A Guide to Car Insurance Coverage: How to Choose the Right Options Without Overpaying

Selecting the right car insurance coverage is essential for financial protection and peace of mind. Let’s break down the primary options available to help you make an informed choice.

Reminder: Each state has specific requirements. Make sure your policy meets your state’s legal minimums before hitting the road.

Primary Car Insurance Coverage Options

There are three primary types of car insurance coverage: full coverage, liability only, and comprehensive only. Each includes a combination of liability, comprehensive, and collision coverage, with the option to add additional protections.

Let’s start by defining the core components of coverage

Liability: Covers property damage and/or injury expenses when you are found responsible for an accident. The limits on this coverage are determined per person and/or per accident.

• Protects others, not your vehicle

• Required in all U.S. states

• No deductible

Comprehensive (Comp): Protects your vehicle from non-collision-related damages such as falling objects (e.g., trees, rocks), theft, vandalism, and animal impacts. It also covers glass-only damages like windshield cracks.

• Protects your vehicle from non-collision damages

• Often required if you have a loan or lease

• Includes a deductible

Collision (Coll): Covers your vehicle for damages caused by colliding with another vehicle or object including a tree, pole, building, etc.

• Protects your vehicle from collision damages

• Often required if you have a loan or lease

• Includes a deductible

  
  

Coverage Types Explained

Now we’re ready to explore the types of car insurance available.

Full Coverage

Full coverage car insurance combines liability, comprehensive, and collision for the broadest protection. It is ideal for newer or financed vehicles.

Liability Only

Liability only includes liability coverage (and often uninsured/underinsured motorist and PIP). This is a cost-effective option for meeting legal requirements, especially for older, paid-off vehicles. Learn your state’s requirements here.

Comprehensive Only

Comprehensive only covers non-collision-related incidents like theft, vandalism, or natural disasters. This option is best suited for vehicles in storage since it doesn’t meet legal requirements for driving on public roads.

Additional Coverage 

Most policies also offer optional coverages that allow you to customize your protection.

Uninsured/Underinsured Motorist (UM/UIM): Protects you if you’re hit by a driver with little or no insurance, including hit-and-run scenarios. Required in some states.

Personal Injury Protection (PIP):  Covers medical expenses for you and your passengers, regardless of fault. Required in some states.

Roadside Assistance: Helps with towing and roadside services like jumpstarts, tire changes, and lockouts.

Rental Reimbursement: Covers the cost of a rental car while yours is being repaired after a covered loss. Does not apply to vacations or routine rentals.

Loan/Lease Gap Coverage: Helps cover the difference if you have a loan or lease amount exceeding your vehicle’s actual cash value after a total loss. Example: If you owe $13,000 on a car worth $10,000, this coverage can help with the $3,000 gap.

How to Choose the Right Car Insurance Coverage

Your ideal coverage depends on factors like vehicle value, whether it’s financed, and your financial comfort level. 

Here are some general guidelines:

• New or financed vehicles: Full coverage is often required by lenders, and an insurance policy is likely to cost significantly less than replacing the vehicle by yourself.

• Older, paid-off vehicles: Liability-only may suffice, but consider your ability to cover potential repairs.

• Stored Vehicles: Comprehensive-only can protect your vehicle from falling objects, weather, etc. while it is in storage. When you’re ready to take it out, you can easily add on liability and/or collision coverage.

Tip: Higher deductibles on comprehensive and collision can lower premiums but increase out-of-pocket costs in a claim. Choose your coverage selections and deductibles based on what you’re comfortable paying in an emergency.

Need Help Deciding?

We know choosing the right car insurance can feel overwhelming. Our experienced agents are here to guide you through the process, helping you understand your options and build a policy that fits your needs and budget. Contact Hillock Insurance today.