Types Of Car Insurance Coverage

How does your coverage impact your car insurance?

What are the different types of car insurance coverage?

Car insurance coverage can be divided into two primary categories: liability and physical protection. Liability coverage protects other drivers and their property from damage you cause. Physical coverage, i.e., collision and comprehensive, protect the physical integrity of your vehicle. 

 

Liability insurance

Depending on your state, your liability requirements will change. Generally, you’re required to carry bodily injury and property damage liability coverage.

 

30 /

60 / 

25

$30,000 in bodily injury coverage per person

$60,000 in bodily injury coverage per incident

$25,000 in property damage per incident

 

If you live in a no-fault insurance state, you’re also required to carry personal injury protection (PIP). A no-fault state means every driver is required to cover their own bodily injury damages after an accident — regardless of fault. PIP covers personal bodily injury and medical costs after an accident.

For more information on insurance coverages, see our related articles below:

 

Physical coverage

Your physical coverage — collision and comprehensive — is designed to protect your vehicle from damage.

 

Collision coverage

Your collision coverage protects your vehicle if you collide with another object or vehicle. Collision coverage comes with a deductible — what you pay prior to your insurance company compensating you. Your deductible may vary depending on your and your insurance company’s preferences.

 

Comprehensive coverage

Your comprehensive coverage works to protect your vehicle from circumstances other than a collision. Damage caused by weather, animals, theft, and vandalism is covered by comprehensive insurance. Like your collision protection, your comprehensive coverage also features a deductible.

For more information on physical coverage, see our additional articles below.

 

Additional coverages

Liability, collision, and comprehensive are the most popular insurance coverages. They’re required by most states for drivers leasing or financing their vehicles. Other coverages exist, as well.

Below are some additional resources explaining common car insurance coverage options.

Want to know what isn't covered by insurance? Check out our guide to common car insurance exclusions.

Unforeseen circumstances may or may not be covered by insurance. Below are explanations of what to expect in some of these situations:

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Recent Questions:

Types of Car Insurance Coverage

Can I insure the engine of a vehicle for added protection?

Auto insurance policies are meant to protect your vehicle if it is damaged as the result of a covered loss. Unfortunately, breakdowns, wear and tear, and warranty issues are not covered on a traditional auto policy.

If I'm involved in an accident driving my grandmother's car, will the damage be covered?

Luckily, most insurance policies allow for permissive use drivers, so the damage you caused should be covered under your grandmother's policy as long as you aren't a full-time driver. Unfortunately, your grandmother's insurance rate is likely to increase after the claim since it will be considered an At Fault accident.

Will my insurance policy cover mechanical breakdown?

Your insurance policy isn't a warranty so it's not likely to cover normal wear and tear or breakdowns. You can always cancel the policy if you don't plan to get another vehicle for a while, but you will lose your prior insurance discount so I wouldn't recommend it if you will be getting a new vehicle in the near future.

What should I do with my car insurance after I pay off my car loan?

Congratulations! Paying off your car is a huge accomplishment.  1. Yes, let your car insurance company know: It is a good idea to notify your car insurance company of the loan payoff so that you can remove the lienholder from your policy.

Ross Martin LinkedIn

As a licensed insurance agent, Ross is responsible for researching and writing about all matters related to insurance. He has a background in writing and education, as well as a master's degree from Royal Holloway, University of London. He has been quoted by CNET, iDriveSafely.com and Kin Insurance.