Car Insurance

For most people in America, if you own a car, you must have insurance for it. Insurance is designed to protect against monetary loss, specifically it is a way to protect the driver from liability against damages to another vehicle, property or personal injury due to an accident. The vast majority of states require some minimal amount of car insurance to operate a vehicle on the road. There are a few different products that are available for drivers in the US, here are just a few.

Major Types of Coverage Available

There are several types of coverage available for those looking to purchase car insurance. They include: liability, collision, comprehensive and uninsured/under-insured.

Liability Car Insurance

Liability car insurance is usually the one type of coverage that is mandatory by most states. Most states require at least a minimum of liability coverage. Liability car insurance covers damages to property, another vehicle or bodily injury. Amounts can vary from about $25,000 into the millions.

Collision Car Insurance

Collision is a popular coverage option for many drivers. Since liability coverage offers coverage for the other party’s vehicle, collision car insurance offers coverage for your vehicle. If you lease or finance your vehicle, you will usually be required by law or finance company to also have collision car insurance.

Crashed Car


Comprehensive car insurance covers your vehicle for damages that occur through fire, theft and other unforeseen acts. For instance, if your car is stolen, comprehensive will usually cover you losses up to current book value. Most states require comprehensive car insurance if you lease or finance your vehicle. Besides fire and theft, your car may be covered by comprehensive insurance for other unforeseen acts such as vandalism.


Because car insurance can be expensive in many states, many people drive illegally without insurance. Since most people that have received damages from another vehicle are usually paid through the other party’s car insurance, if that person has no insurance- the person that has received damages has no one to collect from. Uninsured or under-insured coverage ensures that no matter if the other person has no insurance or a low amount of insurance, the person that has uninsured/under-insured coverage will receive the necessary compensation for damages.


A deductible is an amount of coverage that is not covered by the insurance company. For instance, if you have a deductible for collision set at $500, no money will be paid to you by the insurance company unless the total damage exceeds $500. Deductible amounts vary from no deductible to usually $500 deductible or more. The less the deductible, usually the more the cost for insurance.

Factors Affecting Cost

The cost of insurance is mainly based on risk. There are many factors that affect the cost of car insurance. They include: amount of deductible, age of driver, past driving record (whether the person has had an accident, speeding tickets, etc), location where the person lives and drives, age of driver, gender of driver, type of vehicle, overall value of vehicle, distance person drives per month/year, etc.

Penalties for Driving a Vehicle Without Car Insurance

Since most states require car insurance, if you are caught operating a vehicle without insurance, you may receive severe penalties including fines, revocation or suspension of license and even jail time.

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