How to Compare Car Insurance Coverage (Deductibles, Limits, and More) 

When comparing quotes for new car insurance coverage, consider more than just the cost. You could find the cheapest auto insurance rates available — but if the coverage barely protects you, is it worth the price? 

For military members and their families, there’s another layer to the process of comparing car insurance quotes, too. Not only do you want an affordable rate, but you may have coverage considerations that are different from those of everyday civilians. Frequent relocations, variation in state coverage requirements, and the potential for deployment all add complexity to your shopping.

In our guide below, learn how to compare key elements of your car insurance quote to ensure you’re getting the right coverage at the lowest price. We’ll show you what military members need to keep in mind when choosing an insurance provider, and help you avoid common car insurance mistakes that could wind up costing you.

Why Comparing Coverage Matters More Than Price

You could buy a cheap car insurance policy, but a low price often means low protection. As you may guess, the cheapest policies tend to offer the least amount of coverage. If you’re in an accident, your policy might not cover everything. Such a coverage gap could leave you to pay the rest out of pocket, which could be tens of thousands of dollars, depending on the damage or injuries caused.

For example, what if you cause $20,000 in damage, but you only have $5,000 in property damage liability coverage? You could be liable for the other $15,000 out of your own pocket. Consider that the average price of a new vehicle is now $50,000, and that a hospital bill after a car accident could be $15,000 (or much more). 

Without enough car insurance coverage, you could be responsible for paying those bills out of your own pocket.

Understanding Liability Coverage Limits

Some level of car insurance is legally required in almost every state, but the minimum amount you need to have varies. 

According to the Insurance Information Institute, most states require at least two types of liability coverage:

• Bodily injury liability: This helps cover your liability when someone other than you is hurt or killed in an accident you caused. It can cover medical costs, legal fees, lost wages, and funeral costs if someone dies. But it is important to note that it doesn’t cover costs for your own injuries or missed work. (In Florida, PIP is acceptable in lieu of BI liability.)
• Property damage liability: Covers the damage you cause to someone else’s property in an accident. It can cover damage to their vehicle as well as buildings, fences, lampposts, trees, and other property. But again, it does not cover damage to your own vehicle or property.

Some states also require other types of coverage, such as medical payments (MedPay), uninsured/underinsured motorist coverage, and personal injury protection (PIP).

Comparing Coverage Limits

Coverage limits are the maximum amount your insurer will pay out for a covered claim. They’re usually written as numbers, such as 25/50/25. That translates to:

• $25,000 in bodily injury liability per person
• $50,000 in total bodily injury liability per accident
• $25,000 in property damage liability per accident.

However, state minimum coverage limits often are too low for today’s cost of medical treatment and vehicle repair or replacement.

Suppose you have 25/50/25 coverage. You’re driving off-base and cause an accident, injuring the other driver, two passengers, and damaging a homeowner’s fence. Your insurance could pay up to $50,000 toward the injuries you caused and $25,000 toward the fence and the other driver’s damaged vehicle. 

But if their hospital bills come out to $75,000, and their vehicle damage plus fence repair costs $30,000, you’d have to pay the difference out of your own pocket: $75,000-$50,000 is $25,000 out-of-pocket for your bodily injury liability, and $30,000-$25,000 is $5,000 out-of-pocket for your property damage liability, not including any legal fees.

That’s why many experts recommend much higher coverage limits, regardless of your state’s minimum requirements. Coverage limits of 100/300/100 are much more likely to cover your liability in an accident, so you can avoid paying thousands out of pocket. 

In the example above, you’d be completely covered if your limits were 100/300/100. The price of your insurance would likely be a little higher, but the savings would be significant if you were in an accident.

What Deductibles Are and How They Work

When comparing policies, don’t just look at the cost of the premiums. Pay attention to the deductible offered so you can compare apples to apples. Raising or lowering the deductible on a policy can change the price of coverage.

If you add optional coverages like comprehensive and collision (commonly known as “full coverage”), you’ll need to select a deductible when purchasing the policy.

Deductibles are the portion of a repair bill you pay yourself before insurance kicks in. A common deductible level is $500, but it typically ranges from $100 to $2,000. 

Here’s how a deductible works: Suppose your car is damaged in a hailstorm. You have full coverage car insurance with a deductible of $250, and the repair estimate is $2,000. If you file a claim, you cover the first $250 of the repair bill, and insurance covers the other $1,750.  

Lower deductibles mean you have to pay less out of pocket after a claim, but your premiums will usually be higher. If your deductible is high, you’ll pay more after a claim, but your premiums will be lower. It’s a tradeoff between cost and risk. 

Collision vs Comprehensive Coverage

A “full coverage” car insurance policy typically includes both collision and comprehensive insurance. These coverages add financial protection for your vehicle if something unexpected happens. When you’re comparing car insurance quotes, make sure they include the same coverage types.

• Collision: This helps cover damage to your car after an accident. It covers the cost to repair or replace the vehicle, minus your deductible. It can help cover damage to your vehicle if you hit another car or another car hits you. It can also help pay for repairs if you hit something else with your car, like a mailbox, building, streetlamp, or guardrail.
• Comprehensive: This covers damage that’s caused by things other than accidents, like vandalism, fire, theft, or storm damage. So if you park on a city street and someone steals your car, comprehensive coverage could help you replace it. 

When comparing policies, remember to check whether they cover the replacement value of the car (how much it costs to replace it with a new car) or the actual cash value (how much the car was worth right before it was damaged). That can affect the amount you receive if your car is totalled and you file a claim.

Other Coverage Types to Compare

As you’re comparing quotes, consider the other coverage options available to you. Additional coverage options might increase your premium, but they’ll also provide more financial protection. Some other options you can add to your insurance policy include:

• Uninsured/underinsured motorist: Depending on your state and policy, UM/UIM insurance covers you if you’re in an accident and the other driver doesn’t have insurance, or doesn’t have enough to cover the damage to your vehicle or your injuries. So if another driver T-bones you in a hit-and-run, your UM/UIM coverage could kick in. Otherwise, you’d have to try to track down the other driver and sue them if you wanted to recover your costs.
• PIP/MedPay: Personal Injury Protection and Medical Payments are two types of insurance that help cover medical expenses after an accident, regardless of whose fault it is. Whether PIP and MedPay are mandatory or optional varies by state. Although your Tricare or VA health benefits will typically cover your medical care after an accident, it’s worth considering MedPay or PIP, as they could help cover medical costs for your passengers. And keep in mind that Tricare can demand full reimbursement after a settlement from an at-fault driver.
• Rental reimbursement: This coverage provides a rental car for you to drive while your vehicle is being repaired after an accident. It can be useful if your car is damaged and needs repairs, but you still need to report for duty. 
• Roadside assistance: When you add this coverage, you can call your insurance company when you break down to get a tow, a battery jump, a spare tire, or additional fuel. Don’t sign up without first checking whether you receive this benefit from other sources, like your credit card.

How to Compare Two Insurance Quotes Side-by-Side

Once you’ve decided the right coverage options and limits for your situation, start collecting quotes from several insurance companies. Compare them side-by-side to see how they stack up. Here’s how:

1. Match liability limits: Make sure the bodily injury and property damage coverage limits are the same for each quote. 
2. Match deductibles: If you’ve added collision and comprehensive, compare the deductibles. Different deductibles could affect your costs.
3. Compare coverage types: Do both quotes contain the same type of coverage, and does that coverage match up with your needs? 
4. Compare total cost: Finally, what’s the premium for each quote? Is that monthly, biannually, or yearly? Be sure to include all discounts you may be eligible for, such as your military or veterans discount.

You can compare quotes yourself by taking notes and tracking information for each insurer. You can also use quote comparison sites that automate much of the work for you, or contact an independent insurance broker to help.

Coverage Considerations for Military Families

When comparing car insurance quotes, consider the effect that a PCS move can have on your insurance. If you receive PCS orders to another state, that could change your liability requirements. You may discover that you suddenly need different coverage in your new state, at higher coverage limits. Optional coverages may now be mandatory, or vice versa. That’s why it’s particularly important to review your policy every time you move—and don’t wait too long, or you could risk being underinsured.

You might also face drastically more expensive insurance rates when moving to a new state. You might need to make changes to your policy or re-shop for coverage, as the cheapest insurer in one state might not be the best for a different state. Insurance is regulated by state, so it’s worth familiarizing yourself with the requirements of your new location every time you move.

Another consideration is the possibility of deployment, which could affect your car insurance needs. Some insurers, like USAA, offer special discounts for deployment, which could help you stay covered without overpaying for insurance. If you expect to be deployed soon, decide what you’ll do with your car (such as storing it or leaving it with a family member), and be prepared to adjust your coverage if necessary. You might need to re-shop to find a policy that works for you while you’re deployed.

Common Mistakes When Comparing Insurance

As you’re shopping, remember to look at the big picture. Plenty of people dread comparing car insurance quotes and have plenty of other things they could be doing instead. But speeding through the process too quickly could make life more expensive than it needs to be. Here are a few mistakes to watch out for as you compare rates:

• Focusing only on price: A cheap policy might offer skimpy coverage, leaving you to pay out-of-pocket later when something goes wrong. Look for value instead: the right coverage for a competitive price.
• Not paying attention to coverage limits: Your coverage limits determine the insurance payout you could get if you needed to file a claim. At the bare minimum you’ll need to meet your state’s liability requirements, but for better financial protection, choose higher limits — 100/300/100 can offer better coverage.
• Misunderstanding your deductibles: Your deductible is what you pay out of pocket for repairs. You can choose a higher deductible to save a little on your premium, but make sure you can afford to pay it if you need to file a claim.

Bottom Line

The best policy is not always the cheapest: it’s the one that protects you properly. Compare multiple insurers to find the best combination of protection and value, and don’t skimp on coverages you need just to save a buck. When you understand how to compare car insurance quotes, it’s easier to shop for coverage when your situation changes, as it often does when you’re in the military.