Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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Laura Walker graduated college with a BS in Criminal Justice with a minor in Political Science. She married her husband and began working in the family insurance business in 2005. She became a licensed agent and wrote P&C business focusing on personal lines insurance. Laura serviced existing business and wrote new business. She now uses her insurance background to help educate drivers about...

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Reviewed by Laura Walker
Licensed Agent for 10 Years

UPDATED: Feb 3, 2020

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Almost everyone has seen the latest television commercials for all types of discount car insurance. With the downturn in the economy, it seems that every day another low price car insurance company is pedaling their wares.

Before purchasing low-cost insurance, a consumer should consider what advantages premium coverage can offer them.

Easily compare auto insurance quotes by entering your ZIP code in the FREE tool now!

Types of Car Insurance

All states require car insurance for legal drivers.

The purpose of auto insurance is to protect all persons that may be involved in an accident.

The states have set a minimum required amount of coverage for all drivers, and this is typically all that the cheaper car insurance policies cover. This type of insurance includes:

  • Auto Liability Coverage – This type of coverage pays for any damage that the covered person may cause during an accident that is their fault. The insurance typically covers damage caused to property, people, and vehicles in an auto accident. It can be further categorized into bodily injury liability and property damage liability. This coverage will usually pay for legal defense and court costs for the accident. This is the minimum coverage required by most states.

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Insurance Coverage Offered Under Premium Plans

Car insurance companies also offer features to their drivers that are not included in the basic plans. These options are what are considered to be premium. They include, but are not limited to:

  • Personal Injury Protection – This coverage pays for the medical expenses of the covered individual incurred as a result of the accident. Based on the plan and the company issuing the insurance, it can also help pay for funerals, lost earnings, and rehabilitation.
  • Medical Payments – when the insured person is injured in an accident, the medical expenses they incur are not necessarily covered under liability coverage. Medical payment coverage can be a substantial addition to most coverage. It could save the consumer thousands of dollars in the case of an accident.
  • Damage Caused by Natural Causes – Damage to a vehicle by wind, fire, floods, or earthquakes are not necessarily covered by standard insurance plans. A damaging thunderstorm can cause severe damage to a vehicle with hail, wind, and falling branches.
  • Emergency Road Services – For drivers that spend a lot of time on the road away from home, this feature of premium insurance is a major benefit. Any time a vehicle is stranded by a flat tire, no gas or other issue, emergency road service can help get the vehicle back on its way. Without insurance, the cost for these services can be quite steep and are usually required at the time of service.
  • Rental Reimbursement – when a vehicle is damaged in an accident it can take several weeks for a repair shop to fix it. During this time, a rental vehicle can become quite costly. Premium insurance plans can be designed to pay for these costs anytime the insured vehicle is in the shop due to an accident.

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What to Consider When Purchasing Car Insurance

There are a lot of issues to consider when deciding whether to buy a premium insurance plan or just the minimum coverage.

Factors to take into account include:

  • Monthly Budget – The consumer must set a limit for car insurance out of their monthly budget. The best thing to do is to shop around several reputable companies to find the most coverage for the best price.
  • Insurance Features – Each driver is different in what is important to them to be covered. Some drivers will find the emergency roadside service to be essential while others would rather have medical payments included in their coverage. After deciding which items are a must-have, the insurance plan should be customized to include those items.
  • Driving History – When deciding on how much coverage to buy, the consumer should consider the driving history of all persons that will be included on the plan. If one or more drivers are accident-prone, additional coverage should be seriously considered. If all drivers have a clean track record and typically drive in low population areas, less coverage may be all that is needed.
  • Age and Cost of Vehicles – If the age of the vehicles covered under the plan is either old or expensive, a premium plan that covers all repairs should be considered. The cost to find older or foreign parts can add up quickly. A minor fender bender can become a major financial burden for some that don’t have adequate coverage.

Considering the right type of car insurance is the best fit for a driver can save thousands of dollars over the years. All features available to them should be carefully considered before purchasing a policy.

A few dollars saved every month may sound great to a budget. However, when the coverage does not take care of the damages caused, much more money can be lost than was ever saved.

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Related Links:

  1. What is liability auto insurance?
  2. What is PIP or personal injury protection insurance?