Collision insurance covers damage to your vehicle resulting from a crash with another vehicle or object, regardless of who is at fault. Comprehensive insurance covers damage to your vehicle from non-collision events, such as theft, vandalism, fire, weather, or hitting an animal.

Liability insurance is a required coverage in most states. It covers the costs for damages and injuries you cause to others in an at-fault accident. It does not cover damages to your own vehicle or your own medical expenses.

A deductible is the amount of money you must pay out-of-pocket before your insurance company begins to pay for a covered claim. For example, if you have a $500 deductible and a covered loss of $3,000, you pay the first $500, and your insurer pays the remaining $2,500.

Car insurance is mandatory in 49 of the 50 U.S. states and the District of Columbia. New Hampshire is the only exception, though drivers there are still required to show proof of financial responsibility if they are liable for an accident.

Insurance premiums are determined by a wide range of factors, including your driving history (accidents, tickets), the type of vehicle you drive, how much you drive, where you live, your age, your gender, and the types of coverage, limits, and deductibles you choose.

You can lower your premium by taking a defensive driving course, bundling multiple policies with one insurer (e.g., home and auto), increasing your deductible, and maintaining a clean driving record. Many companies also offer discounts for good students, installing anti-theft devices, or going paperless.

This coverage protects you and your passengers if you are involved in an accident with a driver who either has no insurance (uninsured) or does not have enough insurance to cover the full cost of the damages and injuries they cause (underinsured).

A car is considered totaled when the cost of repairing the damage exceeds its actual cash value (ACV). If you have the appropriate coverage, your insurance company will pay you the car's ACV, minus your deductible.

In most states, insurance companies use a "credit-based insurance score" to help predict the likelihood of you filing a claim. A better credit history can often lead to a lower premium, while a poor credit history may result in higher rates. This practice is prohibited in California, Hawaii, and Massachusetts.

Your personal auto insurance may extend to a rental car, but it is not guaranteed. You should call your agent to see what your policy covers before renting a car. Most U.S. policies do not provide coverage for driving in Mexico.