6 Types Of Car Insurance

The six common types of car insurance are liability, collision, comprehensive, uninsured motorist coverage, MedPay, and personal injury protection.

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Written by:

Dash Lewis , Writer

Written by: Dash Lewis Content Writer

10/18/2024 12:00 AM

Key Points:

There are six types of standard car insurance, and depending on the state you live in, you might be required to carry all of them.
There are numerous optional coverages that you can choose to add to your policy for increased protection.
Every state except New Hampshire requires you to carry at least a minimum amount of liability insurance to drive legally.

There’s a lot to sort through when shopping for car insurance to fit your needs. Many types of car insurance exist, but the six most common types of coverage are:

Liability insurance
Collision coverage
Comprehensive insurance
Uninsured motorist coverage
Medical payments coverage (MedPay)
Personal injury protection (PIP)

In this article, we’ll explain each type of car insurance coverage, how it works, and why you might need it. We’ll also offer recommendations for a few of the best car insurance companies on the market today.

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Liability Coverage

If you cause a car accident and it results in property damage or medical bills for the other driver, liability insurance covers those costs. This type of car insurance is required in all states except New Hampshire. Each state sets its own minimum-liability limits.

Types Of Liability Insurance

There are two main types of liability insurance:

Bodily injury liability (BI) insurance: If you’re at fault in an auto accident, this insurance pays for the other party’s medical expenses that result from injury. It doesn’t pay for your medical bills.
Property damage liability (PD) insurance: If you cause a car accident that results in damage to the other party’s vehicle or property, PD insurance helps cover the cost of repairing that damage.

It’s important to keep in mind that liability car insurance won’t cover your damages or injuries if you’re in an at-fault accident–it only pays for damage caused to other drivers and their property.

Should I Carry Liability Insurance?

Nearly every state requires liability insurance to legally drive. Though New Hampshire allows drivers to opt out of liability insurance, doing so isn’t recommended.

Liability insurance covers any damage you may cause to other drivers and their property. If you’re unable to pay for damages out of your own pocket, you could be sued, which could be costly.

Collision Coverage

Collision insurance covers your vehicle for any necessary repairs in the event of an accident, no matter who’s at fault. It will also pay to replace your car if it’s been deemed a total loss. Additionally, this type of insurance covers damage caused by a hit-and-run or a collision with a tree, fence, or guardrail. Damages from road hazards like potholes are also taken care of. Unlike liability insurance, collision insurance applies to your vehicle only.

Collision insurance won’t cover damage or injuries from non-crash incidents, including the following:

A collision with a deer, moose, or other large animal
Damage from theft or vandalism
Flood, fire, or hail damage
Damage from objects like tree branches or boulders falling onto your vehicle

These types of incidents are all covered by comprehensive insurance.

Should I Carry Collision Coverage?

While collision coverage is not required to drive legally, we recommend it for those who can afford it. As vehicles become increasingly high-tech, they also become increasingly expensive to repair. Unless you have a significant amount of money set aside specifically for vehicle repairs, collision insurance is usually a good investment.

You can purchase collision insurance from all insurance companies as part of a full-coverage policy. Insurers use the actual cash value (ACV) of your vehicle minus your deductible to determine your maximum amount of collision coverage.

Collision always includes a deductible that you’ll need to pay out of pocket before coverage kicks in.

Comprehensive Coverage

While collision insurance covers your car if you get into an accident, comprehensive insurance covers your vehicle while it’s parked. It also fills in some of the gaps left by collision insurance.

Generally, comprehensive insurance covers theft and vandalism to your car, as well as damages from:

Rodents and other pests
Floods, fire, and hail
Tornadoes, hurricanes, and other natural disasters
Falling objects

Similar to collision insurance, insurers use the ACV of your vehicle minus your deductible to determine the maximum amount of comprehensive coverage available to you. And like collision coverage, comprehensive auto insurance also carries a deductible that you’ll need to pay before your insurance company will begin processing your claim.

Should I Carry Comprehensive Insurance?

Comprehensive insurance is optional in every state. However, most lenders require full coverage (meaning liability plus comprehensive and collision) on a financed vehicle.

Even if your lender doesn’t require it, we recommend comprehensive coverage for those who can afford it. Consider the cost of having to replace your car if it’s stolen or totaled by a falling tree branch. Even the cost of replacing a window that’s been damaged by hail can be steep. If you can’t afford to cover these kinds of costs out of pocket, then comprehensive insurance is a smart and worthwhile investment.

Uninsured Motorist Coverage

A study conducted by the Insurance Research Council found that, in 2022, 14 percent of drivers in the U.S. didn’t even have liability car insurance–even though driving uninsured is illegal in most states.

If you’re involved in an accident with a driver who doesn’t have car insurance, uninsured and underinsured motorist insurance can help cover the cost of repairs as well as the cost of any medical care you might need.

There are two main types of uninsured motorist coverage: uninsured motorist bodily injury coverage and uninsured motorist property damage coverage.

Uninsured motorist bodily injury coverage (UMBI): This coverage pays costs associated with medical bills and lost wages for you and any passengers in your vehicle at the time of the accident. UMBI usually comes with two limits: per person and per accident.
Uninsured motorist property damage coverage (UMPD): UMPD pays for the cost of repairs to your vehicle or other property after an accident with an uninsured motorist.

Drivers in 20 states and Washington, D.C., are required to carry uninsured motorist (UM) coverage, while 12 states require drivers to hold underinsured motorist (UIM) insurance. The table below gives a breakdown of the UM coverage required in each of these states:

State	Required UM Bodily Injury Limits (per Person/ per Accident)	Required Property Damage Limits	Additional Requirements
Connecticut	$25,000/$50,000		Requires underinsured motorist coverage (UIM) with the same limits
District of Columbia	$25,000/$50,000	$5,000
Illinois	$25,000/$50,000
Indiana	$25,000/$50,000		Requires $50,000 UIM
Kansas	$25,000/$50,000		Requires UIM with same coverage limits
Maine	$50,000/$100,000		Requires UIM with same coverage limits
Maryland	$30,000/$60,000	$15,000	Requires UIM with same coverage limits
Massachusetts	$20,000/$40,000
Minnesota	$25,000/$50,000		Requires UIM with same coverage limits
Missouri	$25,000/$50,000
Nebraska	$25,000/$50,000		Requires UIM with same coverage limits
New Hampshire	$25,000/$50,000	$25,000	Requires UIM with same coverage limits Drivers who reject car insurance are exempt
New Jersey	$15,000/$30,000	$5,000	Requires UIM with same coverage limits
New York	$25,000/$50,000
North Carolina	$30,000/$60,000	$25,000	Requires UIM with same coverage limits
North Dakota	$25,000/$50,000		Requires UIM with same coverage limits
Oregon	$25,000/$50,000
Rhode Island	$25,000/$50,000	$25,000	Drivers can decline UM coverage, however companies are required to offer these minimums
South Carolina	$25,000/$50,000	$25,000
South Dakota	$25,000/$50,000		Requires UIM with same coverage limits
Vermont	$50,000/$100,000	$10,000	Requires UIM with same coverage limits
Virginia	$30,000/$60,000	$20,000	Requires UIM with same coverage limits
West Virginia	$25,000/$50,000	$25,000
Wisconsin	$25,000/$50,000

Should I Carry Uninsured Motorist Coverage?

If you live in one of the states listed in the table above, you’re required to carry uninsured motorist coverage to drive legally. If you don’t live in a state that mandates UM or UIM, you may want to consider it anyway, especially if you’re unable to afford costly repairs from a car accident involving an uninsured driver.

Medical Payments Coverage (MedPay)

Medical payments coverage (or MedPay for short), covers certain medical costs, health insurance deductibles, and even funeral expenses in the event of a fatal car accident. MedPay covers you and your passengers regardless of who caused the collision.

Should I Carry MedPay Coverage?

MedPay is required by law in the following three states:

Maine: $2,000 per person
New Hampshire: $1,000 per person (for those who opt to purchase car insurance)
Pennsylvania: $5,000 per person (can be replaced with PIP)

MedPay is always worth considering in states where it's available. Just note that some states offer or require MedPay while others offer or require personal injury protection (PIP). You can only purchase one or the other depending on your state.

Personal Injury Protection (PIP)

Personal injury protection coverage (PIP), sometimes referred to as “no-fault insurance,” covers certain medical bills, child care costs, lost wages, and funeral expenses after a covered accident. PIP is specifically for injuries and costs associated with car accidents, covering gaps sometimes left by health insurance.

No-fault states require this type of coverage, though Pennsylvania drivers must choose between PIP and MedPay. Delaware and Oregon are at-fault states that require PIP coverage. Below is a table of each state’s minimum PIP requirements:

State	Required PIP Coverage Limits	Additional Information
Delaware	$15,000/$30,000 per accident $5,000 for funeral costs	Delaware is an at-fault car insurance state.
Florida	$10,000 per person	Florida doesn’t require bodily injury liability insurance.
Hawaii	$10,000 per person
Kansas	$4,500 per person in medical expenses $4,500 for rehabilitation costs $900 per month for one year for disability or loss of income In-home services at $25 per day for 1 year $2,000 for funeral costs
Kentucky	$10,000 per person Lost wages up to $200 per week
Maryland	$2,500 per person	Drivers can opt out of coverage, but companies are required to offer minimum coverage.
Massachusetts	$8,000 per person $8,000 per accident
Michigan	Options of either $500,000 or $250,000 per person $50,000 per person if the insured has Medicaid coverage Drivers can opt out if they hold Medicare Parts A and B	Opting for the maximum limit gives you unlimited PIP coverage.
Minnesota	$20,000 per person in medical expenses $20,000 per person in nonmedical expenses $2,000 for funeral expenses
New Jersey	$15,000 per person. Can choose up to $250,000
New York	$50,000 per person 80 percent of lost wages, up to to $2,000 per month for 3 years $2,000 death benefit Up to $25 per day for 1 year for additional expenses
North Dakota	$30,000 per person
Oregon	$15,000 per person	Oregon is an at-fault car insurance state.
Pennsylvania	$5,000 per person	Drivers can opt for $5,000 per person in MedPay coverage instead.
Utah	$3,000 per person 85 percent of lost income, up to $250 per week for 1 year $1,500 for funeral expenses $3,000 death benefit $20 per day for 1 year for additional expenses

Should I Carry PIP Coverage?

If you live in any of the states above, you’re required to carry PIP to drive legally. If you live in a state where PIP isn’t required, it’s worth looking into. PIP is similar to MedPay but has more extensive coverage. PIP isn’t available everywhere, however, so MedPay may be your only option.

Additional Types Of Car Insurance Coverage

Aside from the six main types of auto insurance coverage, most insurers offer a handful of other optional coverages that you can add to your policy. The following are the most common optional coverages:

Gap insurance: In the event of a total loss after a car accident, gap insurance helps you pay off your loan if your car’s ACV is less than the amount owed on the loan.
Total loss protection: This provides money for a new car replacement if your vehicle is deemed a total loss after an accident where another driver is at fault.
Roadside assistance: This coverage provides assistance for breakdowns and often includes towing, flat tire assistance, and jump-starts.
Rental car reimbursement: This helps cover the cost of a rental car if yours is in the repair shop after an accident.

Types Of Car Insurance: Our Take

While the types of car insurance you’re required to carry will vary depending on your state, we recommend reviewing each type before purchasing a policy. It’s important to understand your coverage options to ensure that you have adequate protection for you, your passenger, your vehicle–and most importantly–your finances.

Once you understand your coverage needs, you can shop around and compare rates. Below are a few highly reputable companies that we think are worth a look when shopping for car insurance.

Recommendations For Car Insurance

When shopping for car coverage, the best way to find the cheapest car insurance is to compare car insurance quotes from several providers. Our team looked at the top insurance providers and determined that Geico and State Farm are among the best.

Geico: Best For Basic Coverage

Geico is the second-largest insurer in the U.S., and for good reason. In addition to having some of the lowest rates on the market, Geico offers high policy limits and many discount opportunities. The company’s A++ financial strength rating from AM Best signifies its ability to pay out claims, and it holds an A+ rating from the Better Business Bureau.

Geico offers the six main types of car insurance as well as the following add-ons:

Roadside assistance
Rental reimbursement
Mechanical breakdown insurance
Accident forgiveness
Rideshare coverage

State Farm: Best Overall Provider

State Farm has become the largest auto insurer thanks to its reliability and below-average car insurance rates. A big draw for the provider is its usage-based insurance program, Drive Safe & Save^™, which offers discounts for less frequent driving and safe driving habits.

In addition to the six main types of insurance coverage, State Farm offers:

Roadside assistance
Rideshare driver coverage
Rental car coverage
Travel expense coverage

Types Of Car Insurance: FAQ

Below are commonly asked questions about different types of car insurance:

What are the six main types of car insurance?

The six most common types of car insurance are liability, collision, comprehensive, uninsured motorist, medical payments, and personal injury protection.

What is full-coverage insurance?

Full coverage refers to an insurance policy with at least liability, collision, and comprehensive coverages. A full-coverage policy may also include uninsured motorist coverage and either personal injury protection or medical payments coverage.

What is comprehensive car insurance?

This type of insurance covers damage to your car from theft, vandalism, falling objects, rodents, and natural disasters (such as floods and fire).

Is comprehensive insurance full coverage?

Comprehensive insurance is not full coverage by itself. It must be combined with liability insurance and collision insurance for the policy to be considered full coverage.

How We Rate Auto Insurers

Our review team extensively researches auto insurance providers to deliver informed and unbiased assessments of leading companies. We evaluate several key rating factors that are important to consumers to determine which providers are the best in the industry:

Reliability: It’s important that an auto insurer is able to meet its claims obligations. Companies with a strong financial strength rating from AM Best score best in this category. Established insurers with a long history of reliable service also receive positive marks.
Availability: Insurance companies that offer wider availability to consumers in terms of state availability and few eligibility requirements are more likely to meet consumer needs.
Coverage: To determine our coverage score, we look at the number of coverage options available as well as coverage limits and deductible options. Our ratings also take into account additional services and benefits like roadside assistance.
Pricing: Cost can be difficult to compare between insurers because so many factors impact annual premiums. The cheapest insurer for one driver may not be the cheapest for another. To determine our cost score, we look at insurance rate estimates generated by Quadrant Information Services, discount opportunities, and consumer reports.
Service: We comb through customer reviews on sites like the Better Business Bureau (BBB) to learn about customer experiences. Insurers with a low volume of complaints score well in this area. We also consider the claims process, giving higher ratings to car insurance providers that offer a smooth experience.
Technology: Providers with an online quote tool, easy-to-use claims app and a usage-based insurance app score best in this category.

*Data accurate at time of publication.

Dash Lewis Content Writer