Car Insurance Deductibles and Coverages [The Buyer’s Guide]

How can there be so many different rates? Some states are several times more than their bordering state. Then you look at companies. If you do a google search of insurance companies, pages and pages fill your browser screen.

How can all of them offer such different rates? And, how do they come up with these rates? We are going to look at what affects your car insurance and what can drive the price higher.

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If you want to learn more about what affects your car insurance — keep reading.

Car Insurance Coverages

Ok, we get it. When looking for car insurance, you see so many different options that it is hard to know what they all are, let alone know what the best option for your needs is.

Let’s breakdown the coverage options you find when getting an auto insurance quote.

What is liability coverage on an auto insurance policy?

All states have minimum liability limit requirements when you are purchasing auto insurance. For instance, New Hampshire does not require auto insurance. But, if you choose to buy insurance, you must have purchased the minimum limits required by New Hampshire state law.

But, New Hampshire doesn’t require insurance, does my state? If not, why should I buy it?

There are only two states that do not require auto insurance, New Hampshire and Virginia. While that may sound tempting to avoid those monthly insurance bills, it could cost you a lot more in the long run.

Not having insurance doesn’t make you exempt from being held liable for property damage or bodily injury you caused. This is where liability insurance comes into play.

Liability insurance is used when you are the one held liable for the accident. When you are found at fault, your insurance pays out for the other person that is not at fault. 

State minimum requirements can vary from state to state. Remember, this is just a minimum amount you can purchase. You have the option to purchase more insurance. If you are found at fault and damage a luxury car or seriously harm someone, your policy only pays out the limits you have purchased. After that, you could get stuck with the bill.

What is the minimum liability car insurance requirement in my state?

Each state has its own law regarding the minimum requirements of liability insurance. Take a look at the below information for the Insurance Information Institute.

Guide for the table:

  • BI Liab=Bodily injury liability
  • PD Liab=Property damage liability
  • UM=Uninsured motorist
  • PD=Physical damage
  • Med=First party (policyholder) medical expenses
  • UIM=Underinsured motorist
  • PIP=Personal Injury Protection. Mandatory in no-fault states.
  • FR=Financial responsibility only. Insurance not compulsory.
State Insurance Required Minimum Liability Limits
AK BI & PD Liab 50/100/25
AL BI & PD Liab 25/50/25
AR BI & PD Liab, PIP 25/50/25
AZ BI & PD Liab 15/30/10
CA BI & PD Liab 15/30/5
CO BI & PD Liab 25/50/15
CT BI & PD Liab, UM, UIM 25/50/20
DC BI & PD Liab, UM 25/50/10
DE BI & PD Liab, PIP 25/50/10
FL PD Liab, PIP 10/20/10
GA BI & PD Liab 25/50/25
HI BI & PD Liab, PIP 20/40/10
IA BI & PD Liab 20/40/15
ID BI & PD Liab 25/50/15
IL BI & PD Liab, UM, UIM 25/50/20
IN BI & PD Liab 25/50/25
KS BI & PD Liab, PIP 25/50/25
KY BI & PD Liab, PIP, UM, UIM 25/50/25
LA BI & PD Liab 15/30/25
MA BI & PD Liab, PIP 20/40/5
MD BI & PD Liab, PIP, UM, UIM 30/60/15
ME BI & PD Liab, UM, UIM, Medpay 50/100/25
MI BI & PD Liab, PIP 20/40/10
MN BI & PD Liab, PIP, UM, UIM 30/60/10
MO BI & PD Liab, UM 25/50/25
MS BI & PD Liab 25/50/25
MT BI & PD Liab 25/50/20
NC BI & PD Liab, UM, UIM 30/60/25
ND BI & PD Liab, PIP, UM, UIM 25/50/25
NE BI & PD Liab, UM, UIM 25/50/25
NH FR only 25/50/25
NJ BI & PD Liab, PIP, UM, UIM 15/30/5
NM BI & PD Liab 25/50/10
NV BI & PD Liab 25/50/20
NY BI & PD Liab, PIP, UM, UIM 25/50/10
OH BI & PD Liab 25/50/25
OK BI & PD Liab 25/50/25
OR BI & PD Liab, PIP, UM, UIM 25/50/20
PA BI & PD Liab, PIP 15/30/5
RI BI & PD Liab 25/50/25
SC BI & PD Liab, UM, UIM 25/50/25
SD BI & PD Liab, UM, UIM 25/50/25
TN BI & PD Liab 25/50/15
TX BI & PD Liab, PIP 30/60/25
UT BI & PD Liab, PIP 25/65/15
VA BI & PD Liab, UM, UIM 25/50/20
VT BI & PD Liab, UM, UIM 25/50/10
WA BI & PD Liab 25/50/10
WI BI & PD Liab, UM, Medpay 25/50/10
WV BI & PD Liab, UM, UIM 25/50/25
WY BI & PD Liab 25/50/20

Bodily Injury

This is liability coverage used when you or another person driving your vehicle causes injury to another person.

Property Damage

Property damage is coverage for when you are another person driving your vehicle causes damage to another vehicle. This also includes property like a building or fence.

Uninsured/underinsured Motorist Coverage

This coverage is not required in every state, but it is very good coverage to consider when getting auto insurance. When you are involved in an accident, and the person causing the accident doesn’t have insurance or not enough insurance, they are held liable for the injury and damages.

But, what happens when they can’t pay for your claim?

This is when uninsured/underinsured coverages kick in. This coverage can be used when the other party does not have enough coverage, or any at all,  to get you back on the road.

Medical Payments or Personal Injury Protection

These coverages are not exactly the same. Medical payments, or Medpay, can be added to your policy to help reimburse medical or funeral expenses.

Personal Injury Protection, or PIP, can cover more expenses. This can reimburse for things like lost wages and therapy as well.

What are other additional coverages I can add to my auto insurance?

There are other coverages you can add to your policy. Liability coverage covers a loss caused by you but pays out for the other party. Well, what about coverage for your vehicle?

Two of the most commonly added coverages are collision and comprehensive.

Collision coverage reimburses for damage occurring from a collision. If you hit another car or even a tree, it will cover your vehicle regardless of fault.

Comprehensive coverage is used for damage occurring from an incident other than a collision. For instance, theft or vandalism would be covered under comprehensive coverage.

Car Insurance Rates by Coverage

Remember when we said that coverage rates could vary from state to state? Let’s take a look at how different rates can be from each state.

National Association of Insurance Commissioners, NAIC, is a national organization that helps set standards and guidelines in all 50 states. The following rate tables come from data collected by the NAIC.

What does liability coverage cost by state?

Liability is the required coverage by the state in which you live. Below are the minimum required liability rates for every state.

State 2015
Alabama $394.21
Alaska $539.68
Arizona $508.76
Arkansas $394.13
California $489.66
Colorado $520.04
Connecticut $650.94
Delaware $799.30
District of Columbia $628.82
Florida $857.64
Georgia $557.38
Hawaii $458.54
Idaho $344.29
Illinois $446.72
Indiana $382.68
Iowa $299.18
Kansas $358.24
Kentucky $529.21
Louisiana $775.83
Maine $338.87
Maryland $609.74
Massachusetts $606.04
Michigan $795.32
Minnesota $456.82
Mississippi $460.50
Missouri $415.88
Montana $386.29
Nebraska $364.64
Nevada $681.56
New Hampshire $400.56
New Jersey $869.57
New Mexico $488.03
New York $804.51
North Carolina $359.42
North Dakota $298.18
Ohio $397.11
Oklahoma $461.01
Oregon $584.13
Pennsylvania $499.06
Rhode Island $759.80
South Carolina $527.09
South Dakota $300.22
Tennessee $413.91
Texas $528.75
Utah $497.53
Vermont $343.12
Virginia $425.61
Washington $596.67
West Virginia $491.83
Wisconsin $374.37
Wyoming $321.04
Countrywide $538.73

What does collision coverage cost by state?

If you chose to add collision to your policy, this table gives you a rough estimate of how much collision coverage would add to your policy.

State 2015
Alabama $317.96
Alaska $350.81
Arizona $277.96
Arkansas $321.80
California $396.55
Colorado $287.00
Connecticut $368.51
Delaware $318.77
District of Columbia $468.67
Florida $282.96
Georgia $331.83
Hawaii $313.17
Idaho $219.05
Illinois $309.71
Indiana $250.29
Iowa $219.75
Kansas $263.33
Kentucky $267.91
Louisiana $414.36
Maine $259.98
Maryland $353.99
Massachusetts $388.28
Michigan $413.83
Minnesota $234.40
Mississippi $323.22
Missouri $275.28
Montana $265.32
Nebraska $237.13
Nevada $303.86
New Hampshire $307.42
New Jersey $381.86
New Mexico $276.98
New York $385.02
North Carolina $293.59
North Dakota $244.09
Ohio $269.84
Oklahoma $318.47
Oregon $226.83
Pennsylvania $327.24
Rhode Island $411.51
South Carolina $265.07
South Dakota $208.58
Tennessee $309.07
Texas $374.49
Utah $265.90
Vermont $295.42
Virginia $280.52
Washington $265.74
West Virginia $329.67
Wisconsin $226.00
Wyoming $278.83
Countrywide $322.61

What does comprehensive coverage cost by state?

Comprehensive is also another added coverage you can add along with collision. Take a look below to get an idea of how much comprehensive would add to your premium.

State 2015
Alabama $156.31
Alaska $137.26
Arizona $186.12
Arkansas $190.41
California $100.54
Colorado $174.61
Connecticut $131.62
Delaware $122.49
District of Columbia $233.24
Florida $116.53
Georgia $159.18
Hawaii $101.56
Idaho $116.55
Illinois $128.13
Indiana $122.06
Iowa $183.53
Kansas $241.36
Kentucky $141.39
Louisiana $215.17
Maine $104.98
Maryland $152.72
Massachusetts $134.96
Michigan $154.85
Minnesota $184.27
Mississippi $210.33
Missouri $181.27
Montana $211.91
Nebraska $229.25
Nevada $117.63
New Hampshire $110.77
New Jersey $131.35
New Mexico $172.57
New York $171.12
North Carolina $136.08
North Dakota $231.04
Ohio $121.61
Oklahoma $225.84
Oregon $93.87
Pennsylvania $144.21
Rhode Island $132.19
South Carolina $180.94
South Dakota $258.11
Tennessee $148.45
Texas $206.42
Utah $109.50
Vermont $125.48
Virginia $136.54
Washington $106.38
West Virginia $204.28
Wisconsin $136.81
Wyoming $247.57
Countrywide $148.04

What does full coverage cost by state?

The term full coverage is often used when a consumer has both collision and comprehensive coverage added to their liability policy.

State 2015
Alabama $868.48
Alaska $1,027.75
Arizona $972.85
Arkansas $906.34
California $986.75
Colorado $981.64
Connecticut $1,151.07
Delaware $1,240.57
District of Columbia $1,330.73
Florida $1,257.13
Georgia $1,048.40
Hawaii $873.28
Idaho $679.89
Illinois $884.56
Indiana $755.03
Iowa $702.46
Kansas $862.93
Kentucky $938.51
Louisiana $1,405.36
Maine $703.82
Maryland $1,116.45
Massachusetts $1,129.29
Michigan $1,364.00
Minnesota $875.49
Mississippi $994.05
Missouri $872.43
Montana $863.52
Nebraska $831.02
Nevada $1,103.05
New Hampshire $818.75
New Jersey $1,382.79
New Mexico $937.59
New York $1,360.66
North Carolina $789.09
North Dakota $773.30
Ohio $788.56
Oklahoma $1,005.32
Oregon $904.83
Pennsylvania $970.51
Rhode Island $1,303.50
South Carolina $973.10
South Dakota $766.91
Tennessee $871.43
Texas $1,109.66
Utah $872.93
Vermont $764.02
Virginia $842.67
Washington $968.80
West Virginia $1,025.78
Wisconsin $737.18
Wyoming $847.44
Countrywide $1,009.38

Deductibles and Car Insurance Rates

You have probably heard of deductibles on your car insurance. The deductible is the amount that you pay first before your insurance pays out.

If you have a $500 collision deductible and you filed a claim for $1300, you will pay the $500 and you would receive $800 from your insurance company if the claim is approved.

Let’s take a deeper look into how deductibles work.

What are the types of car insurance deductibles?

Different companies offer various levels of deductibles. Some companies go as low as $250 deductible, and some go as high as $5,000.

The higher deductible equals a lower premium amount because remember this is the amount you must pay first before your insurance coverage starts to pay.

If you do not have any required coverages, like from a lienholder, you can choose any deductible amount. Keep in mind, you must have the funds to cover the deductible. So while a cheaper premium may be enticing, make sure you can pay the deductible if needed.

How do I choose the right car insurance deductible?

It is up to the consumer to choose which deductible amount is a good fit for them. In some cases, you may be required to have a set deductible amount. Let’s look at why you would have to choose insurance coverage with a deductible and what coverages require a deductible.

What kind of coverage requires a deductible?

Most liability coverages do not require a deductible. In some states,  there may be a low deductible required. Make sure you check with your provider to verify the requirements.

Collision and comprehensive coverage are the two coverages known for carrying a deductible amount.

If you lease or have a loan on your vehicle, you will usually have requirements from the dealer or company. Most lienholders require at least a $500 deductible. They will also require proof from your insurance company that you have the proper coverage in place.

How likely you are to file a claim?

Having a larger deductible allows more money to be left in your pocket, and everyone wants that right? But you also do not want to have to come up with a high amount for the deductible in the event of a claim.

The biggest question to answer is how likely are you to file a claim. If your likelihood of filing a claim is low, then you can have a larger deductible.

Let’s take a look at the data from the National Highway Traffic Safety Administration for which states have the most traffic fatalities.

State Traffic Fatalities in 2016 Traffic Fatalities in 2017 Percent Change
Alabama 1,083 948 -12
Alaska 84 79 -6
Arizona 952 1,000 5
Arkansas 561 493 -12
California 3,837 3,602 -6
Colorado 608 648 7
Connecticut 304 278 -9
Delaware 119 119 0
Dist of Columbia 27 31 15
Florida 3,176 3,112 -2
Georgia 1,556 1,540 -1
Hawaii 120 107 -11
Idaho 253 244 -4
Illinois 1,078 1097 2
Indiana 829 914 10
Iowa 402 330 -18
Kansas 429 461 7
Kentucky 834 782 -6
Louisiana 757 760 0
Maine 160 172 8
Maryland 522 550 5
Massachusetts 387 350 -10
Michigan 1,065 1030 -3
Minnesota 392 357 -9
Mississippi 687 690 0
Missouri 947 930 -2
Montana 190 186 -2
Nebraska 218 228 5
Nevada 329 309 -6
New Hampshire 136 102 -25
New Jersey 602 624 4
New Mexico 405 379 -6
New York 1,041 999 -4
North Carolina 1,450 1412 -3
North Dakota 113 115 2
Ohio 1,132 1179 4
Oklahoma 687 655 -5
Oregon 498 437 -12
Pennsylvania 1,188 1137 -4
Puerto Rico 279 290 4
Rhode Island 51 83 63
South Carolina 1,020 988 -3
South Dakota 116 129 11
Tennessee 1,037 1040 0
Texas 3,797 3722 -2
Utah 281 273 -3
Vermont 62 69 11
Virginia 760 839 10
Washington 536 565 5
West Virginia 269 303 13
Wisconsin 607 613 1
Wyoming 112 123 10
National 37,806 37133 -2

States like Florida, Texas, and California have the highest number of fatalities. They also have a larger population, so they may not be more dangerous, just more populated.

Overall, the national rate has gone down in traffic fatalities.

Once you get the required minimum coverage mandated by your state or added coverage required by a lienholder, you can add more coverage to your auto policy. We definitely suggest sitting down with your insurer and going over your needs. Speaking with your agent or company can guarantee you do not have a gap in coverage.

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