What types of car insurance are there and which one should I choose?

First of all, it is important to know that US law requires all vehicles to have liability insurance, whether or not they are in circulation. This is what is commonly known as "third party insurance" and can result in a penalty if you do not have it. This insurance is only not mandatory when the car is temporarily or definitively deregistered in the DMV.

Types of car insurance
In addition, there are other types of car insurance with which to have other types of coverage. We will analyze what types of car insurance exist, what their coverages are and how we can get the most out of them.

Liability insurance or third party insurance

This is the mandatory insurance that all vehicles circulating in US. It is usually the most economical option, but also the most basic and with the fewest benefits.

This compulsory policy covers at least the civil liability of the driver. That is to say, in case of having an accident and being responsible for it, the insurance will cover the personal and/or material damages caused to the others involved in the accident (occupants of the vehicles, pedestrians who may have been involved) or to the public road, leaving out of the coverage the damages caused both to the driver and to his own car.

Most insurance companies offer two types of third party insurance: basic or extended, depending on the coverage contracted.

Basic third party Insurance

The basic third party insurance complies with the mandatory legal coverage of the driver's civil liability and may also include the following guarantees:

Voluntary civil liability: this is an extension of the compulsory civil liability and involves an increase in the economic limits imposed by law in order to cover the relevant compensations, in case they are not sufficient.
Travel assistance: this guarantee acts in situations of breakdown or accident and covers roadside assistance, although there may be differences between insurers: some require the repair to be carried out in a garage close to the place of the accident, while others allow choosing the place of repair.
Legal defense: third party car insurance also covers you for judicial and extrajudicial legal assistance derived from a traffic accident with the insured vehicle. In general, this coverage assumes the expenses of the process and puts at your disposal different legal services.
Damages to the driver: many companies also include this coverage within the most basic third party insurance.

Extended third party Insurance

If what we are looking for is an extension of the guarantees but without reaching a fully comprehensive insurance, there are different types of extended third party insurance that will offer us more benefits depending on our needs.

Adding more benefits to the third party insurance will offer us the possibility of protecting our vehicle even more against possible accidents. The most common benefits that are usually included in an extended third party insurance are: glass breakage, theft, fire or explosion, withdrawal of driving license…

Comprehensive Insurance

Comprehensive or full coverage insurance is the most complete type of insurance and is the one that offers the greatest peace of mind in the event of any eventuality. This type of insurance, in addition to covering damages to third parties, includes own damages and all those exclusive services that you have chosen to contract.

In addition, each insurer will offer other services exclusive to fully comprehensive insurance with which to improve your benefits.

We often hear the term excess when referring to comprehensive insurance, but what does it mean to take out comprehensive insurance with excess?

Comprehensive Insurance with deductible

Taking out comprehensive or full insurance with deductible means that, in the event of an accident, the car will be repaired by the insurance company for the amount exceeding the deductible. That is to say, the owner will only pay the amount of the deductible and the insurance will take care of the rest of the amount. For example, in a comprehensive insurance with an deductible of $300, if the repair of the vehicle costs $3,000, the owner will only pay the $300 of the deductible and the insurance company will assume the remaining $2,700.

In general, taking out full comprehensive insurance with deductible is a more economical option in exchange for assuming part of the cost of repairs.