Marissa Hayes is a technical editor and contributing writer. She holds a Bachelor’s Degree in history, and she was the editor of the literary magazine, The Bluestone Review.

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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 Reviews.com.

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Reviewed by Daniel Walker
Licensed Car Insurance Agent

UPDATED: Nov 23, 2020

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It’s all about you. We want to help you make the right coverage choices.

Advertiser Disclosure: We strive to help you make confident insurance decisions. Comparison shopping should be easy. We partner with top insurance providers. This doesn’t influence our content. Our opinions are our own.

Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.

Understanding Your Coverage Needs

Auto insurance is a driving expense that most vehicle owners have to deal with. Picking the cheapest auto insurance company involves the consideration of several factors, including which types of companies you prefer doing business with, the price of each competing provider's policy, and which types of discounts they have available.

However, in their search to find a cheap car insurance rate as well as a policy that suits you, one thing that not everyone considers is what specific kind of coverage they need.

How much coverage can you afford?

The first step in determining what type of coverage you need is how much you can afford. The point of auto insurance is to make sure that you pay as little out of pocket as possible after an accident, so the more that you can afford to pay for your monthly insurance premium, the lower your deductible will be.

Think about your income as well as other financial responsibilities that you have to determine how much you can afford to pay for your coverage, which will have a direct impact on the type of insurance provider that you choose.

Compare the Types of Coverage Available

Most auto liability insurance policies have three types of coverage: bodily injury coverage for a single person, bodily injury coverage for everyone involved in an accident, and property damage coverage for property affected by your accident. Kelley Blue Book advises drivers to remember what minimums their state has for the different kinds of coverage available, and to also consider the fact that if they are in an accident where they are at fault and their coverage does not cover all of the other person’s medical bills, most likely the other party will attempt to sue the driver in question for the difference.

Situations like this could lead to a more expensive scenario than you would have had if you opted for more coverage. To learn more about how some of the top auto insurers compare go here.

Consider Your Driving Habits

The type of coverage that you need will also be greatly impacted by your driving habits. In turn, these driving habits are often dictated by what type of driver you are. For example, statistics show that women are more cautious on the road, and as a result pay less for car insurance.

Terence Loose at Yahoo! writes that men are involved in more accidents and tend to be more aggressive while driving, especially men under the age of 25. For this reason, if you are a female and are cautious about your driving you might be fine with a lower amount of coverage. There are also ways that females can get cheaper auto insurance without lowering the amount of coverage that they get, such as comparing quotes and asking for additional discounts.

Think About Where You Drive

Many minor accidents like dents and scratches occur in larger, urban areas. Because of this, if you are a driver in a big city, you should consider increasing your collision coverage as well as your comprehensive coverage, which protects from accidental damage to your vehicle where there might not be anyone at fault.

Also, if you are a college student that only drives your vehicle in your town when you are not at school, you might be able to lower the amount of coverage that you need because you are not driving your car all year. Other tips on auto insurance discounts for college students will help you maintain as broad of a policy as possible while keeping the costs of your insurance policy down.

Another important factor that pertains to where you drive is where you park. Parking on the street means you may be vulnerable to someone hitting your car while you are away or asleep. Your parked vehicle may also be susceptible to vandalism. On the other hand, if you have access to an off-street lot or a garage, your car will be safer and you may not need as much comprehensive coverage for these types of situations.

Comparing auto insurance online is vital if you want to keep yourself in good shape financially, but make sure that you do not forget about the actual coverage that your policy provides. The type of coverage you need depends on what sort of driving you do, where you live, and how much you can afford.

Companies like State Farm and Esurance provide helpful online resources to help you choose an auto insurance policy, but the ultimate decision should be yours so that you can find the balance of coverage and cost that works for your situation.