How to Review Your Car Insurance Coverage

Reviewing Your Car Insurance Coverage Can Save You Money

Insurance adjuster assessing damage to car
Photo: Echo / Getty Images

Whether you’re shopping for a new insurance company or renewing your existing auto insurance policy, it pays to review your coverage and deductible and look for any discounts you are eligible for.

Taking a close look at your policy can help you determine whether you should discontinue some types of coverage, increase limits on other types, or add types of coverage to broaden your financial protection. A careful car insurance review can help you save money and alert you to inadequate coverage that might be putting your assets at risk.

How to Check What Your Policy Covers

Car insurance policies include different types of coverage, some of which are required by law or mandatory for leased or financed vehicles. Others are optional. You can find all of this information on your policy's declaration page, which is typically the first page of your policy. Review it carefully to make sure all information is correct.

This page often includes:

  • The name of the insurance company
  • Your name and address
  • The policy number
  • The effective and renewal dates of coverage
  • A list of drivers
  • Details about your vehicle, such as its make, model, and vehicle identification number
  • Kinds of coverage and their limits
  • Deductibles
  • Premiums for each coverage type
  • Endorsements or riders

Some types of coverage are subject to limits, and others to a deductible, which is an amount of money you must pay before your insurer will pay any money toward your claim. It might sound like a bother, but it’s important to periodically review, and maybe alter, these limits and deductibles, especially before renewing your policy or switching to a new carrier.

Reviewing Your Auto Coverage Details

Liability coverage

If you’re at fault in an accident, your bodily injury liability coverage will pay the medical expenses of the other driver and their passengers. Likewise, your property damage liability coverage will pay to repair the other driver’s vehicle.

You can choose the limits for both kinds of liability coverage. For instance, your policy may pay up to $50,000 per accident for bodily injuries and $25,000 for property damage.


If the costs of an accident exceed your policy's limits, you’ll be liable for the remaining expenses.

State laws require car owners to buy minimum amounts of liability insurance for bodily injury and property damage. For example, California requires drivers to carry at least $15,000 in bodily injury liability coverage per person and $30,000 per accident, plus $5,000 in personal property liability coverage.

However, mandatory liability coverage amounts don’t provide all the protection you might need. On average, a three-day hospital stay costs about $30,000, according to the U.S. Centers for Medicare and Medicaid Services. If you’re at fault for an accident that causes serious injuries or property damage, the minimum amounts probably won’t provide enough financial protection.


If your policy provides only minimum liability limits, you may want to consider increasing your coverage to somewhere between $100,000 and $300,000.

Physical Damage

Collision and comprehensive types of coverage protect your automobile. Collision insurance pays to repair or replace your car following an accident with another car or an object such as a utility pole. It also covers you if your car flips over or if you have damage caused by a pothole.

Comprehensive coverage pays to replace stolen vehicles and covers non-collision damages caused by falling objects, fires, floods, storms, vandalism, or wild animals like deer.

State laws don’t require you to carry collision or comprehensive coverage. But if you finance or lease a car, the lender or leasing company will require you to buy both kinds of coverage.


After you pay off your automobile, you will be able to drop these types of coverage. But before you do so, you should first consider whether you could afford to replace your car if it were stolen or totaled.

If your vehicle has a market value of $5,000, and your collision insurance has a $500 deductible, it makes good financial sense to keep the coverage. But if the car is worth only $1,000, the cost of insurance likely outweighs the benefit of collision coverage.

Comprehensive coverage is more affordable than collision insurance—about $134 per year, on average—making it a good value if your car still has a market value of a few thousand dollars. 

Medical Coverage

Medical payments (also known as "med pay") coverage helps pay the medical expenses of you and your passengers after a covered accident. Medpay insurance is required by law in only three states: Maine, New Hampshire, and Pennsylvania. Other states require insurance companies to offer medpay coverage, but drivers do not have to buy it.


In New Hampshire, you are not required to buy auto insurance if you can demonstrate that you have the financial resources to pay for damages resulting from an accident. If you do have auto insurance, you are required to buy medpay coverage.

Medpay coverage can provide worthwhile protection, even if you have health insurance. While medpay coverage only pays for expenses up to a specified limit, it pays for a wide variety of medical-related costs: health insurance co-payments and deductibles, ambulance service, doctor’s visits, hospitalization and extended nursing care, surgery, funerals, prosthetic limbs, and even dental work.


Medpay insurance is not limited to your own car. It also covers you if you are injured while walking or riding in someone else's car.

Personal injury protection (PIP) coverage is similar to medpay coverage, but it pays for extra things like lost wages and the costs of services you can’t perform for yourself while you are recuperating from injuries, like childcare and lawn maintenance.

States with no-fault insurance laws require you to purchase a certain amount of PIP coverage. In no-fault states, anyone who has been involved in a car accident must file a claim with their insurance company, regardless of whether they were at fault.


The cost of PIP insurance is often a good deal higher than for medpay insurance, but the limits on what it will pay for certain expenses also tend to be higher.



Deductibles apply to collision and comprehensive coverages. The deductible is the amount you must pay following a covered loss. It's usually a dollar amount rather than a percentage. For example, if you have a $1,000 collision deductible, and your car sustains $2,500 in damages, the carrier will pay a maximum settlement of $1,500.

Increasing your deductible will lower your policy’s premium. You should avoid setting your deductible too high; it ought to be at a level you can afford to pay out of pocket.

Insurers often allow you to set separate collision and comprehensive deductibles. Since comprehensive coverage is typically more affordable than collision insurance, consider choosing a lower comprehensive deductible to get the best benefit for relatively minor claims, such as a broken windshield.


Your policy may include endorsements, or riders, which are optional add-ons that amend its standard coverage. For example, it might have endorsements for full glass replacement, rental car reimbursement, or roadside assistance.

Typically, you can add these coverage options when you purchase or renew a policy. If you’re about to renew your policy, review the extras you already have, and look for others offered by your insurer in case your needs have changed.

Looking for Discounts

Insurers offer a wide range of car insurance discounts and usually allow you to stack several discounts for which you qualify, enabling you to get the greatest amount of savings. If you’re not sure whether you qualify for one or more discounts, ask your insurance agent. The most common discounts include:

  • Multi-policy, also known as "bundling"
  • Multi-vehicle
  • Safe driver/claim-free
  • Good student
  • Defensive driver training
  • Driver training course

Making Sure All Drivers and Vehicles Are Covered

Typically, your auto insurance policy applies to the covered vehicle, regardless of who is driving it. However, car insurance contracts vary by company, so it’s important to list all regular drivers on your insurance policy. Ask your insurance agent whether your policy will cover your automobile if you lend it to a friend or family member.


Your policy may cover your car when it is used by an unlisted driver who has permission to drive it, but might not cover it if someone takes it for a drive without permission. For instance, if a teenage neighbor takes your vehicle for a joyride and has an accident, your policy might not cover the damages.

You should also make sure you have an auto policy for every car you own. When possible, buy all of your policies from one carrier to get a multi-vehicle discount.

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The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
  1. Texas Office of Public Insurance Counsel. "What Is a Dec Page?"

  2. California Department of Motor Vehicles. "Insurance Requirements."

  3. U.S. Centers for Medicare & Medicaid Services. "Why Health Insurance Is Important: Protection From High Medical Costs."

  4. Insurance Information Institute. "What Is Covered by Collision and Comprehensive Auto Insurance?"

  5. Insurance Information Institute. "What Is Covered by a Basic Auto Insurance Policy?"

  6. Insurance Information Institute. "Insuring a Leased Car."

  7. The Zebra. "What Is Medical Payments Coverage?"

  8. State of New Hampshire Insurance Department. "Your Guide to Understanding Auto Insurance in the Granite State," Page 5.

  9. The Hartford. "What Is Medical Payments Coverage?"

  10. The Zebra. "Personal Injury Protection Insurance (PIP)."

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