Although companies offer different options and more nuanced add-ons, the three main types of car insurance are reduced to:
- Liability coverage
- Collision coverage
- Full coverage
Civil liability coverage, required by law in most states, covers personal injury and damage to another driver’s property in an accident that has been found to be in default. It does not cover your injuries or property damage. Buying only liability insurance will always be your cheapest option, even if not necessarily the wisest. (Sometimes it only makes sense to bring liability coverage, and sometimes it is not).
You will probably see your liability coverage is written in the quote or in the auto insurance policy: $ 50,000 / $ 100,000 / $ 50,000 (or 50/100/50). This means you have $ 50,000 in personal injury coverage for each person, $ 100,000 in personal injury coverage and $ 50,000 in damage coverage. Each state requires its own minimum amount of liability insurance.
The purchase of the minimum is attractive, as it will keep the lowest possible rates. Unfortunately, this is a bad idea: a bad fall can mean that your costs will easily exceed the minimum state, and then you will have to pay. In North Carolina, for example, the minimum body injury is $ 30,000, but the average cost of a non-fatal self-destructive injury is greater than $ 60,000. If you have only minimal state coverage, you could end up paying over $ 30,000 in your pocket. And if you do not have that kind of money, your other resources become vulnerable.
Collision coverage covers the damage suffered by your car in an accident. Generally, this covers accidents when it is considered guilty, but it can also pay off under certain circumstances when another driver is in error or in scenarios not covered by other policies.
The cost of collision coverage will depend greatly on the value of your car, but you control the deductible, the amount you pay out of pocket before your insurance company collects the rest of the account.
True to its name, complete car insurance covers almost all the calamities related to the car you can think of, minus the damage resulting from an accident. Instead, global policies pay for things like car theft, damage from adverse weather conditions, or necessary repairs after a nighttime rendezvous with a disoriented deer.
Complete coverage is intended to complete the collision coverage, not to replace it. Like collision coverage, the cost will depend on your car, but you control your deductible.