4. When Accidents Happen: Collision Coverage

Collision insurance funds the repair or replacement of your car following a crash, entirely regardless of who is to blame. This kicks in whether you rear-end another driver, sideswipe a stationary object like a guardrail or streetlamp, or suffer a vehicle rollover.

To utilize collision coverage, you must first choose a deductible—the predetermined out-of-pocket sum you agree to pay before the insurer covers the rest. Opting for a higher deductible will lower your monthly bills, but it demands a higher cash layout if an accident occurs.