Choosing the correct car insurance is not only about finding the cheapest price. It's essential that you get the right coverage for your situation.

First you have to identify what options there are available. There are five main categories or types of auto insurance coverage.

  • Liability coverage
    This is the utter standard since most, if not all, countries require some form of insurance to be legal to drive a car. This insurance covers compensation for the damage caused by you. More precisely, it will pay for physical injury and property damage of others. Keep in mind that liability insurance does not cover any of your damages, it shields others from damage you caused and furthermore protects you financially. Without it, you are accountable for paying the entire cost of an accident.
  • Out-of-stash collision coverage
    This insurance covers for damage to your car from a mishap regardless of you were at fault or not. As the name infers, collision coverage pays for damage suffered when you're driving and slam into another object. Losses from non crash stuff like robbery or weather damage are not covered by your collision insurance. For those things you'll require something called comprehensive coverage.
  • Comprehensive coverage
    This covers misfortunes that are totally out of your control. Like collision coverage, comprehensive coverage is optional. It will protect you from losses caused by fire, vandalism, theft, colliding with an animal or damage caused by certain natural disasters. But comprehensive coverage won't cover everything. For instance, most polices won't cover damage due to freezing despite the fact that it is weather-related. Comprehensive coverage normally doesn't cover breakdowns either, you should find out what is excluded before acquiring. Comprehensive coverage is usually more appealing to drivers of a new or expensive vehicle.
  • Medical coverage
    Injuries to you or your passengers should be covered by the opposite party, in case you were not at fault. But you have the option to buy you own additional medical coverage, called no-fault insurance. It will pay the costs of treatment regardless of who is at fault in an accident.
  • Uninsured or underinsured motorist coverage
    This type of insurance protects you from risks of being hit by an uninsured or underinsured driver. While some form of insurance is mandatory, not all people have insurance. You can’t collect from a liability insurance they don’t have, or the cover is not sufficient, so with this insurance your medical expenses and lost wages will be paid.

When you are looking for an auto insurance, check out the company’s policies to make sure you know exactly what you get and find out what is covered.