6 types of car insurance policy coverages

By Allstate

Last updated: October 2022

If you're buying a new car or shopping for auto insurance, you'll likely need to understand the common types of coverage available on a car insurance policy. The various types of car insurance coverage are available to help protect you, your passengers and your vehicle if you're involved in a car accident.

Depending on where you live, some of these coverages are mandatory and some are optional. Understanding what's required in your state and what each helps cover can help you choose the right coverage for your situation.

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Types of car insurance coverage

Auto insurance is made up of different coverages designed to financially protect you if you’re in an accident or your vehicle is damaged. Some types of coverage are required while others are optional and offer added protection.

Six common car insurance coverage are:

  • auto liability coverage
  • uninsured and underinsured motorist coverage
  • comprehensive coverage
  • collision coverage
  • personal injury protection

Learn about what each of these coverages are and what they would cover, below.

1. Liability coverage

Auto liability coverage is mandatory in most states. Drivers are legally required to purchase at least the minimum amount of liability coverage set by state law. Liability coverage has two components:

  • Bodily injury liability may help pay for costs related to another person's injuries if you cause an accident.
  • Property damage liability may help pay for damage you cause to another person's property while driving.

Learn more: Liability insurance: How to stay protected

2. Uninsured and underinsured motorist coverage

If you're hit by a driver who doesn't have insurance, uninsured motorist coverage may help pay for your medical bills or, in some states, repairs to your vehicle. If you're hit by an underinsured driver, that means they have car insurance, but their liability limits aren't enough to cover your resulting medical bills. That's where underinsured motorist coverage may help, depending on the laws of your state.

Uninsured and underinsured motorist coverage is required in some states and optional in other states.

Learn more: What is uninsured motorist coverage?

3. Comprehensive coverage

Comprehensive may help cover damage to your car from things like theft, fire, hail or vandalism. If your car is damaged by a covered peril, comprehensive coverage may help pay to repair or replace your vehicle (up to the vehicle's actual cash value). This coverage has a deductible, which is the amount you'll pay out of pocket before your insurer reimburses you for a covered claim.

Comprehensive is typically an optional coverage — but your lender may require it if you're leasing or paying off your vehicle.

Learn more: What is comprehensive auto insurance?

4. Collision coverage

If you're involved in an accident with another vehicle, or if you hit an object such as a fence, collision coverage may help pay to repair or replace your car (up to its actual cash value and minus your deductible).

Collision coverage is typically optional. It may be required, however, by your vehicle's leaseholder or lender.

Learn more: What is collision insurance?

5. Medical payments coverage

If you, your passengers or family members who are driving the insured vehicle are injured in an accident, medical payments coverage may help pay for costs associated with the injuries. Covered costs may include hospital visits, surgery, X-rays and more.

Medical payments coverage is required in some states and optional in others.

Learn more: What is medical payments coverage?

6. Personal injury protection

Personal injury protection, or PIP, is only available in some states. Like medical payments coverage, PIP may help pay for your medical expenses after an accident. In addition, PIP may also help cover other expenses incurred because of your injuries — for example, childcare expenses or lost income.

Personal injury protection is required in some states and optional in other states where it's available.

Learn more: Personal injury protection (PIP) Coverage (AKA no-fault insurance)

Other types of auto insurance coverage

You may be able to add the following optional coverages to your car insurance policy, depending on your situation. Your insurance agent can help you understand what each helps cover, so you can put together a policy that's right for you.

Which type of insurance is required by law?

Except for New Hampshire, every state requires drivers to carry property damage and bodily injury liability insurance. Other coverages may be required, depending on your state. These may or may not include uninsured and underinsured motorist coverage, and PIP.

Comprehensive and collision coverage are not required by any state – but many lenders require them for vehicle financing. In those cases, they may also require gap insurance to cover the difference between what you still owe on the vehicle and its current market value.

Get the right coverage for your car

There's no one-size-fits-all approach when it comes to car insurance. Where you live, how you drive your vehicle and the vehicle you drive can help determine the auto insurance fit for you and your wallet.

Many online quoting systems ask you questions about where you live and your driving habits to help suggest coverages worth considering. When you do shop around for auto insurance quotes, be sure to choose the same coverage for each quote so you have apples-to-apples comparisons.