Options for Car Insurance Coverage

Full coverage car insurance policies in the US include liability, collision, and comprehensive coverage. The average rates for full coverage are $79.58/mo.

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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...

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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...

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Reviewed by Joel Ohman
Founder & CFP®

UPDATED: May 12, 2020

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Here's what you need to know...

  • Liability insurance, or proof of financial stability, is required in every state in order for you to legally drive a car
  • If you only carry liability coverage, you may not be reimbursed for anything that happens to your own car
  • When searching for an insurance company, check their ratings and reviews online

There are two standard types of liability insurance: bodily injury and property damage.

Any material object can qualify as property, so just about any item that gets damaged in an accident can be submitted for an insurance claim, from a car to a fence to a house.

If you are liable for a piece of property, that means it is your responsibility to pay for the damage.

Get car insurance quotes from multiple companies in your area by entering your ZIP code above!

Property Damage in an Accident

Most states require everyone to carry liability insurance for both bodily injury and property damage.

To minimize lawsuits and to ensure victims of car accidents can be properly compensated, all 50 states mandate that some amount of liability insurance — or other proof of financial responsibility — must be obtained to legally drive a motor vehicle.

For a set premium, you purchase a set amount of liability coverage from a car insurance company.

If you are in an accident for which you are responsible, the insurance company will pay for the other party’s bodily injuries and property damage up to the amount of coverage you purchased.

If the damages from the accident exceed the coverage limitations of liability car insurance, then you are responsible for paying the difference.

It is usually recommended to carry more than the minimum state required coverage amounts to be sure you have sufficient coverage to cover the costs of an accident. Experts recommend liability coverage of 100/300/100.

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Collision Insurance for Property Damage

If you are at fault for an accident and you have liability coverage, then your car insurance policy will cover the other person’s property damages.

However, if the accident is your fault and you have liability insurance, your car insurance company will not reimburse you for any damages to your own property; you will have to pay for these damages out of your own pocket.

To have your own car covered by insurance for an accident, you need to buy collision insurance.

Collision insurance will pay you for damages to your property in an accident regardless of who is at fault.

If you have both liability and collision insurance, and you cause an accident, then your property and the other party’s property will be covered up to the limitations outlined in your policy.

Not Covered by Liability

There are times when you may experience property damage that is not the result of an accident. In these incidents, liability insurance is not applicable.

For example, if your car gets damaged in a shopping mall parking lot by a shopping cart or some kids key your car as they walk by it, liability insurance will not pay for your property damages.

If you find out who caused the damage, you may be able to legally pursue that party to pay for the damages, but these types of situations usually go unpunished.

Therefore, it is a good idea to buy comprehensive car insurance to pay for any property damages that occur to your car that are not accident-related.

Comprehensive Car Insurance Explained

With comprehensive car insurance, almost any non-accident property damage that occurs to your car will be covered by your car insurance. This includes the majority of incidents that are non-collision related, including fire or theft.

Most often, comprehensive insurance is sold as a package deal with collision insurance, but sometimes it can be purchased separately as well.

You can have a different deductible amount for the collision and comprehensive portion of your policy. For example, you may have a $250 deductible on your liability coverage but a $500 deductible on your collision or comprehensive insurance.

The higher that your insurance deductible is, the lower your premium will be, so raising your deductible can help you save money on your car insurance rates.

Just be sure to have enough money for the higher deductible put aside in case you need it in an emergency.

You have to carry liability coverage, and adding collision and comprehensive car insurance to your insurance policy gives you total car insurance protection.

Whether you are at fault for an accident and have to pay for someone else’s property damage, or someone else damages your property unbeknownst to you, by having total car insurance you can greatly minimize your own out-of-pocket costs.

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What insurance company offers the best property and casualty insurance?

This is a tough question to answer because some of what makes an insurance company considered “good” to an individual is entirely subjective. However, you can find a list of the top rated insurance companies by consumers on J.D. Power.

You can also do further research on these companies by visiting the Better Business Bureau’s website or by going online and reading user forums as well.

There are many things you need to consider when choosing an insurance company.

For example, a good financial rating is important as this helps to determine a company’s ability to pay its claims. You can use companies like A.M. Best to check the financial rating of virtually any car insurance company.

These financial sites also offer a prediction regarding the future ratings for the company based on the financial trends of the company and of the insurance industry as a whole.

Compare the costs of car insurance from different car insurance carriers by simply entering your ZIP code below now!

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