Types of Car Insurance

The world of car insurance is complex. Because everyone’s financial situation is unique there is no “one size fits all” approach and there isn’t even something that fits the description of the “best car insurance.” 

The only way to be sure you have a good policy is to learn about how car insurance works, why you need some coverage types, and then shop around to get the best price for your needs.

This page is an overview of all of the different types of car insurance (for personal use) which you may encounter on your journey. Do a deep dive on any of these topics in our extended guides to get information about requirements, recommendations, cost, and more.

Liability coverage

Liability coverage is the portion of your car insurance that is generally required by each state. This coverage protects other people and their property when you cause damage with your car. There is a lot to consider about liability coverage, including how much you really need.

Minimum car insurance requirements

Each state sets their own minimum requirements for liability coverage limits for car insurance. The specifics vary depending on whether you live in an “at fault” state vs a “no fault” state and the requirements vary substantially from state to state.

Some states seem to have a better grasp on what car accidents actually cost but other states will let you be underinsured. Explore your own state’s requirements and weigh whether or not you think it’s enough for you.

If you have significant assets to protect, we don’t think the state minimums are enough. Find out how much liability coverage you should have.

Uninsured & Underinsured Motorist coverage (UI/UIM)

As its name suggests, this insurance pays for damages to you, your passengers, and your car when you are in an accident caused by someone who is uninsured or underinsured. Underinsured means they carry the minimum amount of coverage required by law, but the damages they cause cost more to fix than that minimum amount of coverage.

This is required in some states and entirely unavailable in others. Learn more about whether you need (or want) UI/UIM coverage.

Medical Payments coverage (MedPay)

MedPay is a car insurance coverage type that, as its name implies, covers medical bills and medical-related expenses like health insurance deductibles and copays, trips to doctors and hospitals, diagnostics like x-rays, surgery, ambulance and emergency medical assistance, rehabilitation, nursing care, and some medical equipment like prostheses (according to Investopedia). 

In addition to covering you when you’re driving a car, it also covers the policyholder as a pedestrian. Learn more about whether you should have MedPay.

Personal Injury Protection (PIP)

PIP is similar to MedPay in that it covers medical expenses in an accident, but it also covers related costs like lost wages and funeral costs. The coverage extends to the policyholder, their passengers, and family members living in the household.

PIP is required in 15 states. See if you want or need PIP coverage, even if it’s not required.

Collision coverage

Collision coverage is what pays to repair or replace your car in the case of a crash you cause, either with another vehicle or a stationary object, or in a crash caused by an uninsured/underinsured motorist if you don’t have UI/UIM coverage. Collision coverage is often part of what people refer to as full coverage car insurance.

Comprehensive coverage

Comprehensive is the coverage that pays the cost of all of the other things that can happen to your car — theft, vandalism, flood damage, or a tree falling on it during high winds. This does not cover mechanical problems or maintenance. Comprehensive coverage is often part of what people refer to as full coverage car insurance.

Additional coverages

It may come as a surprise to many car owners that their after-market upgrades aren’t included in their regular insurance policy, but car rental coverage is. Learn more about additional car insurance options which may apply to your situation.

Full coverage

Full coverage doesn’t really exist — no insurance policy covers you fully against all possible claims — but what is usually meant by this is that your policy includes both comprehensive and collision coverage, and usually includes liability coverage limits that are higher than required minimum limits. Full coverage isn’t something everyone should aspire to, but the right coverage is.

Need help shopping for car insurance?

Coverage Cat shops for your insurance for you. We search across dozens of major insurers, and use data science to compare millions of real quotes, to find the best combination of policies, coverage, and price for your personal financial situation.

Our promise:

  • We will never share your personal information with anyone other than the insurance companies we get quotes from
  • You will not receive any phone calls from us or any other insurance companies
  • We will only send you a few emails while we find the perfect insurance for you

We can only optimize car insurance for people in: California, Florida, New York, Texas, and Washington state. More states are coming soon.

Copyright © 2024 Coverage Cat. All rights reserved.

Built with ♥ in 🗽

Coverage Cat, Inc. is a licensed insurance broker (or producer). In California Coverage Cat does business under the name Coverage Cat Insurance Services. Coverage Cat’s license numbers are listed here. Coverage Cat places insurance with a number of insurance companies, each of which is not an affiliate of Coverage Cat.