Chelsey Tucker graduated with a Bachelor of History degree from Metropolitan State University in 2019. She now writes about insurance with her specialty being life insurance and has been quoted on Help Smart Phone and MEL Magazine.

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Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years. He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like

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Reviewed by Daniel Walker
Licensed Auto Insurance Agent

UPDATED: Mar 31, 2021

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Here's what you need to know...

  • All drivers, no matter where they live, should be sure they have purchased the minimum required amounts of auto insurance in their own state
  • Not being covered with the minimum amounts can lead to severe legal and financial consequences
  • There are many optional insurance coverages that drivers should consider, depending on their financial situation

Most American drivers could use more education about car insurance and what types of coverage they really do need.

For many people, car insurance can be quite confusing and other than it being a necessary expense, they are not quite sure what they get out of it. Drivers who need to decrease the amount of their car insurance premiums should consider using a car insurance rate calculator.

These online tools make it simple and quick to compare many different auto insurance policies and premiums.

Enter your zip code above for car insurance quotes in your area today!

Auto Insurance Coverage: Where to Start

When it comes to auto insurance coverage, the first thing drivers need to consider is if they have the minimum amounts of coverage required by law.

This will vary by state, however, nearly all states have mandatory coverage laws. The car insurance company you get a quote with should be able to tell you what the minimum coverage amounts are in your state.

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Consequences for not Having Auto Insurance Coverage

For financial reasons it may be tempting for some drivers to not obtain auto insurance, doing so is risking many consequences.

These consequences can add up to a lot of money, much more than drivers would have spent if they would have chosen to be properly insured in the first place. Consequences for not having insurance or the right amounts of insurance coverage will also vary by state but usually include:

  • Imprisonment
  • Suspension of driver’s license
  • Suspension of car registration
  • SR22 insurance requirement
  • Fines
  • Community service
  • Warnings or citations

Additionally, if you are found to be at fault for an accident and do not have auto insurance you could be sued and found guilty in civil court.

This means the plaintiff in the case could come after your assets and garnish your wages in order to recoup their financial, physical, and emotional losses.

Liability Coverage


The minimum amount of coverage required by most states is known as liability coverage. This covers damages that you cause but will not pay out for your own damages.

Property liability is for damages you cause to other people’s vehicles or other property. Body injury liability covers medical bills and, if needed, funeral expenses.

Collision and Comprehensive Coverages

While not legally required in any state, it is wise for the majority of drivers to select collision and comprehensive coverages on their auto insurance policy. Drivers can select the amount of coverage they want for each and what they want the deductible to be.

The lower the deductible the higher the premium cost and vice versa.

Collision coverage will pay expenses if your car is damaged while colliding with another vehicle or object such as a tree, building, or light pole. Comprehensive covers other incidences that may damage your vehicle or otherwise cause a loss such as natural disasters, fires, theft, vandalism, hitting a deer, or flooding.

Drivers who are leasing their vehicle or who still owe on their loan are usually required to have these coverages.

However, drivers who have cars that are paid off may choose to forgo these coverage types with the understanding that they may need to pay out of pocket for their damages if an accident occurs.

In addition, people should consider their general financial position when deciding on whether or not to purchase comprehensive and collision policies.

If they would rather not pay the additional premium amounts on their auto insurance policies but are okay with the potential that they may have to pay out of their own pocket to cover certain damages or perhaps even a new car, it may be better to not elect these policy types.

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Medical Payments

Also referred to as Personal Injury Protection (PIP) or simply Med Pay, this coverage provides payments for medical bills, lost wages, and other related expenses such as necessary help around the house due to injuries from a car accident.

Some states require drivers to have med pay coverage while others do not. If you live in a state that does not require it, you may want to consider it as medical bills can be quite costly.

Uninsured/Underinsured Motorist Coverage

Unfortunately, many states have drivers that are not insured or who do not have adequate amounts of insurance coverage. If you are in an accident with one of them, it is wise to have uninsured/underinsured motorists coverage. Some states also make uninsured motorist coverage mandatory.

Uninsured motorist coverage picks up the tab if you are in an accident caused by another driver who does not have insurance.

It may also be relied upon if you are a pedestrian or a bicyclist in an accident. Underinsured motorist coverage can help cover the costs that exceed the amount of the other drivers insurance coverage limits.

Roadside Assistance


While not necessary, many drivers like the assurance of having roadside assistance coverage on their policy.

This means if they car breaks down for any reason, their insurance policy will help them out of the bind. Although for some drivers, this additional coverage will not make financial sense.

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Rental Car Coverage

If your vehicle has suffered damage, you may be left without a vehicle to drive for several days or even weeks.

Rental car coverage provides a certain amount per day towards renting a car in the event your car needs to be fixed as a result of an auto insurance claim. While it may not be needed often, it is a nice coverage to have.

Driver Financial Status

Before making any decision about auto insurance coverage, drivers should assess their entire financial picture. They should consider points such as:

  • How much they can afford for a monthly premium
  • What savings they can rely on if they need to replace their vehicle or pay for other people’s damages
  • If they have assets to protect
  • If they have other people who rely on them for income

While deciding on the types of car insurance coverage you should have may not be the most enjoyable thing on your to-do list, it is highly important to your financial and legal well-being.

If you cannot afford the coverage that you need, consider using a car insurance price comparison tool online. You may find that affordable coverage is within your reach after all.

Enter your zip code below for car insurance rates from top companies in your area!