Car insurance coverages, explained one line at a time
A car policy is several coverages stacked together. Some pay people you injure, some pay for your own vehicle, and your state decides which ones you cannot skip.
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A car policy is several coverages stacked together. Some pay people you injure, some pay for your own vehicle, and your state decides which ones you cannot skip.
By Checkngocash Editorial TeamUpdated 2 sources How we make money
The short version
Liability pays for harm you do to other people. Repairs to your own car come from collision or comprehensive, which the law does not demand.
Price depends on your record, address, age, mileage and vehicle, so a quote only means something next to others with identical limits.
A loan or lease can bring its own insurance rule, so collision may be mandatory for you even where the law says otherwise.
What each line of the policy pays
The building blocks of a car policy
Coverage
Pays for
Mandatory?
Bodily injury liability
Injuries that you cause to other people
Set by your state
Property damage liability
Damage you cause to other people's property
Set by your state
Collision
Damage to your own car after it hits something
Not by law. A lender or lessor may insist
Comprehensive
Fire, severe weather, vandalism, floods and theft
Not by law
Uninsured motorist
Your protection when the other driver carries no insurance
Set by your state
Medical payments, rental, towing and labor
Optional extras
The NAIC lists them as optional, so confirm locally
Drawn from the NAIC consumer guide. Your state and your own policy wording control the detail.
Three accidents, three different payers
You rear-end someone. Liability pays the other driver's loss up to your limits. If you carry collision, it fixes your car once you pay the deductible.
Hail dents your parked car. Comprehensive is the line that answers, provided you bought it.
An uninsured driver wrecks your car. Collision or uninsured motorist property damage cover responds, and a deductible still applies.
What pushes the price up or down
According to the NAIC, claim frequency has the largest effect on the rates insurers set. Insurers therefore look for clues about how often you might claim, such as:
Your driving history
Where the car is kept
Your age, gender and marital status
Whether you held insurance before
How many miles you drive in a year
The make and model
Lining up quotes so they can be compared
Copy your current numbers
Read them off your declarations page. With no policy yet, choose limits and deductibles first.
Request identical cover everywhere
Same limits, same deductibles, same drivers. If any of those differ, you are comparing two different products.
Name the discounts
The NAIC suggests asking about multiple vehicles, driver education, good student and safety devices.
Verify who is selling
Your state insurance department can confirm that the company and agent are licensed there.
Financing a vehicle?Run the loan payment first, then add your insurance quote to see what the car costs each month.Open the auto loan calculator
Three pages to read next
Cheap car insurance shows where savings are real and where they cost you protection.
Full coverage unpacks a label that has no fixed definition.
Car insurance by state lists the questions to put to your own state.
Questions people ask
How much car insurance is enough?
Never less than your state requires, plus whatever a lender or lessor adds. Past that, picture a serious crash and ask what you could pay without help.
Does the law require collision?
According to the NAIC, no. Your loan or lease contract may still require it.
Does a policy pay for flood damage to the car?
It can when you carry comprehensive, since the NAIC counts floods among its causes. Confirm in your own policy wording.
Who can answer my coverage questions for free?
Your state insurance department. The NAIC says each one has staff to answer auto coverage questions.
Checkngocash is not an insurer and not an insurance agent. What cover costs, and what it includes, depends on your state and on the company that writes the policy.
