USAA leads our rating of the best car insurance companies. Auto-Owners is No. 2, followed by Nationwide, State Farm, and Geico.
Collision insurance provides coverage when your vehicle “collides” with something else, such as another vehicle or telephone pole. If you are involved in a single vehicle rollover or a hit-and-run accident, collision insurance may also cover repairs.
This type of insurance protects your vehicle if it is damaged by something other than a collision, such as a natural disaster, fire, theft, damage from an animal, or vandalism. Comprehensive insurance coverage is not usually required by state law, but purchasing a policy may be beneficial, especially if you don’t think you could cover the costs of an unexpected repair or possible vehicle replacement.
Full coverage car insurance is a combination of coverage that protects your vehicle in case of an accident or damages from outside circumstances. Most commonly, full coverage policies include liability, collision, and comprehensive coverage. In addition, full coverage could also include coverage required by your particular state, such as uninsured/underinsured motorist coverage, personal injury protection (PIP), or medical payments (MedPay).
Guaranteed asset protection, or gap insurance, is for drivers who finance or lease their vehicles. If your car is stolen or totaled, gap insurance covers the difference between your car’s value and your outstanding lease or loan balance. It does not cover any other accident-related costs.
For example, let’s say the actual cash value of your vehicle is $20,000, but the balance on your loan is $24,000. Should your car get totaled, gap insurance would cover the remaining $4,000 you’d otherwise pay out-of-pocket.
Liability car insurance coverage provides financial protection if you’re legally responsible for an accident that resulted in bodily injury, death, or property damage. It may also apply if someone else is driving your vehicle and is at fault for an accident. Typically, liability insurance is required by state law, however, the amount of coverage you need can vary. Note that liability insurance does not cover damages to your own vehicle.
If you borrow, rent, or share a car with someone else, you may qualify for a non-owner car insurance policy. This type of insurance provides basic liability coverage if you’re driving someone else’s vehicle and are at fault for an accident. It can also cover you if you’ve lost your license and require proof of insurance (SR-22) to reinstate your license. Non-owner car insurance limits usually match each state’s minimum car insurance requirements.
Uninsured motorist coverage, which is required in 20 U.S. states and Washington D.C., provides financial protection if you’re in an accident with a driver who does not carry liability insurance or leaves the scene of the accident without providing their insurance information. Uninsured motorist coverage is often bundled with underinsured motorist coverage, which protects you if you’re in an accident and the at-fault driver doesn’t have enough insurance to fully cover the damage they caused.
