Types of Car Insurance

Written by  Hira Tanweer

Edited by  Michael Kitchen

+ 1 More

Updated Feb 03, 2025 Content was accurate at the time of publication.

Different types of car insurance cover different things. Liability insurance covers damage to others, while comprehensive and collision insurance cover damage to your own vehicle.

Some coverage is required by state law. Learn about car insurance coverages to decide what type of insurance you need and how much to purchase.

Types of car insurance that are required

Most states require drivers to have some car insurance, but the minimum amount of coverage needed varies by state. Also, most states require drivers to have liability coverage.

If you live in New Hampshire, you are not required to purchase car insurance. However, you have to have enough funds to meet the state’s financial responsibility requirements in case you’re responsible for an accident.

In Virginia, you’re allowed to drive without car insurance if you pay a $500 uninsured motor vehicle fee.

Liability coverage

Liability coverage helps cover the cost of injuries and damage to other people and their property in an accident you caused. Liability coverage includes two types of protection: bodily injury and property damage.

If you’re responsible for a car accident, bodily injury liability can help pay for medical bills, lost wages, legal expenses and funeral expenses. Property damage helps pay for damages to someone else’s property that you caused. This includes damage to vehicles as well as damage to someone’s home or business.

Most states require drivers to have at least a minimum amount of liability coverage. Bodily injury requirements can range from $15,000 to $50,000 per person and $30,000 to $100,000 per accident, depending on your state. Property damage liability requirements can range from $5,000 to $25,000 per accident.

Uninsured and underinsured motorist coverage

Uninsured motorist coverage (UM) protects you against drivers who don’t have car insurance. This coverage helps cover medical bills if you’re in a car accident an uninsured driver causes. Uninsured motorist coverage can also protect you if you’re involved in a hit-and-run.

Underinsured motorist coverage (UIM) can also help you if you’re in an accident that’s caused by a driver who doesn’t have enough liability coverage to cover your medical bills.

Your vehicle can also be covered if it’s damaged, but this will vary by state.

Some states require you to buy uninsured and/or underinsured motorist coverage. In some other states, insurance companies need to offer these coverages, but you can reject them.

Personal injury protection

If you’re in an accident, personal injury protection (PIP) helps pay for injuries to you and the passengers in the car, regardless of whose fault it is.

Personal injury protection may also cover lost income.

You’re required to buy this coverage if you live in a no-fault insurance state. In no-fault states, your own insurance company will pay for medical costs if you’re injured in a car accident, no matter who causes it.

Types of car insurance that are optional

Collision and comprehensive coverage provide additional coverage for your vehicle. Both coverages can help repair or replace your own vehicle if it’s damaged.

Collision coverage

If your car is damaged due to an object or accident with another car, then collision coverage can help pay for repairs to your own car. This is true even if you cause the accident.

If you’re leasing a car or have a loan, you’ll likely be required to purchase collision coverage. However, this coverage isn’t required by states.

Collision coverage typically requires you to pay a deductible before the insurance company will pay for any damages.

Comprehensive coverage

If your car is damaged from something other than a collision, comprehensive coverage could help. This coverage protects you if your car is damaged from theft, vandalism and certain natural disasters.

Comprehensive coverage, like collision coverage, will likely be required if you have a lease or a loan.

Like collision, comprehensive coverage usually requires policyholders to pay a deductible so that your insurance company will pay for car damages.

Medical payments coverage

Medical payments coverage covers yourself and other passengers in a car if there are any injuries from a car accident — regardless of whose fault it is. This coverage can help you pay for ambulance bills as well.

Unlike personal injury protection, medical payments coverage is offered in states that aren’t “no-fault.” It’s also an optional coverage.

Other types of car insurance

You can also purchase optional coverages for your car depending on your needs.

Gap insurance

If your car is totaled, gap insurance can cover the difference between the remaining amount on your car loan and the settlement amount you received from the accident.

Rental reimbursement insurance

Rental reimbursement insurance helps pay for a rental car if your car is being repaired after a covered loss.

Rideshare insurance

If you’re a driver for ridesharing services like Uber or Lyft, there can be gaps in your car insurance — that’s where rideshare insurance comes in. For example, this coverage could help pay for incidents that happen while you’re waiting to accept a passenger.

Emergency road service insurance

If your car breaks down while driving, emergency road service coverage can cover the cost of a tow truck, locksmith and deliveries, like gas and oil.

Classic car insurance

If you have a classic car, then you may need unique protection — which is where classic car insurance comes in.

For instance, classic car insurance can take into account the higher actual value of collectable autos, and also account for vehicles that are rarely driven.