WE LIVE IN USA

Car insurance is so expensive!! Buying car insurance in the U.S.: full coverage, partial coverage and basic coverage explained

In the U.S., buying car insurance is something every car owner has to deal with, but for newcomers the types of coverage and the fine print can be confusing. The common types are full coverage, liability insurance (often called "half coverage") and minimum coverage. This article will help you understand how they differ and how to pick the right plan for your needs.

1. Full Coverage

Full coverage isn't a single type of insurance. It's a combination of several coverages, usually including:

  • Collision Coverage: if you accidentally hit another vehicle or object, this pays to repair your car.
  • Comprehensive Coverage: covers damage not caused by a collision, such as theft, fire, storms or hitting an animal.
  • Medical Payments Coverage: if anyone is hurt in an accident, this pays the medical bills.

Pros:

  • Broad protection: damage to you and to others is covered.
  • Good for new or higher-value cars.

Cons:

  • Expensive, especially for new or high-end cars.

2. Liability Insurance

Liability insurance is usually the insurance the state requires every car owner to buy. It has two main parts:

  • Property Damage Liability: if you damage another vehicle or property in an accident, this pays for it.
  • Bodily Injury Liability: if you injure someone in an accident, this pays their medical bills.

Pros:

  • Relatively cheap, and it meets the minimum insurance requirement.
  • When you cause an accident, it helps pay for the other party's losses.

Cons:

  • It only covers other people's losses; damage to your own car and your own injuries are not covered.
  • It only applies when the other party suffers a loss and gives you no protection of your own.

3. Minimum Coverage

Minimum coverage is the least insurance the state requires a car owner to carry, usually including:

  • Property Damage Liability
  • Bodily Injury Liability

Pros:

  • The cheapest option, and a workable choice for owners on a tight budget.

Cons:

  • Very limited protection: it only covers other people's losses and injuries and does almost nothing for you.

4. How do you choose the right insurance?

To choose the right car insurance, start by considering these factors:

  • Age and value of the car: new cars usually get full coverage, while older cars can go with cheaper liability or minimum coverage.
  • Budget: full coverage premiums are usually higher, so decide based on your budget.
  • Driving habits: if you drive a lot and in high-risk conditions, full coverage gives you more protection.

5. Major U.S. car insurance companies

Here are some of the major car insurance companies in the U.S. Compare the plans they offer to find the right one for you:

6. Frequently Asked Questions (FAQ)

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

Q: How much does insurance cost? Premiums vary with your car, driving record, age and other factors. In general, minimum coverage is cheap and full coverage costs more.

Final thoughts

Choosing the right car insurance matters a lot: it protects you from losses and eases the financial hit if you have an accident. Pick the type of coverage based on your car, budget and needs, and compare the major insurers to find the plan that suits you best.

[Further reading] 

Buying a Car in the U.S.: How to Choose Between Cash, a Loan and a Lease, and How Your Credit Score Affects the Deal

I'm C.  I'm from Taiwan and now run a business in Los Angeles. When I first arrived, the challenges were everywhere! From the language barrier to culture shock, every small detail took me a long time to figure out. Those experiences taught me how to adapt quickly here, until I was in my element. I've put years of that experience on this site to help newcomers like me settle into life in the U.S. more easily and quickly. Whether it's moving here, finding a job or handling everyday tasks, you'll find plenty of practical shortcuts and solutions so you can skip the detours. I hope what I share helps you start your new life in America smoothly, with less effort and a lot more fun!

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