10 types of car insurance

The most common types of car insurance coverages are liability, comprehensive and collision, uninsured and underinsured motorists, personal injury protection, and medical payments — but there are other types, too.

Rachael Brennan headshotAndrew Hurst

By

Rachael Brennan

Rachael Brennan

Senior Editor & Licensed Auto Insurance Expert

Rachael Brennan is a senior editor and a licensed auto insurance expert at Policygenius. Her work has also been featured in MoneyGeek, Clearsurance, Adweek, Boston Globe, The Ladders, and AutoInsurance.com.

&Andrew Hurst

Andrew Hurst

Senior Editor & Licensed Auto Insurance Expert

Andrew Hurst is a senior editor and a licensed auto insurance expert at Policygenius. His work has also been featured in The New York Times, The Wall Street Journal, Forbes, USA Today, NPR, Mic, Insurance Business Magazine, ValuePenguin, and Property Casualty 360.

Updated|6 min read

Policygenius content follows strict guidelines for editorial accuracy and integrity. Learn about our editorial standards and how we make money.

There are six basic types of car insurance that make up a standard policy, as well as some additional coverage options that many drivers choose to addYou’re not required to have every type of auto insurance, but that doesn’t mean they’re not still useful.

  1. Liability coverage

  2. Collision coverage

  3. Comprehensive coverage

  4. Uninsured and underinsured motorists coverage

  5. Personal injury protection

  6. Medical payments coverage

  7. Rental car reimbursement

  8. Roadside assistance

  9. Gap insurance

  10. New car replacement

Compare rates and shop affordable car insurance today

We don't sell your information to third parties.

1. Liability coverage

Liability coverage is the most important part of your car insurance policy, and it’s required in almost every state. There are two types of liability insurance and they each cover slightly different things: 

  • Bodily injury liability coverage (BIL): Covers injuries to other drivers after an accident you’re responsible for, along with related expenses like lost wages.

  • Property damage liability coverage (PDL): Covers damage that you cause in a car accident, usually to other cars but also to things like buildings or fences.

When you’re in an accident and you’re found to be at fault for the crash, your car insurance will cover the cost of the other driver’s injuries and damaged property up to your policy’s limits.

Remember that both kinds of liability insurance cover other people, not you or your car.The driver whose car you hit can file a liability claim with your car insurance.

Who needs liability insurance?

Most drivers should get higher amounts of bodily injury and property damage liability coverage than what their state requires. Car crashes are responsible for billions of dollars in damages per year. Without enough liability insurance, you could be stuck paying tens of thousands by yourself after a crash.

2. Collision coverage

Collision coverage pays for damage to your own car after an accident, even if you were at fault for the crash. Along with comprehensive coverage, it’s part of what makes up what’s called a full-coverage policy.

Collision coverage requires a deductible, which is the amount of money you’ll pay out of pocket if you have to make a claim. Usually, collision deductibles are set at $500, $1,000, or more.

Who needs collision coverage?

Collision coverage isn’t required by any state, but you’ll have to get ite if you lease your car or financed it with a loan. Even though it’s optional, you should consider getting collision coverage. Otherwise, you’d be stuck paying for repairing or replacing your car yourself after an at fault accident.

3. Comprehensive coverage

Comprehensive coverage (along with collision coverage) is the other part of auto insurance that makes up a full-coverage policy. Comprehensive coverage covers damage that’s not caused by a collision, including:

  • Falling tree branches and debris

  • Windstorms, including tornadoes and hurricanes

  • Rain and flooding

  • Hitting an animal, like a deer

  • Animal infestations

  • Vandalism

  • Theft

→ Read about how comprehensive compares with collision coverage

Who needs comprehensive insurance?

Like collision insurance, comprehensive insurance is usually required by your car’s lienholder or lessor (and also requires a deductible). It’s an especially useful type of insurance if you usually park your car in an uncovered driveway or out on the street, where it may be damaged while it’s not being driven. 

4. Uninsured and underinsured motorist coverage

Uninsured and underinsured motorist coverage (sometimes called UM/UIM coverage) are two different types of insurance that are often referred to together. They cover damage to your own car that’s caused by another driver who either doesn’t have car insurance or doesn’t have enough car insurance.

  • Uninsured motorist coverage: Covers the cost of an accident caused by a driver who doesn’t have any car insurance.

  • Underinsured motorist coverage: Covers the cost of an accident caused by a driver with some car insurance, but not enough to fully pay for the damage they caused.

Who needs uninsured and underinsured motorist coverage?

Drivers in 23 states have to have at least some amount uninsured and underinsured motorist coverage. But it’s a good idea to consider getting UM/UIM even if your state doesn’t require it. Both UM and UIM coverage are relatively cheap, and having them can help you avoid paying for damage you didn’t cause.

5. Personal injury protection

Personal injury protection, or PIP, is a type of car insurance that covers your injuries, lost wages, pain and suffering, and even funeral expenses after a car accident, regardless of fault.

PIP, also called no-fault insurance, is required in no-fault states, where drivers have to get coverage for their injuries after a crash from their own car insurance, even if another driver was at fault.

Who needs personal injury protection?

There are 12 no-fault insurance states where PIP is required. If you have sufficient health insurance, you may not need more than the amount required by your state.

The no-fault states that require PIP are:

  • Florida

  • Hawaii

  • Kansas

  • Kentucky

  • Massachusetts

  • Michigan

  • Minnesota

  • New Jersey

  • New York

  • North Dakota

  • Pennsylvania

  • Utah

6. Medical payments coverage

Medical payments coverage is another car insurance coverage that covers your own injuries, but unlike PIP, it’s almost always optional and it’s typically capped at a much lower limit. Unlike a health insurance policy, there are no deductibles for medical payments coverage. In addition to your injuries, medical payments insurance can cover:

  • Hospital stays

  • Trips to the doctor’s office

  • Medical care from nurses

  • Surgery, X-rays, and other procedures

  • Ambulance and EMT charges

  • Deductibles and copays for health insurance

  • Funeral expenses

Who needs medical payments coverage?

MedPay is only required in a couple of states.But it’s smart to add medical payments coverage if you don’t have health insurance or you’re worried your health insurance won’t cover your injuries. after an accident.

Compare rates and shop affordable car insurance today

We don't sell your information to third parties.

7. Rental car reimbursement coverage

Rental car reimbursement pays for the cost of a rental car (up to your limit) after an accident lands your regular vehicle in the repair shop. 

Rental car reimbursement has both a daily and total limit, so it may cover something like $75 per day, up to $1,000 total. When you get car insurance, you’ll be able to adjust the limits of your rental car reimbursement coverage (just like other types of insurance).

Who needs rental car reimbursement insurance?

Rental reimbursement coverage is always optional but it’s usually one of the more affordable car insurance add-ons. Adding rental reimbursement coverage to your policy means you can avoid the headache of paying for a rental car yourself after an accident.

8. Roadside assistance coverage

Roadside assistance coverage, sometimes called towing and labor coverage or sold as part of a trip interruption package, covers the cost of emergency services, like:

  • Tire changes

  • Towing

  • Jumpstarts

  • Lockout service

  • Transportation away from a stranded car

Roadside assistance coverage is usually cheap. It may cost around $15 per vehicle, depending on the company.

Who needs roadside assistance insurance?

Roadside assistance coverage is a useful (and affordable) add-on, but it’s possible that you’re already covered for emergency roadside services by another company, such as AAA, or through your credit card. If you are, there’s no need to add roadside assistance coverage through your insurance company.

9. Gap insurance coverage

If your car is totaled, your car insurance will reimburse you for its actual cash value, which is its value after depreciation, but that’s not always enough to pay for the remainder of your loan or lease. 

Gap insurance can pay for the difference between what your car is worth (after depreciation) and what you still owe on the lease or loan, so you don’t have to pay it off yourself after an accident.

Who needs gap insurance?

Like with comp and collision coverage, your lessor or lienholder may require you to have gap insurance. If you lease or finance a car and you’re not required to get gap insurance, you should still consider adding it anyway, so you’re not stuck making payments on a totaled car.

10. New car replacement coverage

The payment you get after your car is totaled may not be enough to pay for a replacement that’s the same make and model. 

That’s where new car replacement comes in. With this coverage, you’re guaranteed to be paid enough for your totaled car to go out and buy a new one of the same kind. Some companies even offer better car replacement coverage, which pays for a car one model year newer than your old one.

Who needs new car replacement insurance?

New car replacement insurance is an optional type of car insurance coverage, but not everyone can add it to their policies. Only some companies offer this coverage — and those that do usually require that your car is only two to three years old or newer and you’re its first owner.

How to choose the types of car insurance you need

Although you probably have to have a minimum amount of car insurance, your state’s minimums only the barest amount of coverage after an accident.

That said, not all drivers need to have every type of auto insurance.

Instead of only buying the lowest possible amounts of insurance or adding every single endorsement that you can, you should use your state’s minimum requirements as a starting point before getting as much liability insurance as you can afford. Get extra types of insurance, but only if they make sense for you.

As you shop, you should always have an idea of whether you’re paying too much for coverage. To avoid higher premiums while still getting complete coverage, compare rates from the top insurance companies that offer the types of coverage you need.

→ Read about how to choose car insurance coverage

Compare rates and shop affordable car insurance today

We don't sell your information to third parties.

Frequently Asked Questions

Which type of car insurance is best?

There’s not one type of car insurance that’s best for every driver. Besides the required types of insurance — like liability coverage — certain car insurance options are better suited to different types of vehicles. For example, if you don’t lease your car, you wouldn’t need gap insurance, but it may be required for drivers who lease or finance.

What type of insurance coverage is most important?

Since nearly every state requires both bodily injury and property damage liability insurance, you could say that it’s the most important coverage to have. Also, liability insurance is important because it can keep you from having to pay tens of thousands of dollars in medical bills and property damage.

What types of car insurance are included in a full-coverage policy?

A full-coverage auto insurance policy includes the types of insurance that are required, like liability coverage, along with comprehensive and collision coverage to pay for any damage to your vehicle.

Authors

Senior Editor & Licensed Auto Insurance Expert

Rachael Brennan

Senior Editor & Licensed Auto Insurance Expert

gray linkedin icon link

Rachael Brennan is a senior editor and a licensed auto insurance expert at Policygenius. Her work has also been featured in MoneyGeek, Clearsurance, Adweek, Boston Globe, The Ladders, and AutoInsurance.com.

Senior Editor & Licensed Auto Insurance Expert

Andrew Hurst

Senior Editor & Licensed Auto Insurance Expert

gray linkedin icon link

Andrew Hurst is a senior editor and a licensed auto insurance expert at Policygenius. His work has also been featured in The New York Times, The Wall Street Journal, Forbes, USA Today, NPR, Mic, Insurance Business Magazine, ValuePenguin, and Property Casualty 360.

Questions about this page? Email us at .