What are the Different Types of Car Insurance?

Can you name the nine different kinds of car insurance?

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How to choose between different types of car insurance coverage

Not every type of car insurance operates in the same way. Depending on the value of your vehicle, whether you own it outright, and where you livee, your car insurance needs will change.

Let’s explore the different types of car insurance to see which one might fit your situation. 

  1. Liability insurance
  2. Collision coverage
  3. Comprehensive coverage
  4. Uninsured/underinsured motorist coverage
  5. Medical payments
  6. Personal injury protection coverage
  7. Gap insurance
  8. Rental reimbursement coverage
  9. Roadside assistance


Liability insurance

The most basic type of car insurance, liability coverage consists of property damage and bodily injury liability coverages. In every US state — except New Hampshire — liability insurance is mandatory. Failure to maintain at least liability insurance may result in a ticket and license suspension, vehicle repossession, and registration suspension. 

Liability insurance covers the damage you cause to other drivers and their property after a car accident. Each state has a mandatory limit for bodily injury and property damage you must meet or exceed. Texas, for example, has a mandatory limit of 30K/60K/25K for liability insurance coverage:

 

30K /60K / 25K
$30,000 in bodily injury coverage per person
$60,000 in bodily injury coverage per incident
$25,000 in property damage per incident


For more information on liability insurance, see The Zebra's comprehensive guide:

 

Collision coverage

Collision insurance protects your vehicle if it is damaged in a collision with a fixed object. Unlike liability coverage, collision insurance is subject to a deductible — what you pay prior to receiving reimbursement via your insurance provider.

Below are some scenarios in which you would use collision coverage:

  • You hit another car and are determined to be at-fault
  • You hit a tree or guardrail
  • You lose control of your vehicle and drive off the road, damaging your vehicle

While not required by law, you are usually required to have collision coverage if you’re leasing or financing a vehicle. Because another entity has a financial investment in your car, they want to ensure it is adequately protected. Even if you own your vehicle, if it is worth more than $4,000, you should add collision (and comprehensive) to your car insurance policy to protect your assets.

For more information on collision coverage, check out these resources:

 

Comprehensive insurance coverage

Comprehensive car insurance works with collision coverage to protect the physical integrity of your vehicle. It protects everything not covered by collision. Below are some examples in which your comprehensive would apply:

  • Your vehicle is flooded after a storm 
  • Your vehicle is stolen and needs to be replaced
  • You hit a deer 

To summarize, your comprehensive insurance covers damage caused by theft, vandalism, and weather and animal-related events. It is also subject to a deductible. 

Additional articles:


Uninsured motorist insurance

Depending on your state, uninsured and underinsured motorist coverage could be required. If you’re involved in a collision and the at-fault driver does not have enough — or any — car insurance, this coverage would apply. It can apply to your vehicle (uninsured property damage coverage) or your medical bills (uninsured bodily injury coverage).

For example, California has a minimum property damage liability limit of $5,000. If your $25,000 vehicle is totaled in by a driver with the minimum coverage, you could file an underinsured motorist insurance claim in order to receive financial compensation. 

To summarize, uninsured or underinsured motorist insurance covers your vehicle when:

  • Your vehicle/person is damaged by a driver without any insurance
  • Your vehicle/person is damaged by a driver who flees the scene
  • Your vehicle/person is damaged by a driver without sufficient coverage for your vehicle, your property, or your medical expenses.

For more information, reference our full guide.

 

Medical payments

Currently, medical payments coverage (or MedPay) is only required in New Hampshire, Pennsylvania, and Maine, but can be added to most policies anywhere in the US. This coverage provides injury protection to the passengers in your vehicle after an accident — regardless of fault. Below are some circumstances in which MedPay coverage could apply:

  • Medical costs
  • EMT/ambulance costs
  • Hospital expenditures
  • Aftercare bills
  • Funeral expenses

MedPay can be handy if you do not have health insurance and are worried about medical coverage after a car accident. For more information, see our in-depth article here.


Personal injury protection

Personal injury protection (PIP) is fairly similar to MedPay. PIP provides more comprehensive injury protection options and is required in all no-fault insurance states. By no-fault insurance, we are referring to states that require each insured to cover their own medical expenses after a car accident. This is where your PIP coverage applies. PIP provides medical expenses and work loss coverage after a car accident — regardless of fault. 

For more information on PIP coverage, see our related articles:

 

Gap insurance

Gap insurance — sometimes called loan/lease payoff — is usually required if you’re financing or leasing a vehicle. It covers the difference between your car loan or lease value and what you would receive via a claim payout. Let’s look at an example. You took a $30,000 loan on a brand new vehicle. Six months later, the vehicle is worth $26,000 — in the event of a total loss, you would only receive its current value ($26,000). Gap insurance would cover the $4,000 you owe on your loan. 

For more information, see our related articles below:

 

Rental reimbursement coverage

If your motor vehicle is damaged in a covered loss, this coverage will reimburse rental car expenses. A covered loss refers to a liability, collision, or comprehensive claim — maintenance would not be an acceptable reimbursement claim under most policies. Rental reimbursement typically does not have a deductible but is subject to coverage limits.

Does car insurance cover rental cars?

Rental reimbursement coverage does not apply to rental vehicles. For many policies, your coverage does transfer to rental vehicles. For more information, see here.

 

Roadside assistance

Roadside assistance is the last car insurance coverage we will discuss. You can purchase through a third party, such as AAA, or via your insurance company. While it can vary, roadside assistance usually covers circumstances such as:

  • Dead batteries
  • Lockouts
  • Flat tires
  • Stuck vehicles 
  • Empty gas tank

Roadside assistance is an optional coverage, but can very fairly helpful if you’re in need. Check out The Zebra's company-by-company roadside assistance program comparison.

 

Which types of auto insurance coverage do you need?

Each insurance company has its own unique coverage options. The primary coverage buckets worth considering:

  • Liability insurance with high coverage limits
  • Comprehensive and collision 
  • Uninsured motorist coverage

If you have a loan or are leasing a vehicle, you are often required to have gap insurance as well. If you’re unsure of which coverage you need, check out our quiz below. If you’re ready to get a car insurance quote, enter your ZIP code below to get started.

Find an affordable policy today!

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Consult The Zebra's auto insurance coverage calculator to learn more about what kind of policy could be right for you.