Car insurance is expensive: full, partial, and basic coverage explained

In the US, buying car insurance (Car Insurance) is something every vehicle owner has to deal with, but for folks who just arrived, the types and terms of auto insurance can feel a bit confusing. Common insurance types include full coverage (Full Coverage), liability insurance (Liability Insurance), and minimum requirement insurance (Minimum Coverage). This article will help you understand the differences between them so you can choose the right plan for your needs.

1. Full coverage (Full Coverage)

Full Coverage isn't a single insurance item, but rather a bundle of several coverages, which typically includes:

• Collision Coverage: If you accidentally collide with another vehicle or object, this insurance helps pay for your car repair expenses.
• Comprehensive Coverage：Covers damage from non-collision incidents, such as theft, fire, storms, or animal impacts.
• Medical Payments Coverage: If an accident causes injuries, this coverage pays for the medical expenses.

Pros:

• It offers broad coverage, getting you compensated whether it is damage to yourself or to others.
• Best for new cars or higher value vehicles.

Cons:

• It is more expensive, and insurance costs can get quite pricey, especially for new or high-end cars.

2. Liability Insurance

Liability Insurance is usually required by state governments for all vehicle owners, and it mainly covers the following two parts:

• Property Damage Liability：If you cause damage to other vehicles or property in an accident, this insurance will cover the compensation.
• Bodily Injury Liability: If you injure someone in an accident, this coverage will pay for their medical expenses.

Pros:

• It is relatively low cost and meets the minimum insurance requirements.
• When you're at fault in an accident, this insurance helps you pay for other people's losses.

Cons:

• It only covers losses to others. Damage to your own vehicle and personal injuries will not be compensated.
• It only covers damage to the other party and offers no protection for yourself.

3. Minimum coverage (Minimum Coverage)

Minimum insurance is the state's baseline requirement for car owners, which usually includes:

• Property Damage Liability
• Bodily Injury Liability

Pros:

• The cheapest option, making it a practical choice for car owners on a tight budget.

Cons:

• The coverage is pretty limited since it only covers other people's losses and injuries, offering almost no protection for yourself.

4. How to choose the right insurance for you?

To choose the right auto insurance, first consider these factors:

• Your vehicle's age and value: Full Coverage is usually chosen for new cars, while older vehicles can go with cheaper Liability Insurance or minimum coverage.
• Budget: Premiums for full coverage are usually higher, so you will want to decide based on your budget.
• Driving habits: If you drive frequently or deal with risky road conditions, choosing full coverage will give you better protection.

5. Major US auto insurance companies

Here are a few major auto insurance companies in the US, and you can pick the one that fits your needs based on their plans:

• GEICO: https://www.geico.com
• Progressive: https://www.progressive.com
• State Farm: https://www.statefarm.com
• Allstate: https://www.allstate.com

6. Frequently Asked Questions (FAQ)

Q: How much car insurance do I need? Choose the insurance that fits you best based on your vehicle's value, your state's regulations, and your budget.

Q: How much does insurance cost? Insurance costs vary based on your vehicle, driving record, age, and other factors. Generally, minimum coverage is cheaper, while Full Coverage comes with higher premiums.

In short

Picking the right car insurance is super important. It protects you from big losses and eases your financial burden if an accident happens. Choose a coverage type based on your vehicle, budget, and needs, and shop around with major insurance companies to find the best fit for you.

Further reading

Buying a car in the US: cash, financing, or lease, and how your credit score changes the answer

I'm C. I'm from Taiwan and now run my own business in Los Angeles. The early days here were not easy: the language barrier, the culture shock, and a hundred small details I had to figure out one at a time. Those years taught me how to settle in quickly, and I've put everything I learned on this site. The goal is simple: help people arriving from Chinese-speaking countries settle in faster and with less pain. Moving here, finding work, handling everyday errands: you'll find practical shortcuts and real solutions, so you skip the detours I didn't. I hope it helps you start your life in the US on the right foot.

Running this site takes real work, and I'm grateful to everyone who supports it. If any of this has helped you, a small contribution keeps the updates coming.

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