The Complete Guide to Car Insurance Coverage Types in 2026
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Written byAnna Baluch
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Anna BaluchInsurance Writer
Anna Baluch is a Cleveland-based personal finance and insurance expert who’s written for Compare.com since 2023. With an MBA from Roosevelt University, she enjoys writing educational content that helps people make smart financial decisions.
Her work can be seen across the web in several notable publications, including Freedom Debt Relief, Credit Karma, RateGenius, and The Balance.
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Edited byMatthew Gross
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Matthew GrossEditor
Matthew Gross is an editor at Compare.com. With a background in editing and SEO, he’s passionate about creating content that helps readers get the information they need to make more informed decisions. Prior to Compare.com, Matthew brought his user-centered approach to his work with global brands like Apple and Adobe.
Matthew graduated from Illinois State University, where he earned his bachelor’s degree in Journalism.
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Reviewed byMark Friedlander
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Mark FriedlanderSenior Director, Media Relations | Insurance Information Institute
Senior Director, Media Relations, with Triple-I
30+ years of industry experience
Leadership positions at several trade organizations
Mark Friedlander is Senior Director, Media Relations, at the Insurance Information Institute (Triple-I), where he serves as a national spokesperson, handling a wide array of insurance industry media issues. His responsibilities also include spearheading the association’s hurricane season communications strategy and its member company support and media outreach.
Throughout his 30+ years in the insurance industry, Mark has held leadership positions across multiple trade groups, including serving as Board Chair and President of the Insurance Marketing & Communications Association (IMCA). He has also advised editorial teams at organizations such as U.S. News & World Report, Insurify, Bankrate, and more.
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In This Article
Most states require some amount of auto insurance coverage. But each state has its own specific criteria. So drivers in New York have to meet different car insurance requirements than drivers in Ohio.
In addition to state-required liability coverage, you can buy additional coverage for greater protection behind the wheel. Most insurers offer a range of optional coverages, from gap insurance to rental car coverage.
Let’s explore the different types of car insurance coverage and what they cover.
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The 6 Main Types of Car Insurance Coverage
When shopping for insurance, you’ll usually come across these six core auto insurance coverages:
Coverage Type  | What It Covers |
|---|---|
| Liability | Damage and injuries you cause in at-fault accidents |
| Collision | Damage to your vehicle from an at-fault crash |
| Comprehensive | Damage to your vehicle from non-collision events |
| Uninsured/underinsured motorist (UM/UIM) | Damage and injuries from uninsured and underinsured drivers |
| Medical payments (MedPay) | Your medical bills |
| Personal injury protection (PIP) | Your medical bills, plus lost wages and other related costs |
Liability coverage
What it covers: Bodily injuries and property damage to the other party after you cause an accident
When you need it: With the exception of New Hampshire, every state (and Washington D.C.) requires drivers to have liability insurance
Unless you live in New Hampshire, you must buy liability coverage to legally drive. Liability insurance typically consists of bodily injury liability and property damage liability coverage. Bodily injury liability coverage helps pay for injuries you cause to others in an accident. Property damage liability covers physical damage you cause to someone’s car or other property like a building or fence.
Liability coverage limits typically include three numbers, which correspond to each coverage. So if your limits are 25/50/25, your car insurance company will pay out the following maximums in a covered claim:
$25,000 per person for bodily injuries
$50,000 per accident for bodily injuries
$25,000 per accident for property damage
Collision coverage
What it covers: Colliding with another car or object
When you need it: If you finance or lease your car, have little driving experience, can’t afford out-of-pocket repair costs, or own a high-value vehicle
Collision insurance is a part of full-coverage car insurance and covers you after you hit another vehicle or object, like a tree or telephone pole. Your lender usually requires you to have collision coverage if you finance or lease your car.[1]
If you have a luxury car or can’t afford high out-of-pocket repair costs, you should consider collision insurance. You’ll still need to pay a deductible if you file a claim, which is the amount you’re responsible for paying before your insurance covers the rest. Approximately 80% of U.S. drivers purchase collision coverage for a greater level of financial protection from at-fault accidents, according to Triple-I.
Comprehensive coverage
What it covers: Non-collision losses
When you need it: If you lease or finance your vehicle, have a high-value car, or live in an area with frequent natural disasters
Comprehensive coverage is another part of a full-coverage policy that covers vehicle damage from non-collision incidents. It pays for damage from things like severe weather, theft, fire, vandalism, falling objects, broken windshields, and more.
You can think of it as the catch-all part of your car insurance policy. Just like collision coverage, your lender likely requires you to have comprehensive coverage if you finance or lease your car.
Uninsured/underinsured motorist coverage
What it covers: Accidents with uninsured or underinsured drivers who are at fault
When you need it: After an accident with an uninsured or underinsured driver, a hit-and-run, or if the other driver’s insurer goes out of business
Uninsured/underinsured motorist (UM/UIM) insurance covers accidents with at-fault drivers who don’t have enough car insurance or lack coverage altogether.[2] [3] It may also apply to other situations, like hit-and-runs or when the other driver’s insurer goes out of business.
Similar to liability coverage, UM/UIM insurance covers both bodily injury and property damage (specific levels of coverage can vary by state). But in this case, it’s for your injuries and damage. Even if your state doesn’t require it, UM/UIM coverage is typically a smart investment. Without it, you might have to pay out of pocket after an accident with an underinsured or uninsured at-fault driver.
Personal injury protection (PIP)
What it covers: Medical bills, lost wages, funeral costs, and in-home services like childcare
When you need it: If you live in a no-fault state or don’t have adequate health insurance
Personal injury protection (PIP) insurance helps pay for your and your passengers’ medical bills that your health insurance doesn’t cover after an accident.[4] It can also pay for lost wages and in-home services, like childcare or household help. It also covers funeral expenses when an accident causes fatalities.
If you live in one of these states, you legally must have PIP coverage:[5]
Delaware
Florida
Hawaii
Kansas
Massachusetts
Michigan
Minnesota
New Jersey
New York
North Dakota
Oregon
Utah
Medical payments coverage (MedPay)
What it covers: First-party medical expenses and legal bills, up to your policy limit
When you need it: If you or your passengers need help paying medical bills after an accident
Medical payments (MedPay) insurance covers all kinds of medical expenses, like health insurance deductibles, ambulance fees, surgeries, and exams. MedPay can reimburse you for medical bills that your regular health insurance policy might not cover.
Unlike PIP, MedPay is only for medical expenses, not lost wages or other services. Only Maine, New Hampshire, and Pennsylvania require drivers to have MedPay coverage.
Other Car Insurance Coverage Types
In addition to the coverages listed above, you can opt for more coverage for more protection and peace of mind. Let’s take a look at some other coverage options you might want to consider.
Gap insurance
What it covers: The difference between the value of your car and your remaining loan balance if you total your car or if someone steals it
When you need it: If you lease or finance your car, put less than 20% down, or roll over negative equity from a previous loan
Gap insurance covers the difference between your vehicle’s value and what you still owe on your car loan or lease.[6] Without gap coverage, you’d have to cover the difference between your insurance payout and loan or lease balance if you total your car or someone steals it. It can be especially important if you put less than 20% down or rolled over negative equity from a previous loan.
But gap insurance isn’t worth it if you buy your car in cash, you make a large down payment, or your outstanding car loan is less than your vehicle’s actual cash value. Most lenders offer gap insurance, but you can also buy it from your car insurance company as an endorsement to your existing auto insurance policy. This is typically the most cost effective option for purchasing the coverage.
Roadside assistance
What it covers: Emergency services like towing, jump-starts, and fuel delivery
When you need it: During emergency situations on the road, like if you get a flat tire or your car battery dies
If you find yourself in an emergency situation while driving, roadside assistance can be a real lifesaver. Although every policy is different, most cover towing for mechanical breakdowns, battery jump-starts, fuel delivery, tire changes, and lockout assistance. Most insurers offer 24/7 roadside assistance as an optional coverage, but you can also get it through a subscription-based auto club, like AAA.
Rental car reimbursement coverage
What it covers: The cost of renting a car while your car is in the repair shop after a covered claim, stolen items from a rental, and at-fault accidents with a rental
When you need it: If your vehicle is in the repair shop after a covered claim, it can help pay for a rental car so you can get around
Rental car coverage reimburses you (up to the limits of your policy) for a rental car while your vehicle is in the repair shop after a covered claim.[7] It may also cover stolen items from a rental car, plus property damage and bodily injuries you cause to others while driving a rental. Many insurers have contractual agreements with rental car providers, which include discounted rates and direct billing to your insurer.
What “Full Coverage” Really Means
The term “full-coverage” car insurance doesn’t have a set definition. Instead, it varies by insurer and includes a combination of policies, like liability insurance, collision coverage, and comprehensive coverage. In some states, it also includes UM/UIM coverage and PIP.
Despite its name, full-coverage auto insurance doesn’t actually cover everything. That’s why it’s important to understand the specifics of your plan, or you might face surprise costs.
How to Choose the Right Coverage for You
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Every driver has unique needs from their insurance. Consider the factors below to help you determine the ideal car insurance coverage for your unique situation.
State requirements: You must meet the required minimum insurance limits in your state. Check with your insurance agent or your state’s department of motor vehicles (DMV) or department of insurance to find out what you need.
Age and value of your car: If you own an expensive vehicle, you may want more auto insurance coverage. But if you have an older car that isn’t worth much, minimum coverage may suffice.
Your finances: If you can cover high out-of-pocket repair, legal, and medical costs after a car accident, you may need less car insurance than a driver on a tight budget.
How often you drive: The frequency of your driving can play a major role in choosing the right coverage. For example, if you work remotely, liability coverage might be enough. But if you drive frequently for work or personal reasons, you might want additional coverage.
Risk tolerance: Some drivers are more willing than others to take on risk. If you prefer to minimize your risk while driving, full coverage may bring you greater financial peace of mind.[8]
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Car Insurance Coverage Types FAQs
Figuring out the right car insurance coverage can be confusing, but we’re here to help. Below, we answered some common questions about auto insurance coverage types.
The three main types of auto policies are liability coverage, collision coverage, and comprehensive coverage. Most states require you to have liability insurance to legally drive. If you finance or lease your car, your lender usually requires you to have collision and comprehensive coverage.
In car insurance, 100/300/100 refers to liability coverage limits of $100,000 per person of bodily injury liability coverage, $300,000 per accident of bodily injury liability coverage, and $100,000 per accident of property damage coverage.
Whether you’re better off with collision or comprehensive insurance depends on your unique situation. Collision coverage helps pay for at-fault accidents with vehicles or stationary objects, while comprehensive coverage applies to non-collision situations like damage from natural disasters, fire, theft, and vandalism.
If you have an older car or can pay for repairs yourself, you may need only liability coverage. Full coverage is usually a better fit if you want more financial protection, especially if you want to avoid high out-of-pocket expenses after an at-fault accident.
The state you live in usually determines the minimum amount of liability coverage you need. You can find this information on your state’s DMV or department of insurance website. Most insurance professionals recommend drivers purchase 100/300/100 liability coverage for adequate financial protection from at-fault accidents, according to Triple-I.
It depends. Uninsured motorist coverage is likely a good idea, even if your state doesn’t require it. It can prevent you from paying hefty out-of-pocket expenses if an uninsured driver hits you. That said, adding uninsured motorist coverage usually increases your insurance premium.
Not usually. If your car is 10 years old, you likely don’t need full-coverage car insurance. Full coverage will probably cost more than your car’s replacement cost value.[9] Liability insurance may be a smarter investment.
Insurance experts recommend you can typically drop comprehensive car insurance if your car is worth less than 10 times your premium. Your maximum payout might not be cost-effective, especially after you pay your deductible.
Methodology
Data scientists at Compare.com analyzed more than 50 million real-time auto insurance quotes from more than 75 partner insurers in order to compile the rates and statistics seen in this article. Compare.com’s auto insurance data includes coverage analysis and details on drivers’ vehicles, driving records, insurance histories, and demographic information.
All the rates listed in this article have been collected from a combination of real Compare.com quotes and external insurance rate data gathered in collaboration with Quadrant Information Services. Compare.com uses these observations to provide readers with insights into how auto insurance companies determine their premiums.
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Sources
- Georgia Office of the Commissioner of Safety Fire. "Auto."
- Arizona Department of Insurance and Financial Institutions. "Uninsured and Underinsured Motorist Coverage."
- Washington State Office of the Insurance Commissioner. "What to do if you’re hit by an uninsured or underinsured driver."
- Texas Office of Public Insurance Consel. "Understanding PIP vs Med-Pay."
- Experian. "What States Have No-Fault Insurance?."
- Consumer Financial Protection Bureau. "What is Guaranteed Asset Protection (GAP) insurance?."
- Ohio Department of Insurance. "Rental Car Insurance."
- Insurance Information Institute. "8 questions to ask before buying auto insurance."
- Insurance Information Institute. "Nine ways to lower your auto insurance costs."
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Learn more about us, our team, and what makes us tick.
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Anna BaluchInsurance Writer
Anna Baluch is a Cleveland-based personal finance and insurance expert who’s written for Compare.com since 2023. With an MBA from Roosevelt University, she enjoys writing educational content that helps people make smart financial decisions.
Her work can be seen across the web in several notable publications, including Freedom Debt Relief, Credit Karma, RateGenius, and The Balance.
Matthew GrossEditor
Matthew Gross is an editor at Compare.com. With a background in editing and SEO, he’s passionate about creating content that helps readers get the information they need to make more informed decisions. Prior to Compare.com, Matthew brought his user-centered approach to his work with global brands like Apple and Adobe.
Matthew graduated from Illinois State University, where he earned his bachelor’s degree in Journalism.
Mark FriedlanderSenior Director, Media Relations | Insurance Information Institute
Senior Director, Media Relations, with Triple-I
30+ years of industry experience
Leadership positions at several trade organizations
Mark Friedlander is Senior Director, Media Relations, at the Insurance Information Institute (Triple-I), where he serves as a national spokesperson, handling a wide array of insurance industry media issues. His responsibilities also include spearheading the association’s hurricane season communications strategy and its member company support and media outreach.
Throughout his 30+ years in the insurance industry, Mark has held leadership positions across multiple trade groups, including serving as Board Chair and President of the Insurance Marketing & Communications Association (IMCA). He has also advised editorial teams at organizations such as U.S. News & World Report, Insurify, Bankrate, and more.