What is basic car insurance coverage?

Basic car insurance needs vary depending on the driver and car being insured. If you drive a new or financed car, you need comprehensive and collision coverage for basic car insurance.

Free Car Insurance Comparison

 Secured with SHA-256 Encryption

Zaneta Wood, Ed.S. has over 15 years of experience in research and technical writing bringing a keen understanding of data analysis and information synthesis to reach a wide variety of audiences. She studied adult education and instructional technology at Appalachian State University as well as technical and professional communication at East Carolina University. Zaneta has prepared technical p...

Full Bio →

Written by

Joel Ohman is the CEO of a private equity backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Jo...

Full Bio →

Reviewed by Joel Ohman
Founder & CFP®

UPDATED: Jan 20, 2021

Advertiser Disclosure

It’s all about you. We want to help you make the right coverage choices.

Advertiser Disclosure: We strive to help you make confident car insurance decisions. Comparison shopping should be easy. We are not affiliated with any one car insurance company and cannot guarantee quotes from any single company.

Our partnerships don’t influence our content. Our opinions are our own. To compare quotes from top car companies please enter your ZIP code above to use the free quote tool. The more quotes you compare, the more chances to save.

Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.

Here's what you need to know...

  • The type of car insurance coverage you need is specific to the car you drive and the protection you feel is necessary
  • Most states require at least a minimum amount of liability coverage
  • If you are driving a new car — or if your car is financed — you will need to carry comprehensive and collision coverage

Before you randomly call up a car insurance company and attempt to guess what policy is right for you, you may want to do a little homework.

Ideally, you want the least amount of coverage, but the type of coverage that covers practically everything.

You need to know the different types of car insurance available. Then you need to know how to find the best rates on the coverage you need.

Enter your ZIP code for car insurance quotes from multiple companies.

What are the 3 Types of Car Insurance?


Do you know the differences between liability coverage, collision coverage, and comprehensive coverage? It is best to start with the basics.

  • Liability CoverageBasic coverage that legally protects you if you cause an accident and damage someone else’s car, property, or body. Usually, this type of insurance prevents a personal injury lawsuit and is required by law in most states.
  • Collision Coverage – Pays the price of your totaled car if there is a major collision involving two or more vehicles or a cash amount if there is a minor collision.

Collision coverage can be pricey as it has to cover the cost of a brand new car. Therefore, if you are driving a very old model that wouldn’t cost much to replace out-of-pocket, then you may want to skip this type of protection.

On the other hand, if you are still making hefty payments on that new car of yours, collision insurance is often required by the dealership or lender.

Free Car Insurance Comparison

Enter your ZIP code below to view companies that have cheap car insurance rates.

 Secured with SHA-256 Encryption

Free Car Insurance Comparison

Enter your ZIP code below to view companies that have cheap car insurance rates.

 Secured with SHA-256 Encryption

What are comprehensive car insurance options?

Comprehensive coverage is also critical, especially if you have a newer car. This coverage protects you against acts of nature, such as fire, flooding, hail, or other major catastrophes and against covers vandalism, theft, and incidental minor damage.

What is actually covered by comprehensive insurance varies from company to company.

If you are worried about something happening to your car other than a collision, this is the policy you want. It gives you peace of mind and confidence that you can park your car anywhere.

Other types of car insurance to consider include personal injury protection, rental car coverage, roadside assistance, and uninsured motorist coverage.

  • Personal injury protection (PIP) – Pays if you are hurt in an accident. Medical bills for both you and your passengers would be covered. If you have a hefty medical insurance policy, this auto coverage may not be required.
  • Roadside Assistance – Covers if your vehicle breaks down — whether that’s a flat tire, battery failure, or no gas. This coverage may be especially beneficial if your car is prone to breakdown or is older.
  • Uninsured/Underinsured Driver Coverage – Pays if the person who hit you is uninsured and unable to pay you. This type of insurance also covers those terrible instances of hit and runs and even those little dings and dents that mysteriously happen in parking lots.

Where to Find Car Insurance Options and Discounts


Now that you know the basic types of car insurance coverage, it is up to you to sit down and decide exactly what is needed and how much you can afford to spend on insurance each month.

No one wants to pay more than they have to, so be sure to look into any qualifying discounts. One of the best ways to save is to comparison shop online.

Getting multiple quotes from several insurance companies has never been easier than it is today! Look into local discounts such as good driver discounts, low mileage discounts, and safety feature discounts. If you are still young and in school then ask about the good student discount.

If you are a senior, you may want to check with companies such as AARP or even ask your provider if they offer any senior discounts or long-time customer discounts.

If you are going green, you can ask about a hybrid discount which is both good for the planet and for your wallet.

You now have a good foothold on basic car insurance options. Research your car and learn what the most practical coverage options are. Then, find a provider that is willing to work with you.

The peace of mind that comes with being properly insured is satisfying, but the fact of the matter is, being insured for a minimum amount of coverage is the law!

You can start looking for car insurance options right now using our comparison tool. Enter your ZIP code below to receive car insurance quotes from multiple companies today!

Free Car Insurance Comparison

Enter your ZIP code below to view companies that have cheap car insurance rates.

 Secured with SHA-256 Encryption

Average Monthly Car Insurance Rates by State