The six most common types of car insurance are auto liability coverage, uninsured and underinsured motorist coverage, comprehensive coverage, collision coverage, medical payments, and personal injury protection. Some of these coverages may be mandatory in your state while some are only optional. Even if a type of coverage is not required by your state, it may still be available to purchase from your insurer.
The Six Types of Car Insurance
- Liability: Pays for other people’s expenses after an accident. Required in nearly every state.
- Collision: Pays to repair or replace the policyholder’s car after any accident, regardless of fault. Only required for leased or financed cars.
- Comprehensive: Covers damage to the policyholder’s vehicle caused by something other than an accident. Only required for leased or financed cars.
- Personal Injury Protection: Pays for the policyholder’s direct and indirect medical expenses after an accident. Required in 12 states.
- Uninsured/Underinsured Motorist: Covers vehicle damage and medical expenses after an accident with an uninsured/underinsured driver. Required in 20 states.
- Medical Payments: Pays for the policyholder’s direct medical expenses after an accident. Required in two states.
Liability Car Insurance
What It Covers: Other people's medical bills and property damage after accidents that you cause. It does not cover any expenses for you or your passengers (other than legal fees if you are sued for an accident).
Who Should Get It: Drivers in almost every state are required to have liability insurance in order to drive legally. New Hampshire and Virginia are the only two states that do not require liability car insurance (though you will need to meet other requirements).
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Collision Car Insurance
What It Covers: Damage to your own vehicle if you’re involved in an accident with another car, you hit a stationary object, or you get into a single-car accident, regardless of fault.
Who Should Get It: Drivers with a car loan or a lease will be required to carry collision insurance. You should also get it if you can’t afford to repair or replace your car if it’s unexpectedly damaged.
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Comprehensive Car Insurance
What It Covers: Damage to your own vehicle that’s caused by something other than a collision, like vandalism or a natural disaster.
Who Should Get It: Drivers with a car loan or a lease will be required to carry comprehensive insurance. You should also get it if you can’t afford to repair or replace your car if it’s unexpectedly damaged.
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Personal Injury Protection (PIP)
What It Covers: Medical expenses for you and your passengers after an accident. Qualifying expenses can include traditional medical bills as well as costs not typically covered by health insurance such as lost income, child care or even a funeral.
Who Should Get It: Drivers in any of the 12 states where PIP is required.Even if it’s not required, you should purchase PIP if it’s available in your state and you can afford it, since it can protect you against hefty medical bills.
States Required:DE, FL, HI, MI, MA, KS, MN, NY, UT, OR, ND, and NJ
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Uninsured/Underinsured Motorist Coverage
What It Covers: Medical bills and vehicle repairs if you’re in an accident caused by an uninsured motorist or a driver who doesn’t have enough liability insurance to cover your expenses.
Who Should Get It: Drivers in the 20 states that require uninsured motorist coverage. You should also consider purchasing it if you don’t have overlapping types of coverage, like collision insurance or PIP.
States Required:CT, IL, KS, MA, MD, ME, MN, MO, NC, ND, NE, NH, NY, OR, SC, SD, VA, VT, WI, WV, and D.C.
Medical Payments (MedPay) Coverage
What It Covers: Accident-related medical expenses for you, your passengers, your household members and other policyholders. It can also cover the copays and deductibles of other insurance policies, including health insurance and PIP. This coverage type is similar to PIP but is more limited in scope.
Who Should Get It: Drivers in Maine and New Hampshire, where it’s required. If MedPay is optional in your state, you should still purchase it to supplement existing health insurance and PIP coverage.
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Other Types of Car Insurance Coverage
- Gap Insurance:Your vehicle depreciates over time, including the moment you drive it off the lot. In a catastrophic loss, your auto insurer will only pay your car’s actual cash value, which could be less than what you owe on a loan or lease. Gap insurance will pay for the dollar-amount “gap” between the balance of your financing and what your car is worth.
- Umbrella Insurance: Umbrella insurance isn’t car insurance in the strictest sense. It’s an extra level of broad-based liability protection beyond homeowner and auto policies, and it protects assets of $1 million or more in case of a lawsuit.
- Rental Reimbursem*nt: While your car is being repaired under a claim, rental reimbursem*nt will keep you on the road by covering the cost of a rental car. There are limits on how much the insurer will pay per day and per claim, but it’s usually enough to cover a rental for the full amount of time your car is in the shop.
- Emergency Roadside Assistance: This coverage option will provide assistance if you lock yourself out of your car, need a tow or jump start, get a flat tire or run out of gas. If your car is inoperable, you can get a tow to a nearby garage of your choice, up to a specified distance.
- Mechanical Breakdown Insurance: Mechanical breakdown insurance can cover the costs of repairs to mechanical parts and systems. This coverage is similar to extended warranties and service contracts, but unlike those products, you pay a monthly premium instead of paying a lump sum up front.
- Usage-Based Insurance (UBI): This is not a different type of insurance coverage; it’s just a new way to pay for insurance like liability, collision and comprehensive coverage. By permitting the insurer to track your mileage and driving habits, you become eligible for discounts.
- Non-Owner Car Insurance: This is a type of liability insurance for people who do not own their own car. People without a car may need to purchase this insurance to get a suspended driver’s license reinstated.
- SR-22 Insurance: An SR-22 is not a specific type of insurance, but rather a form that insurance companies file with the state to confirm that high-risk drivers are carrying the minimum required insurance. Coverage with an SR-22 is often confused for a specific type of car insurance, however.
For your convenience, we'll recap the major types of car insurance below.
Types of Car Insurance
- Liability Car Insurance
- Collision Car Insurance
- Comprehensive Car Insurance
- Personal Injury Protection (PIP)
- Uninsured/Underinsured Motorist Coverage
- Medical Payments (MedPay) Coverage
- Gap Insurance
- Umbrella Insurance
- Rental Reimbursem*nt
- Emergency Roadside Assistance
- Mechanical Breakdown Insurance
- Usage-Based Insurance (UBI)
- Non-Owner Car Insurance
- SR-22 Insurance
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