Auto Insurance: Most Things you Need to Know

Confused about auto insurance? You're not alone. An Esurance survey in 2019 concluded that one in five consumers would rather slam their hand in a car door than shop for car insurance.¹ Yikes. 

Thankfully, you don't have to choose between your hands and buying car insurance. You need those hands functional for safe driving, after all. More importantly, smashing yourself doesn't satisfy your state's legal requirement to carry insurance. 

The good news is, you're in the right place to tame the confusion. Honest Policy demystifies car insurance shopping with accurate, complete information about policy features, carriers, and premiums. 

Keep reading to master some of the more complex topics around car insurance, including coverage types available, how much coverage you need, factors that affect your rates, and the discounts and endorsements you might see while you're shopping. 

Auto coverages overview 

Your state's requirements for auto insurance mostly protect other drivers. Specifically, the minimum coverage levels won't pay to repair your own car after an accident you caused. Worse, your state's minimums may not protect you if you're hit by someone who doesn't have insurance. 

The takeaway? Don't assume you're protected with minimum coverage. For most drivers, the state minimums are grossly insufficient. 

Like it or not, the burden is on you to understand the types of coverages available. That's the first step to safeguarding your wealth. Start with our Ultimate Guide to Auto Insurance Coverages -- an easy-to-understand review of your auto insurance options.  

How much auto coverage do you need

Optimizing your auto insurance policy starts with deciding which coverages you need. But there's so much more to it. On liability insurance and medical payments insurance, for example, you set coverage limits. And on comprehensive and collision, you set your deductibles. 

It's natural to lean towards the cheapest options -- that is, low coverage limits and high deductibles. But that can expose you to a financially devastating lawsuit or a household liquidity crisis. 

There is a fine balance between being sufficiently protected and overpaying for coverage you don't need. Our how-to article, Deciding How Much Auto Coverage You Need, shows you how to find that balance. 

Auto insurance endorsements 

Endorsements are special customizations you can make to your auto coverage. They often extend your protections to new situations or raise the value of the standard coverages. 

A common example is rideshare insurance. Standard auto policies exclude coverage while you are working as a rideshare driver. A rideshare endorsement fills in that exclusion with insurance that's only active while you are driving for hire. 

You can also buy endorsements for pet insurance, extra protections on your new car, and deductibles that dwindle over time. Get the full scoop here: 9 Optional Auto Insurance Endorsements Explained.

Factors that affect your auto insurance rates 

Once you take the time to choose your ideal coverages, limits, and deductibles, there is the chance your rate quotes will be higher than you'd like. Our article, Factors that Affect Your Auto Insurance Rates, will show you why. 

There are factors you can't control immediately, like your age or your marital status. (We at Honest Policy don't advise getting married just to lower your insurance premiums.) Still, knowing what insurers focus on can help you make better decisions to manage your insurance costs long-term. Examples include the type of car you drive and whether it has a branded title, how much you drive, and your credit history. 

Auto insurance discounts 

A more immediate way to lower your insurance premiums is to ask for discounts. The thing is, you can't ask for discounts if you don't know about them. As well, discounts can involve qualifications that aren't on the carrier's application. When that happens, the carrier has no idea you're eligible. 

If you don't know about a discount and the carrier doesn't realize you're eligible for it, guess what? You're not getting that discount. 

Remedy this issue by reviewing the most common auto insurance discounts in our article, 15 Best Car Insurance Discounts and How to Get Them. You'll learn what the discounts are and what they may be worth to you. 

Auto insurance FAQs

Still have questions about car insurance? See our auto insurance FAQs to find out whether your policy covers rodent damage, a blown engine, vandalism by an angry ex, and so much more. For specific definitions, our car insurance glossary offers quick clarification.