Types of Car Insurance
There are several types of car insurance coverage that can protect you and your passengers if you’re in a car accident. Some coverages are required by state law. We can help you learn about the most common car insurance coverages and determine what you need.
Liability coverage
Liability coverage helps cover the cost of injuries and damage to other people and their property in an accident you caused.
If you’re responsible for a car accident, bodily injury liability can help pay for medical bills, lost wages, legal expenses and funeral expenses. Property damage helps pay for damages to someone else’s property that you caused.
Collision coverage
If your car is damaged due to an object or accident with another car, then collision coverage can help pay for repairs to your own car.
If you’re leasing a car or have a loan, you’ll likely be required to purchase collision coverage. However, this coverage isn’t required by states.
Collision coverage typically requires you to pay a deductible before the insurance company will pay for any damages.
Comprehensive coverage
If your car is damaged from something other than a collision, comprehensive coverage could help. This coverage protects you if your car is damaged from theft, vandalism and certain natural disasters.
Comprehensive coverage, like collision coverage, will likely be required if you have a lease or a loan.
Like collision, comprehensive coverage usually requires policyholders to pay a deductible so that your insurance company will pay for car damages.
Uninsured and underinsured motorist coverage
Uninsured motorist coverage (UM) can help cover medical bills if you’re in a car accident that’s caused by another driver who doesn’t have any insurance.
Underinsured motorist coverage (UIM) can also help you if you’re in an accident that’s caused by a driver who doesn’t have enough liability coverage to cover your medical bills.
Your vehicle can also be covered if it’s damaged, but this will vary by state.
Medical payments coverage
Medical payments coverage covers yourself and other passengers in a car if there are any injuries from a car accident — regardless of whose fault it is. This coverage can help you pay for ambulance bills as well.
Medical payment coverage is an optional coverage.
Personal injury protection
If you’re in an accident, personal injury protection (PIP) helps pay for injuries to you and the passengers in the car, regardless of whose fault it is.
Personal injury protection may also cover lost income.
Other types of car insurance
You can also purchase optional coverages for your car depending on your needs. These include:
Gap insurance
If your car is totaled, gap insurance can cover the difference between the remaining amount on your car loan and the settlement amount you received from the accident.
Rental reimbursement insurance
Rental reimbursement insurance helps pay for a rental car if your car is being repaired after a covered loss.
Rideshare insurance
If you’re a driver for ridesharing services like Uber or Lyft, there can be gaps in your car insurance — that’s where rideshare insurance comes in. For example, this coverage could help pay for incidents that happen while you’re waiting to accept a passenger.
Emergency road service insurance
If your car breaks down while driving, emergency road service coverage can cover the cost of a tow truck, locksmith and deliveries, like gas and oil.
Classic car insurance
If you have a classic car, then you may need unique protection — which is where classic car insurance comes in.
For instance, classic car insurance can take into account the higher actual value of collectable autos, and also account for vehicles that are rarely driven.
What car insurance coverage is required?
Car insurance requirements can vary by state. However, most states require drivers to have some car insurance.
- Liability: Most states require drivers to have liability coverage. The minimum amount of liability coverage you have to purchase varies by state. For example, in Florida, you’re only required to have property damage liability and not bodily injury liability. In most states,meanwhile, the minimum amount of bodily injury liability coverage is $25,000.
- UM and UIM coverage: Some states require you to purchase uninsured and underinsured motorist coverage. In other states, where these coverages are optional, insurance companies may be required to offer these coverages but you’ll be able to reject them.
- PIP: Some states require you to have personal injury protection. You can be required to purchase this coverage if you live in a no-fault insurance state. The following states are no-fault:
No-fault States
- Florida
- Hawaii
- Kansas
- Kentucky
- Massachusetts
- Michigan
- Minnesota
- New Jersey
- New York
- North Dakota
- Pennsylvania
- Utah
If you live in New Hampshire, you are not required to purchase car insurance. However, you have to have enough funds to meet the state’s financial responsibility requirements in case you’re responsible for an accident. In Virginia, you’re allowed to drive without car insurance if you pay a $500 uninsured motor vehicle fee.