How to Avoid Overpaying for Car Insurance

Expert tips to save money

Illustration of a car with shattered front window Illustration: Kiersten Essnpreis

Always review your car insurance at policy renewal time to be sure that you have the right coverage at the best price. Basic insurance policy coverage includes:

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Liability: Required by law in most states, it covers damage to someone else’s car and related medical expenses.

Collision: Usually optional (though it could be required by a lender or if you lease the car), this pays for collision-related repairs to your own vehicle.

Comprehensive: This is optional and protects against damage to your car not caused by a collision (such as if a tree limb falls on it). It can provide valuable additional protection for owners of newer cars, which would be very expensive to repair or replace.

Below are explanations of other coverage you may be offered, with expert advice to help you decide which is worthwhile.

Glass Replacement

Coverage for a windshield or windows damaged in a crash is usually included in collision policies. Comprehensive policies will often pay to repair or replace glass due to noncollision incidents, such as storms, attempted theft, or a pebble from the roadway striking the windshield. Without that coverage, those types of repairs, which can be costly, are not covered. If your car is equipped with Advanced Driver Assistance Systems (ADAS), make sure your auto glass policy will pay for the required sensor calibration, which makes the cost much higher than a conventional windshield replacement.

Gap Insurance

This is coverage you may want to skip. It’s designed to protect people who owe more on their loan than the car is worth, in case it’s totaled and collision insurance won’t cover the full value of the loan. But Douglas Heller, director of insurance for the Consumer Federation of America, says that most people never use this coverage and that it’s more of a moneymaker for insurance companies. “The people at most risk of having their outstanding loan exceed the value of their car are people who cannot get loans at reasonable rates," he says. “It is another way that the financial services sector punishes people for their poverty.”

Rental Car Reimbursement

This covers the cost of a rental car while your vehicle is being repaired. Rental car reimbursement is limited by dollar amount rather than time, so calculate to make sure you have enough insurance to cover at least a week or two in case the car needs a big repair. “The good news is that you can increase your coverage," says Divya Sangam, an insurance spokesperson at the consumer financial information website ValuePenguin. She recommends calling a few rental agencies in your area to get an idea of what daily and weekly rates are so that you can determine the coverage limit that’s right for you.

Uninsured Motorist Coverage

This protects you from having to pay for damage to your car and injuries to yourself and your passengers caused by someone who is uninsured. Without this coverage, you may end up having to take the uninsured motorist to court to recoup anything you spend to repair your car and for medical treatment related to the crash. According to Heller, 1 of every 10 crashes involves a motorist who doesn’t have insurance. How much coverage do you need? Heller says it’s a good idea to have the dollar amount of your uninsured motorist coverage equal that of your liability coverage.

Editor’s note: This article also appeared in the July 2022 issue of Consumer Reports magazine.

Head shot of CR Autos Editor, Benjamin Preston

Benjamin Preston

My reporting has taken me everywhere from Baghdad, Iraq, to the Detroit auto show, along the U.S.-Mexico border and everywhere in between. If my travels have taught me anything, it's that stuff—consumer products—is at the center of daily life all over the world. That's why I'm so jazzed to be shining light on what works, what doesn't, and how people can enrich their lives by being smarter consumers. When I'm not reporting, I can usually be found at home with my family, at the beach surfing, or in my driveway, wrenching on my hot rod '74 Olds sedan.