In this guide
Most car insurance policies are built from six main coverage types: bodily injury liability, property damage liability, collision, comprehensive, uninsured/underinsured motorist, and medical payments or personal injury protection (PIP). Liability pays for harm you cause to others. Collision and comprehensive pay for damage to your own car. The rest help pay for injuries to you and your passengers. Here's what each one does, which ones are usually required, and what add-ons are available.
Key takeaways
- Liability coverage (bodily injury and property damage) pays for harm you cause to others. Nearly every state requires it.
- Collision covers crash damage to your car, and comprehensive covers theft and non-crash damage like hail or hitting a deer.
- Uninsured/underinsured motorist coverage protects you when the at-fault driver has no insurance or not enough.
- PIP and medical payments coverage help pay medical costs for you and your passengers. PIP is required in no-fault states.
- Which coverages are required, and at what limits, depends on your state and on any car loan or lease.
Coverage types at a glance
This table summarizes the main coverages. Requirements vary by state, so treat the "usually required?" column as a general guide.
| Coverage | What it pays for | Usually required? |
|---|---|---|
| Bodily injury liability | Injuries you cause to other people | Yes, in nearly every state |
| Property damage liability | Damage you cause to other people's property | Yes, in nearly every state |
| Collision | Damage to your car from a crash or rollover | Not by state law; often by lenders |
| Comprehensive | Theft and non-crash damage to your car | Not by state law; often by lenders |
| Uninsured/underinsured motorist | Your losses when the at-fault driver lacks enough insurance | In some states |
| Personal injury protection (PIP) | Medical costs and, often, lost wages for you and passengers | In no-fault states and some others |
| Medical payments (MedPay) | Medical costs for you and passengers | Usually optional |
Liability coverage
Liability coverage is the core of almost every policy. It pays for damage and injuries you cause to other people when you're at fault. It doesn't pay for your own injuries or your own car.
The Insurance Information Institute (Triple-I) says virtually all states require drivers to carry liability insurance. New Hampshire is the main exception, though drivers there must still be able to pay for an accident they cause.
Bodily injury liability
This pays for injuries you cause to others, such as their medical bills and lost income. It can also help pay for your legal defense if you're sued. According to Triple-I, it also applies when you or listed family members drive someone else's car with permission.
Property damage liability
This pays for damage you cause to someone else's property. That usually means another car, but it can also include things like a fence, a utility pole, or a building.
How liability limits are written
Liability limits are often shown as three numbers, such as 30/60/25. The Texas Department of Insurance explains that its state minimum of 30/60/25 means $30,000 for one person's injuries, $60,000 for all injuries in one accident, and $25,000 for property damage. Each state sets its own minimums.
State minimums are a floor, not a recommendation. Triple-I suggests buying more than the minimum to help protect your assets, because you could be personally responsible for costs above your limits. See our guide to minimum car insurance requirements by state for more.
Collision coverage
Collision pays to repair or replace your own car after it hits another vehicle or an object, or rolls over. Triple-I notes it also covers damage from potholes. It generally applies whether or not you caused the crash.
Collision comes with a deductible, which is the amount you pay before the insurer pays the rest. If another driver caused the accident, your insurer may pay you and then try to recover the money from the other driver's insurer.
State law doesn't require collision coverage. But if you have a car loan, the NAIC notes that your lender will require both collision and comprehensive. Lease agreements usually do too.
Comprehensive coverage
Comprehensive covers damage to your car that doesn't come from a crash with another vehicle or object. Some policies call it "other than collision." According to the NAIC and Triple-I, it typically covers:
- Theft
- Fire
- Hail, wind, and flooding
- Falling objects, like tree branches
- Vandalism
- Hitting an animal, such as a deer
- Windshield and glass damage
Comprehensive usually has its own deductible, separate from collision. Triple-I notes that some insurers waive the deductible for glass repairs.
Good to know: Collision and comprehensive usually pay up to the car's actual cash value, which is its value just before the loss after depreciation. That can be less than what you paid or what you still owe.
Uninsured and underinsured motorist coverage
Not every driver on the road has insurance. Triple-I, citing Insurance Research Council estimates, says about one in seven drivers was uninsured in 2022. This coverage protects you in those situations.
- Uninsured motorist (UM) pays when you're hit by a driver with no insurance, or by a hit-and-run driver.
- Underinsured motorist (UIM) pays when the at-fault driver's insurance isn't enough to cover your losses.
Triple-I says this coverage can also protect you and covered family members if you're hit as a pedestrian. Depending on the state, UM/UIM may cover injuries, property damage, or both.
Some states require UM or UIM coverage. In others, insurers must offer it and you may decline it in writing. The Texas Department of Insurance, for example, says insurers there must offer it but you can turn it down in writing.
PIP and medical payments coverage
These two coverages help pay medical costs for you and your passengers after an accident, regardless of who caused it.
Personal injury protection (PIP)
PIP pays medical expenses and, depending on your state, can also cover lost wages, the cost of replacing services you can't perform (like child care), and funeral costs. It's the backbone of no-fault insurance.
According to Triple-I, 12 states and Puerto Rico have no-fault laws that require PIP: Florida, Hawaii, Kansas, Kentucky, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Pennsylvania, and Utah. Some other states require or offer PIP without restricting lawsuits. Benefit levels and options vary widely by state.
Medical payments (MedPay)
MedPay is a simpler, usually optional coverage. It helps pay medical and sometimes funeral costs for you and your passengers, up to a set limit, no matter who was at fault. It's typically narrower than PIP and usually doesn't cover lost wages.
To learn how these pieces fit together in a claim, read how car insurance works.
Common optional add-ons
Beyond the six main coverages, many insurers offer extras. Availability and names vary by company and state.
- Gap insurance – If your car is totaled and you owe more on the loan or lease than it's worth, gap coverage can pay the difference. The NAIC notes that dealers and lenders may also offer it.
- Rental reimbursement – Helps pay for a rental car while your car is being repaired after a covered claim.
- Roadside assistance or towing – Helps with towing, flat tires, jump-starts, or lockouts.
- New car replacement or better car replacement – Offered by some insurers. It may pay toward a newer car instead of only the actual cash value after a total loss, subject to conditions.
- Rideshare coverage – Some insurers offer this to fill gaps when you drive for a rideshare or delivery app. A personal policy may not cover you while you're working.
Watch out: The NAIC notes that a standard auto policy won't cover motorcycles, ATVs, RVs, or commercial vehicles. Those need their own policies. If you use a vehicle for business, see our guide to commercial auto insurance.
How to choose your coverages
There's no single right mix. A few questions can help you think it through:
- What does your state require? Start with your state's minimum liability limits and any required PIP or uninsured motorist coverage.
- What could you lose in a lawsuit? If you have savings, a home, or future income to protect, higher liability limits may make sense.
- Could you replace your car without insurance? If not, collision and comprehensive may be worth it. If the car is older and worth little, they may cost more than they're likely to pay out.
- Do you have a loan or lease? If so, you'll usually need collision and comprehensive, and possibly gap coverage.
- How good is your health coverage? This may affect how much PIP or MedPay you want, where you have a choice.
Once you know what you need, compare quotes from several insurers using the same coverages and limits so the prices are truly comparable. For guidance on the most common decision, see full coverage vs. liability-only car insurance. A licensed agent or your state insurance department can also help answer questions.
Frequently asked questions
What car insurance coverage is required by law?
Nearly every state requires liability coverage. Some also require uninsured/underinsured motorist coverage or PIP. Collision and comprehensive aren't required by state law, but lenders and leasing companies usually require them.
What's the difference between collision and comprehensive?
Collision covers damage from hitting a vehicle or object, or rolling over. Comprehensive covers most other damage, such as theft, fire, weather, vandalism, and hitting an animal.
Is "full coverage" a type of insurance?
Not exactly. It's an informal term that usually means liability plus collision and comprehensive, along with whatever else your state requires. It doesn't mean every possible loss is covered.
Do I need uninsured motorist coverage if it isn't required?
That's your decision. It can protect you if you're hit by a driver who has no insurance or too little, which liability coverage won't do. Many people consider it, especially if they have limited health or disability coverage.
Does car insurance cover my belongings inside the car?
Generally not. Personal items stolen from a car are usually handled under a homeowners or renters policy, subject to its deductible. Check your policies to confirm.
Sources
- Insurance Information Institute – What is covered by a basic auto insurance policy?
- Insurance Information Institute – Background on: Compulsory auto/uninsured motorists
- Insurance Information Institute – Background on: No-fault auto insurance
- NAIC – What Does Auto Insurance Cover?
- Texas Department of Insurance – Auto insurance guide
- NAIC – Commercial Ride-Sharing
General information only. This guide explains general concepts and is not insurance, legal or financial advice. Rules and prices vary by state and insurer. Check your policy documents and speak to a licensed insurance professional or your state insurance department about your situation.