NerdWallet's Smart Money Podcast
How to Get Ready for a Recession and Choose Enough Car Insurance
Thu, 27 Mar 2025
Learn how to prepare for a possible recession and make sure your car insurance coverage is enough to protect your finances. What should you do to get ready for a recession? How much car insurance coverage do you really need? Hosts Sean Pyles and Elizabeth Ayoola discuss recession risks and car insurance basics to help you understand how to protect your finances. Joined by NerdWallet senior news writer Anna Helhoski, they begin with a discussion of recession warnings, with tips and tricks on budgeting with the 50/30/20 rule, building an emergency fund, and prepping your credit and savings. Then, insurance Nerd Lisa Green joins Sean and Elizabeth to discuss how to choose the right amount of car insurance. They discuss the difference between liability, collision, and comprehensive coverage, what minimum insurance limits really protect you from (and what they don’t), and how umbrella policies and uninsured motorist coverage can add extra protection. You’ll also hear ways to lower your car insurance bill by shopping around, raising your deductible, and finding overlooked discounts. Compare auto insurance rates in 2 minutes with NerdWallet’s auto insurance finder: https://www.nerdwallet.com/insurance/l/auto-insurance-finder In their conversation, the Nerds discuss: how to prepare for a recession, signs of a recession, what happens during a recession, 50/30/20 budget rule, building an emergency fund, credit during a recession, umbrella insurance, what is umbrella insurance, car insurance basics, collision vs comprehensive coverage, liability car insurance explained, full coverage car insurance, what is full coverage insurance, auto insurance deductible, underinsured motorist coverage, car insurance tiers, how to save on car insurance, shopping for car insurance, car insurance comparison tips, high liability coverage, car insurance for old cars, what is property damage liability, what is bodily injury liability, best car insurance coverage, understanding insurance limits, home and auto umbrella policy, recession impact on prices, recession and interest rates, how long recessions last, economic indicators of recession, consumer sentiment recession, car insurance for risky drivers, and auto insurance discounts. To send the Nerds your money questions, call or text the Nerd hotline at 901-730-6373 or email [email protected]. Like what you hear? Please leave us a review and tell a friend.
Chapter 1: What is this episode about?
Well, Elizabeth, there's a word out there that we haven't heard bandied about for a while now. It's not a word we like, but it's a word we need to address.
Is this the R word, Sean?
It is. Recession. It's cropping up in discussions of the economy, so today we're going to talk about the likelihood of one and how to prepare for it. Welcome to NerdWallet's Smart Money Podcast, where you send us your money questions and we answer them with the help of our genius nerds. I'm Sean Piles.
And I'm Elizabeth Ayola.
This episode, we're answering a listener's question about car insurance.
Car Insurance 101.
What's the difference between collision and comprehensive? We'll ask our nerdy expert for some definitions and best practices. But first, some definitions of another kind in our weekly Money News Roundup, where we break down the latest in the world of finance to help you be smarter with your money.
Today, our news colleague, Anahil Hoski, is here to talk with us about recessions. So, Anna, are we in a recession right now? Are we in danger of entering one? Should people be preparing?
Hey, so the short version is no, maybe, and it's not a bad idea.
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Chapter 2: Are we currently in a recession?
Wow. I know nobody asked me, but my biggest fear is dying in a car accident. Let's talk about the different coverages you're paying for with car insurance. Lisa, can you run through maybe the top three most important coverages people should keep in mind as they look for car insurance?
Absolutely, Elizabeth. Let's talk first about liability insurance. Liability means that you are legally responsible for damage that you cause as a driver. So if you hit a person with your car, you are probably liable for their injuries. You are legally responsible, and so you may be required to pay for their medical treatment. If you hit someone's property with your car,
you are probably liable for the property damage that you caused, and you may be required to pay the cost to repair that damage. Because of this, liability insurance is the first type of coverage that you'll buy. Liability insurance is designed to pay the expenses that you are liable for if you cause an accident. In most states, you must have liability insurance in order to legally drive.
But people should know that liability insurance doesn't cover damage that happens to your own vehicle as a result of an accident or some other automotive misfortune that you might be responsible for, right?
That's right. Liability insurance is mostly about protecting other people from you. If you smash into someone else's car, liability insurance will pay to fix the other person's car. But for fixing your own car, you're on your own. This is why a lot of people will want two other types of car insurance. First, we have collision insurance.
Collision insurance will pay to fix or replace your car in a crash that you cause. You'll normally have a deductible to pay, like let's say the first $1,000 of repair expenses, and then the collision insurance will cover the rest. Collision insurance will also pay to fix your car in certain other situations, like if you're the victim of a hit and run. And then there's comprehensive insurance.
This helps replace your car if it's stolen or fix it if it's damaged by something like a tornado or a fire or hitting an animal. So there you have the three major types of coverage, liability, comprehensive, and collision. A lot of times people will buy these three types together, and that's called full coverage.
If you have a loan or a lease on your car, your lender will probably require you to have full coverage.
So Lisa, it sounds like liability coverage is the most important for many people. So can you tell us what goes into liability coverage?
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