How To Choose Car Insurance In 4 Steps

Because there are so many companies selling car insurance, sorting through all the choices to find the right policy for you and your family can be a challenging task. With each carrier claiming to offer the best value, it's easy to feel confused. At first glance, all of the policies may look the same, but there are important differences you may need to consider. Your goal should be to find one that includes all the benefits you need at a competitive price.

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.

Liability And UM Coverage

In states without no-fault laws, you will need to purchase mandatory third-party liability coverage. This insurance protects you when you cause an accident and injure someone else or damage their property. Bodily injury liability insurance covers the other party's medical expenses, lost wages, rehabilitation expenses, pain and suffering costs, and more. Liability coverage can extend to passengers in your vehicle, those in other vehicles, and any injured pedestrians.

Choosing Policy Limits

When you choose the coverage components that you want to make up your car insurance policy, you will also choose the limits for each type of coverage. A limit is the maximum amount your insurance company will pay you out for a covered claim.

For example, if you have $15,000 worth of property damage liability coverage, and you get in an accident and cause $25,000 worth of damage to someone else’s vehicle, your insurance company will only pay you out $15,000 because that is your policy limit, and you’d be on the hook for the remaining $10,000.

Most Common Types Of Car Insurance

Liability Car Insurance

What It Covers: Other people’s medical bills and vehicle repairs after accidents that you cause. It does not cover any expenses for you or your passengers.

Who Should Get It: Drivers in almost every state are required to have liability insurance in order to drive legally.