cars behind will naturally be driving less than usual. Because of this, certain insurers offer a discount. Requirements vary by company but usually include a minimum distance to the school and age limits. For example, Progressive requires drivers to be in school 100 miles away from home and be 22 or younger to qualify.

Personal traits discountsCompanies offering insurance discount
Good student discountAllstate, American Family, Farmers, Geico, Liberty Mutual, Nationwide, Progressive, Travelers.
Homeowner discountFarmers, Liberty Mutual, Progressive, Travelers.
Student away-at-school discountAmerican Family, Farmers, Liberty Mutual, Progressive, Travelers.

Customer loyalty discounts

Insurers reward loyalty with discounts for longtime customers and those who have multiple policies or cars insured under the same policy.

A word of caution about loyalty discounts: Some auto insurers use a practice called price optimization to charge loyal customers higher rates because they’re less likely to switch companies. That’s why it’s so important to compare car insurance rates, even if you’re receiving a loyalty (or other) discount. Your final rate may still be higher with a loyalty discount at your current insurer than with another company.

  • Loyalty discount

Some insurers reward drivers who continue to renew policies with them.

  • Multiple cars discount

Most insurers offer this discount if you have multiple vehicles insured with their company. Certain companies, such as Progressive, let you add cars you don’t own to your policy, so long as the vehicles are parked at your address.

  • Multiple policy (bundling) discount

This discount applies if you buy more than one policy from the same insurer. For example, you might qualify when you get home and auto insurance from the same company. You can usually bundle a wide range of products, from boat to RV to renters insurance.

Customer loyalty discountsCompanies offering insurance discount
Loyalty discountAmerican Family, Travelers.
Multiple cars discountAmerican Family, Farmers, Geico, Liberty Mutual, Progressive, State Farm, Travelers.
Multiple policy (bundling) discountAllstate, American Family, Farmers, Geico, Liberty Mutual, Nationwide, Progressive, State Farm, Travelers.

Policy-related discounts

Policy-related car insurance discounts are some of the easiest to qualify for. They are earned based on how you buy and pay for your policy.

  • Automatic payments discount

Do you have trouble remembering to pay your bills? Switching to automatic payments could score you a discount and solve any worries about forgetting to pay on time.

  • Early shopper discount

As long as you don’t need insurance right away, you may be able to get an early shopper discount. To qualify, some insurers require getting a quote with them before your current policy expires. Others want you to get a quote a full seven days before your new policy goes into effect.

  • Paid-in-full discount

While it’s not always easy to pull off, you could earn a discount for paying your entire policy upfront, whether it’s a six-month or yearlong policy. If you need to cancel your policy later, most insurers will refund you for any remaining months’ worth of premiums left on your policy. Just make sure to confirm these details with your company before paying in full.

  • Paperless discount

One of the easiest ways to earn a discount is by switching to electronic statements, which eliminates getting a monthly bill in the mail.

Policy-related discountsCompanies offering insurance discount
Automatic payments discountAllstate, American Family, Farmers, Liberty Mutual, Nationwide, Progressive.
Early shopper discountAllstate, American Family, Liberty Mutual, Travelers.
Paid-in-full discountAllstate, American Family, Farmers, Progressive, Travelers.
Paperless discountAllstate, American Family, Farmers, Liberty Mutual, Nationwide, Progressive, Travelers.

How to Maximize Discounts and Savings

Insurance discounts aren’t always straightforward. Just because one company has an accident-free discount after three years doesn’t mean the next company will have the same guidelines. Follow these tips when looking at auto insurance discounts.

  • Ask about discounts

You don’t need to wait until you renew your policy to see whether you’re eligible for a discount on auto insurance. Review the discounts on your company’s website, and ask a company representative or your agent whether you qualify. You should always talk to a representative to confirm available discounts because terms can change and discounts aren’t always automatically applied.

  • Consider overall premium cost, not just discounts

Although discounts can save you money on your car insurance, remember to look at the overall cost and not just the number of discounts you receive. For example, a company that offers no discounts could end up providing a lower car insurance premium than another insurer that charges a higher premium and offers 20 discounts.

  • Shop around

To find the best price and company for you, shop around for car insurance quotes at least once a year. Comparing rates from three or more companies will help you find the lowest premium. When shopping around for quotes, you may even be provided with a list of auto insurance discounts you qualify for.

Comparing Auto Insurance Quotes

Drivers around the country are seeing an increase in car insurance rates. Many of the factors are beyond your control, such as the rising number of deadly car accidents on the road or the frequency of natural disasters and their impact on auto insurance claims. However, you may reduce the impact on your financial account by comparing auto insurance prices to choose a policy that matches your budget.

Comparing auto insurance quotes is the greatest method to be sure you’re receiving the best deal on something you’ll almost certainly need. However, while most insurers consider the same elements when determining pricing, each has its own “secret sauce” for calculating rates. That is why two vehicle insurance companies may charge vastly different prices for the same motorist.

It’s hard to determine which factors have the most impact on your car insurance rate because each company weighs those factors differently. We can tell you what most of those ingredients are, but there’s no way to know which is the most important with a particular insurer.

So, to help you find the best price for the insurance you want, we can show you average annual rates for minimum and full coverage car insurance. To narrow it down even further, we’ve collected average rates for drivers with various driving experiences and credit histories in every state and for every major auto insurance company.

Your age can have a big impact on your car insurance rate. For example, you might already know teen drivers have some of the highest car insurance rates on average, but they aren’t the only ones. Although your rates will likely decrease once you hit your thirties, most drivers tend to see higher rates once they reach their 70s.

Below are the average costs of full and minimum coverage, by age, for drivers with good credit and a clean driving history.

AgeAverage cost of full coverageAverage cost of minimum coverage

While rates may double for some drivers with poor credit, know that every company considers credit differently. An insurance company may evaluate your credit differently depending on which state you live in.

Drivers with poor credit insured by Geico or Nationwide could pay less than 40% more a year, on average, compared with similar drivers with good credit. Meanwhile, State Farm’s average price for full coverage more than triples for drivers with poor credit compared with those with good credit.

Below you can compare average full coverage rates for 35-year-old drivers with poor credit by company.

CompanyDrivers with good creditDrivers with poor credit
American Family$1,791$3,076
State Farm$1,976$7,289
*USAA is only available to military, veterans and their families.

Comparing auto insurance rates after a crash shows how differently insurers treat accidents. For example, rates for car insurance from State Farm are less than 30% higher on average for drivers with an at-fault accident compared with a driver with a clean record. Meanwhile, our data shows rates for Geico and Farmers are close to 60% higher on average for drivers with a recent crash compared with our base profile.

Below you can compare average full coverage rates for 35-year-old drivers with a recent at-fault accident by company.

CompanyDrivers with a clean recordDrivers with a recent at-fault accident
American Family$1,791$2,642
State Farm$1,976$2,488
*USAA is only available to military, veterans and their families.

Choosing the Best Auto Insurance Provider

Almost every state requires drivers to carry at least a minimum amount of auto insurance, but drivers can purchase additional coverage for added safety. The firm you choose, the policy types you select, and the coverage levels you acquire are all unique to your scenario. Every driver has unique requirements, but insurance companies also have varied capabilities. When looking for the finest vehicle insurance provider for your specific needs, there are various things to consider, and the importance of each one varies depending on what you require as an individual.

These tips might help you manage the car insurance shopping process.

1. Determine your unique needs

To choose the best car insurance company, you must first determine your unique needs and financial situation. Evaluating your circumstances may help narrow down the selection of carriers and help you focus on one offering the coverage options you need.

For example, if you are a defensive driver, you might want to look for a carrier with a telematics program. These programs track your driving and may reward safe habits with a personalized discount. As long as you drive safely, this could help mitigate the rising car insurance rates that many drivers are facing.

Households with teen drivers might want to seek insurance providers with discounts or programs geared specifically toward young adults. If you prefer to keep your insurance as simple to manage as possible, finding a company that offers numerous products could help you bundle more policies together. There are endless combinations of personal criteria for an auto insurance company, and understanding your unique perspective could help you figure out which companies to research more deeply.

2. Find insurance providers that match your priorities

Once you know your needs, you can begin seeking out insurance companies that might align with your circumstances. You may find that some of the largest car insurance companies, which may be available across much of the country, could be good options. Or you might opt for smaller car insurance companies, which tend to be more regional. Choosing between small and large insurers can come down to personal preference; smaller companies may offer more personalized and localized service, while larger companies may have more policy options, 24/7 customer service and more self-service options.

Researching the companies that offer coverage in your area can help you ensure your carrier aligns with your needs. If finding a cheap car insurance company is one of your priorities, you may want to spend some time analyzing discounts. Most companies offer at least a few auto insurance discounts but finding a carrier that has several savings opportunities that you qualify for might help you control your premium.

3. Check trusted third-party ratings

You can use verified third-party ratings available to take the guesswork out of finding companies with strong customer service and financial strength ratings. Using third-party data in your research provides a more well-rounded approach to choosing a provider and gives you unbiased data for your review.

Customer satisfaction rankings, such as those from J.D. Power, provide independent, unbiased ratings regarding the experience with popular car insurance providers. AM Best is another example of a third-party company that further analyzes an insurance carrier’s performance. Specifically, AM Best reviews a carrier’s historical financial health and strength, which may give you peace of mind if a carrier has a track record of paying claims.

4. Consider digital tools and customer resources

Another aspect worth considering in your search is how you will interact with a company once you’re a policyholder. Some people may want to use a mobile app or online portal, while others prefer speaking to representatives over the phone or visiting a local agent.

If you like to handle things digitally, for example, choosing a company with a robust digital app that lets you pay bills, request changes and file claims could lead to your continued satisfaction with company interaction. Wanting digital tools and choosing a company that doesn’t offer an app or online portal could lead to dissatisfaction.

Some companies may have customer resources available that make them outshine other carriers. For example, AAA has a robust roadside assistance program that not only offers coverage when you break down, but has other perks, like insurance discounts and DMV services. Amica’s extensive coverage options provide unique add-on opportunities like free lock replacement and credit monitoring services. Comparing features beyond price and coverage can help you identify which company is best for your needs.

5. Compare insurance quotes based on coverage

The average cost of car insurance can vary drastically from one carrier to another based on a variety of rating factors, including the type of vehicle you drive, your driving history and the specific coverage you choose. Comparing carriers highlight the difference in rates, but it also shows which carriers offer the coverage options and discounts you are looking for based on your needs.

When gathering quotes, use the same coverage choices, limits and deductibles across all carriers. This can provide a true rate comparison to determine which company will offer the best price for the coverage you need. If you compare a minimum coverage policy with low liability limits from one company to a full coverage policy with higher liability limits from another, the lower coverage company may appear cheaper, even though it may not be for the higher coverage options.

If you aren’t sure how much car insurance you need, working with an insurance agent can be helpful. A licensed insurance agent can listen to your situation, understand your circumstances and recommend appropriate coverage types and levels. Once you are confident in the coverage types and levels you need, you can match those levels across all the quotes you request. Keep in mind that some companies may not offer certain endorsements, so you might not be able to get your quotes exactly the same.

Most states need you to get a car insurance coverage that meets or exceeds your state’s minimum auto insurance requirements in order to lawfully drive your vehicle. However, because state minimum coverage does not cover your own vehicle, you will most likely be compelled to purchase a full coverage policy — including comprehensive and collision — if you have a loan or lease on your vehicle.

Most insurance providers recommend that you purchase higher-than-minimum liability coverage in order to protect your funds from the consequences of accidents. If you’re unsure how much coverage you need, you can consult with an agent to establish the appropriate amount.

When applying for vehicle insurance, you may be able to reduce your premiums by keeping good credit. Many states enable insurance companies to include your credit-based insurance score when calculating your premiums. Checking your standard credit score—which is based on comparable data—can help you determine where your credit-based insurance score stands. Making on-time payments and paying off debt will help boost both credit scores.


Road accidents are prevalent and may occur not just as a result of your own negligence, but also owing to the carelessness of others. Whatever the reason of the accident, there is usually a loss of property, and in some terrible circumstances, lives are lost or permanently transformed as a result of injuries received during the accident.

Car insurance is the most effective approach to protect the driver, car owner, passengers, and pedestrians from the financial and legal consequences. There are various forms of automobile insurance to choose from, based on the level of protection you require.

Let’s look at the five most popular types of auto insurance policies in the country.

1. Third-Party Liability Only Cover

The Motor Vehicle Act 1988 mandates that every motorised vehicle on Indian roads should have a third-party liability only cover.  The “third-party” in third-party car insurance is any property, person, or vehicle that sustains damage due to the actions of the insured while driving their vehicle. This is one of the more affordable kinds of insurance for cars in the country, as the scope of its coverage is limited.

These are the incidents that will be covered under third-party liability only cover:

  • Damages to the third-party vehicle
  • Damages to the third-party property
  • cost of hospitalization and treatment of third parties
  • Liabilities arising out of the deaths of third parties

Third-party car insurance will not cover damages or losses to the insured’s vehicle due to an accident, damages or losses to the insured vehicle in case of a natural calamity, or theft of the insured’s car. 

2. Own Damage (OD) Cover

Under the collision damage cover insurance policy, the insured will be reimbursed for the cost of repairs to your damaged vehicle. The premium for these types of car insurance in India will be calculated based on the vehicle’s age and its insured declared value (IDV). The insured declared value of the car is nothing but its market value. 

In the event that the cost of damages to your vehicle exceeds the current value of the vehicle, the insurance company will pay the current market value of the automobile in question. For older vehicles, the collision cover can be as low as possible. You must buy coalition cover if there is a lien on your vehicle.

The most important thing to keep in mind when opting for these car insurance coverage types is that the insured will get compensation from the insurance company only in case of an accident. So a collision damage cover is great for those who live in accident-prone pockets of the country or in cities that have dense traffic flow.

3. Personal Accident Cover

A personal accident cover can protect the owner of the car in case of an accident by covering the medical expenses that are incurred after the accident. These types of motor insurance can also protect passengers and drivers from medical bills in case of an accident. The insurance company will take care of the medical expenses, regardless of whether the accident was caused by the driver of the insured vehicle or another party. In the event of a death due to the accident, the insurance company will pay a lump sum to the family that suffered the loss.

4. Uninsured Motorist Protection

When an accident occurs, the insurance of the person who caused the accident should cover the cost of damages to your vehicle. But what happens when the other vehicle’s owner does not have insurance? You would be forced to bear the cost of damages, right? This is where uninsured motorist protection comes in. These types of vehicle insurance

can protect the insured when the person who caused the accident does not have insurance. It can also come to your rescue when third-party insurance is not enough to compensate for the damages caused to your vehicle. Uninsured motorist protection will take care of both repairs to your vehicle and medical bills caused by the accident.

5. Comprehensive Car Insurance

As the name suggests, this is the most comprehensive type of car insurance you can choose for your automobile. The damage covered under a comprehensive insurance policy includes damage from third parties and damage to your own vehicle. It basically guarantees complete protection.

Even though the price of these types of car insurance can be higher than that of a third-party liability-only cover, the range of protection offered against all the risk factors that you can face when your vehicle hits the road is unmatched with these types of car insurance in India.

One such unmatched coverage provided by the comprehensive insurance plan is protection against theft which is a feature missing in other kinds of insurance. This insurance policy can also protect your vehicle from:

  • Natural disasters
  • Man-made calamities 
  • Fire
  • Terrorist activities 

Here are some of the scenarios a comprehensive car insurance policy will not cover:

  • Damages to the car due to drunk driving or driving under the influence of substances 
  • Damages the car incurs while driving without a valid driving license
  • Electrical and mechanical breakdown
  • Usage-related wear and tear 
  • Damages to the car due to illegal racing or speeding
  • Damages to the car due to rash driving
  • Damages incurred when on foreign soil 

Add-on Coverages

A basic comprehensive car insurance policy on its own offers more protection than third-party car insurance. But here is another great advantage to opting for a comprehensive car insurance policy. You can choose add-ons, which can further protect your automobile. With add-ons, you can customise this type of car insurance in Indiato suit your specific needs, as the basic version of the comprehensive car insurance policy may not address it. 

Here are some of the most sort after add-ons when it comes to a comprehensive car insurance policy:

  • a. Roadside assistance cover

A great road trip can come to a grinding halt when unforeseen issues, such as flat tires, dead batteries, or even a mechanical failure, happen. This is when an add-on like a roadside assistance cover can come in handy. Thanks to this add-on, you will be able to get assistance 24/7, even when your vehicle decides to act up in a remote location. 

  • b. Zero depreciation cover

Also known as a “nil depreciation cover”, you can use this type of add-on when your car suffers damage. When certain parts of your car need to be replaced, insurance companies will not compensate you for the entire cost of the repairs involved. They will account for the depreciation of the parts and compensate you accordingly. But if you take the zero depreciation cover add-on, you will get the entire cost of the repairs. Your car will have to be less than three years old for you to qualify for zero depreciation cover.

  • c. Key replacement cover

This is a nifty add-on for those who tend to be forgetful. Replacing a car key when you’ve misplaced it or when it’s been stolen/damaged can be a very expensive affair. But with the key replacement cover, the cost of repairing the key and lock set or even replacing a key will be fully covered by the insurance company.

  • d. No claim bonus protection

Most insurance companies tend to reward the insured with a no-claim bonus discount on the insurance premium when it comes time to renew the policy when a claim isn’t made against it for that year. Since the nature of road accidents is so unpredictable, you may not get to enjoy a no-claim bonus. If you get the no-claim bonus protection, you can still get the no-claim bonus discount even if you have made a claim. 

  • e. Return to invoice cover

This type of add-on can help you recover the total cost of your car as per the car’s invoice value in case it gets stolen or is damaged beyond repair.

  • f. Engine protection cover

The engine is the beating heart of your car. And it is a very expensive part to repair. The engine protection cover can cover charges related to the repair or replacement of the engine, gearbox, and differential that may happen due to certain reasons, like water logging or leakage of lubricating oil etc.

  • g. Consumables cover

In most cases, consumables such as lubricants, screws, washers, air conditioning gas, engine oil, etc. are used during repair. The cost of these consumables is not reimbursed by insurance companies under a basic comprehensive car insurance policy. A consumables cover add-on will ensure that you don’t spend out of pocket on these consumables. 

Though there are other forms of vehicle insurance available, the best one to choose is comprehensive car insurance, which provides more bang for your buck despite being more expensive than state-mandated third-party auto insurance. At the end of the day, driving puts you at danger, therefore having decent vehicle insurance will help you feel at ease while on the road because you will be prepared for any situation.

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