Many people find the nitty-gritty of auto insurance to be at least boring and at best confusing. Here we’ll give you a quick car insurance review and try to clear up some of the basic terms you’ll see when shopping for an auto insurance policy.

When you buy an auto insurance policy, you are actually purchasing several different types of coverage within the policy. These can include liability, comprehensive and collision, among others.

First, let’s talk about why you need auto insurance.

Why You Need Car Insurance

The most important reason is that it’s the law! Every state requires either an auto insurance liability policy or proof of financial responsibility. This can get complicated as each state’s laws are different and unique and change each year.

The other reason to have auto insurance is for your own protection. If you cause an accident you must ensure you can cover the costs of the damage you caused. Insurance will help keep you from going bankrupt should something happen.

Lastly, insurance can help you to replace or repair your vehicle in the event of an accident. Depending on the value of your vehicle, this can save you lots of money.

Basic Types of Car Insurance

Most car insurance policies will include property damage liability and bodily injury liability coverage at a minimum. Other coverages fall under the optional category.

Mandatory Coverage

Liability – This is your basic coverage if you are involved in an accident. It covers the damage caused to the other person’s property or body. This type of coverage does not cover your own vehicle.

Optional Coverages

Collision – Collision covers the cost of damage to your vehicle whether or not you are at fault for the accident. If you are in an accident, your deductible will be taken out of the payments made.

Comprehensive – Comprehensive auto insurance essentially covers any other type of damage that occurs and is not covered under collision. This can include theft or vandalism, fire or weather damage.

Other optional coverages include roadside assistance or towing, rental car reimbursement and glass replacement.


A deductible is your contribution towards the cost of repairing or replacing your vehicle should you have an accident. If you agree to pay more of the share by way of having a higher deductible, you can lower the cost of your insurance policy.

Here is where you take a little calculated risk for yourself. With a higher deductible, you are saving money but will be paid less should something happen.

Deductibles generally range in increments from $250 to over $1000.

Shopping for Car Insurance

Shopping for car insurance is easier than ever with the help of the internet. Internet sites such as allow you to enter your information in one place and receive quotes from all the best auto insurance companies.

Remember, whether you are choosing state minimum coverage or full coverage auto insurance, understanding your options will allow you to choose the best car insurance for you and your family.