Why auto insurance matters
Auto insurance is legally required in most U.S. states and financially essential. It protects you from liability for injuries and property damage and helps cover repairs to your vehicle. The right coverage depends on vehicle value, loan/lease requirements, and your tolerance for risk.
Basic coverage components
- Liability — covers others’ injuries and property damage when you’re at fault.
- Collision — repairs your vehicle after an accident.
- Comprehensive — covers non-collision damage (theft, fire, weather).
- Uninsured/Underinsured motorist — protects you when the other driver lacks coverage.
Coverage comparison
| Coverage | Required? | Typical Use |
|---|---|---|
| Liability | Yes | Required to drive legally |
| Collision | No | Repair after crash |
| Comprehensive | No | Weather, vandalism, theft |
How to choose
If your car is new or financed, carry collision and comprehensive. For older vehicles, compare the cost of full coverage vs. potential repair/replacement — sometimes liability-only is more economical. Consider state minimums, but be aware those limits can leave you exposed in serious accidents.
Ways to lower premiums
- Bundle auto and home/renters insurance.
- Raise your deductible if you can afford the out-of-pocket cost.
- Take advantage of safe driving discounts and telematics programs.
- Compare quotes at renewal — insurers price risk differently.
FAQs
Will a ticket raise my rate?
Usually yes; a clean driving history reduces premiums over time.
Is gap insurance necessary?
If you owe more than your car’s value (loan/lease), gap insurance covers the difference if it’s totaled.