You can compare different types of auto insurance coverage by looking at who receives the payout, the specific damages covered, and whether your state laws or loan agreements require the policy. Choosing the right auto insurance safeguards your financial well-being, provides peace of mind and ensures you meet all legal driving requirements.
To compare your options and secure the ideal policy, review our breakdown of standard coverages and follow this guided evaluation strategy below.
Jump to:
- The Core Types of Auto Insurance
- 6 Steps to Evaluate Auto Insurance Policies
- Frequently Asked Questions
The Core Types of Auto Insurance
| Coverage Type | Protects | Pays For | Requirement |
| Liability | Others | The other driver’s medical bills and property damage if you are at fault. | Nearly universally required by state laws. |
| Collision | Your car | Repairs or replacement if you hit a car, tree, or pothole. | Optional by law, but usually required by lenders. |
| Comprehensive | Your car | Damage from theft, fire, vandalism, weather, or animal strikes. | Optional by law, but usually required by lenders. |
| PIP / MedPay | You and any passengers | Your medical bills and lost wages, regardless of who is at fault. | Mandatory in no-fault states, but optional elsewhere. |
| Uninsured Motorist | You and your car | Your costs if you are hit by a driver with no or low insurance. | Mandatory in some states, but optional in others |
How Does Auto Insurance Cover You?
Before you can start your auto insurance comparison, you need to understand the different coverage options that automotive insurance can provide. This helps you identify the type that will best meet your needs.
Auto insurance can cover three types of costs:
- Liability covers the cost of damages you may cause to other people, such as medical expenses and vehicle repairs.
- Physical damage covers costs associated with your vehicle, such as repairs and part replacement.
- Personal covers other costs that problems with your vehicle may create for you, such as medical expenses and lost income.
Each type of insurance will cover you in at least one of these aspects, although some insurance types may cover several of them.
There are six types of insurance to consider getting for your vehicle. Auto insurance can cover either liability, physical damage or personal costs, although some policies cover multiple options. Some insurance types are optional, while others may be required by law. Pennsylvania, like all other states, has its own state-mandated auto insurance requirements that drivers must comply with.
1. Liability Coverage
Liability coverage, occasionally referred to as third-party coverage, covers the costs of certain damages that were caused by a road accident where you were at fault. Typically, liability coverage is split into bodily injury liability and property damage liability. In most states, including Pennsylvania, drivers are required to be insured for both of these liabilities.
Bodily injury liability helps cover the medical costs that may be incurred by someone you injure in a road accident. In Pennsylvania, every driver must carry bodily injury liability coverage that covers up to $15,000 per person or $30,000 per accident.
Property damage liability pays toward the cost of any property damage you cause to someone else while driving. This property could include their car, home or anything else they own. The minimum property damage liability limit is $5,000 in Pennsylvania.
2. Collision
Collision insurance helps cover the costs you may have to pay for your vehicle if you hit another vehicle or object. Your insurance can pay toward the repairs your vehicle will need. Alternatively, if your vehicle is irreparable or it’s cheaper to replace it, your collision insurance could cover the cost of a new vehicle.
Collision insurance generally has a deductible, which is a minimum amount you pay when you make a claim.
3. Comprehensive
Comprehensive insurance can help cover the costs of damage your vehicle can incur, even when you’re not driving it. Common perils that are covered include:
- Theft
- Vandalism
- Fire
- Hail
- Extreme weather events
Comprehensive insurance often includes personal accident coverage for the driver and has a deductible.
4. Medical
This type of coverage can help pay medical costs incurred in a road accident. The insurance usually applies to you and any passengers in your vehicle at the time of the accident. If someone covered by your policy was driving at the time of the accident, it could include them, too.
The bills that medical coverage can go toward vary from one policy to the next, but typical costs include doctor appointments, ambulances, X-rays, surgery and more.
Medical coverage is required in some states, including Pennsylvania, where the minimum coverage limit is $5,000.
5. Uninsured and Underinsured Motorist Coverage
If you suffer damages that were caused by an uninsured or underinsured motorist, this type of coverage could cover your medical bills. An underinsured driver has insurance but can’t cover your medical bills, while an uninsured driver doesn’t have any insurance that can pay toward your medical costs.
Uninsured and underinsured motorist coverage may also cover the repair costs to your vehicle, depending on the state you live in. Whether this type of coverage is required also varies by state, but it’s optional in most.
6. Personal Injury Protection
Personal injury protection (PIP) is similar to medical coverage, but provides more comprehensive coverage. While medical coverage will cover your medical bills, PIP can cover a wider range of costs. Depending on your policy, PIP could cover:
- Lost income as a result of your accident.
- Childcare that becomes necessary as a result of your accident.
- Funeral costs if someone passes as a result of your accident.
- Accidental death benefits, which are a lump sum paid to the beneficiaries of anyone who died as a result of the accident. The death must occur within the time frame stipulated in the PIP policy.
- Extraordinary medical benefits, which can cover more expensive and long-term medical expenses incurred by your accident.
Your PIP will cover these costs whether or not the accident was your fault. PIP is typically only required in no-fault states, although not all no-fault states require drivers to have it. Some states don’t allow PIP at all, while others, like Pennsylvania, require it.
6 Steps to Compare Different Auto Insurance Policies
Once you understand the different types of auto insurance, you need a plan to evaluate your options. Here’s how to compare different types of auto insurance coverage to find the best fit for you:
1. Verify State Baseline Requirements
Start your comparison by verifying the type of auto insurance required by law in your state. Almost every state requires some form of liability insurance, and states like Pennsylvania also mandate medical or PIP coverage.
Check your local Bureau of Motor Vehicles for mandatory limits, and treat these legal minimums as your baseline rather than a complete protection plan.
2. Assess Personal Risk and Assets
Evaluate your personal wealth to determine your ideal liability limits. Insurance is designed to help you pay for high, unexpected costs. If you own a home or possess significant savings, you should strongly consider higher liability limits to shield your assets from severe lawsuits if you cause an accident. You should also consider a high level of auto insurance if you:
- Regularly drive long distances
- Have a new or expensive car
- May struggle to pay the bills if a road accident prevents you from working
3. Weigh Vehicle Value Against Physical Damage Limits
Determine if you need collision and comprehensive coverage by assessing your car’s insured declared value (IDV). Your IDV is the maximum amount your insurer will pay to replace your vehicle, and it decreases each year as your car depreciates.
One common financial guideline that many drivers follow is the 10% rule. If your annual premiums cost more than 10% of your vehicle’s current market value, you should consider dropping comprehensive or collision coverage. However, it’s worth noting that the average collision claim is $5,489, so you should only drop these policies if you have the cash on hand to replace your older, paid-off vehicle yourself.
4. Review Optional Policy Add-Ons
Many insurance policies come with valuable add-ons that can be complementary or at a discounted price. Common add-ons to auto insurance include:
- Roadside assistance coverage: If you become stranded or experience vehicle trouble on the road, you can receive free services such as towing, jump-starting, tire changing, fuel delivery and more.
- Trip interruption coverage: If you’re a certain distance from home and your vehicle breaks down, you’ll be covered for lodging or transportation costs. Trip interruption coverage is often paired with roadside assistance.
- Diminishing deductible coverage: Some policies offer to reduce your deductibles by a certain amount for each year that you have no claims.
- Glass coverage: This add-on covers the repair or replacement costs of your windshield or windows.
- Rental reimbursement coverage: If having access to a vehicle is a priority, this add-on covers the cost of a rental car while your damaged vehicle is repaired or replaced.
- Umbrella coverage: Covers costs that exceed your standard policy. It can sometimes cover costs that aren’t covered by your policy at all, like paying toward legal defense for any lawsuits that arise from an accident you caused.
Review optional coverages to ensure you aren’t paying for overlapping services. Add-ons are valuable perks, but they shouldn’t be a key factor in what type of insurance you pick.
5. Compare Costs with Apples-to-Apples Quotes
Once you know what coverage you need, compare the cost of different policies by requesting identical quotes from multiple insurers. Ask for quotes using the same deductibles and coverage limits.
Comparing identical policies is the only way to reveal true price differences. When evaluating cost, remember that choosing a higher deductible will lower your monthly premiums but will require a larger one-time payment if you file a claim.
6. Negotiate and Finalize Your Policy
After selecting the most competitive quote from a reliable provider, discuss your policy with an experienced insurance agent. Before you sign, ask about multi-policy bundles, safe-driving programs or vehicle safety discounts to lower your baseline rate. By effectively negotiating with a provider, you can confidently lock in the best possible auto insurance policy.
Frequently Asked Questions About Comparing Auto Insurance Coverage
We’ve answered the most common questions we get about choosing the best auto insurance coverage option.
What is the best car insurance for me?
The best car insurance for you is a policy that balances your monthly budget with your unique driving habits and vehicle value. If you regularly drive long distances in a newer vehicle, a robust full-coverage policy offers the strongest financial safety net against daily road hazards.
Do I need comprehensive and collision coverage?
You need comprehensive and collision coverage if you are actively paying off an auto loan or leasing a vehicle. You should also keep these policies active if an unexpected, total-loss repair bill would strain your finances. The average comprehensive claim costs $2,306, this coverage provides crucial financial protection against severe weather, theft, and events outside your control.
How do I choose the right auto insurance deductible?
You choose the right auto insurance deductible by looking at your available emergency cash. Select a deductible amount that you can comfortably pay on short notice. Keep in mind that opting for a higher deductible lowers your monthly premium, while choosing a lower deductible increases your monthly bill.
Finding Your Perfect Auto Insurance
Finding the right type of auto insurance for you is vital to avoiding unexpected costs you can’t afford, complying with your state’s laws and enjoying peace of mind. But to find the perfect auto insurance for your needs, you need to compare the different types.
Each type of auto insurance has something different to offer, meaning you may want or need multiple types of auto insurance. By considering the pros and cons of each, balancing these with your own requirements and then finding a reputable insurer, you’ll soon find your perfect auto insurance policy.
