The six most common types of car insurance are liability, collision, comprehensive, personal injury protection (PIP), medical payments (MedPay), and uninsured/underinsured motorist coverage. Almost every state requires drivers to carry certain types of car insurance, but insurers offer optional coverage as well.
The Six Types of Car Insurance
Pays for other people’s expenses after an accident. Required in nearly every state.
Collision:
Pays to repair or replace the policyholder’s car after any accident, regardless of fault. Only required for leased or financed cars.
Comprehensive:
Covers damage to the policyholder’s vehicle caused by something other than an accident. Only required for leased or financed cars.
Personal Injury Protection:
Pays for the policyholder’s direct and indirect medical expenses after an accident. Required in 12 states.
Uninsured/Underinsured Motorist:
Covers vehicle damage and medical expenses after an accident with an uninsured/underinsured driver. Required in 20 states.
Medical Payments:
Pays for the policyholder’s direct medical expenses after an accident. Required in two states.
Most Common Types of Car Insurance
Liability Car Insurance
What It Covers: Other people’s medical bills and vehicle repairs after accidents that you cause. It does not cover any expenses for you or your passengers.
Who Should Get It: Drivers in almost every state are required to have liability insurance in order to drive legally.
Collision Car Insurance
What It Covers: Damage to your own vehicle if you’re involved in an accident with another car, you hit a stationary object, or you get into a single-car accident.
Who Should Get It:
Drivers with a car loan or a lease will be required to carry collision insurance. You should also get it if you can’t afford to repair or replace your car if it’s unexpectedly damaged.
Comprehensive Car Insurance
What It Covers:
Damage to your own vehicle that’s caused by something other than an accident, like vandalism or a natural disaster.
Who Should Get It:
Drivers with a car loan or a lease will be required to carry comprehensive insurance. You should also get it if you can’t afford to repair or replace your car if it’s unexpectedly damaged.
Personal Injury Protection (PIP)
What It Covers:
Medical expenses for you and your passengers after an accident. Qualifying expenses can include traditional medical bills as well as costs not typically covered by health insurance such as lost income, child care, or even a funeral.
Who Should Get It:
Drivers in any of the 12 states where PIP is required. Even if it’s not required, you should purchase PIP if it’s available in your state and you can afford it, since it can protect you against hefty medical bills.
Uninsured/Underinsured Motorist Coverage
What It Covers:
Medical bills and vehicle repairs if you’re in an accident caused by an uninsured motorist or a driver who doesn’t have enough liability insurance to cover your expenses.
Who Should Get It:
Drivers in the 20 states that require uninsured motorist coverage. You should also consider purchasing it if you don’t have overlapping types of coverage, like collision insurance or PIP.
Medical Payments (MedPay) Coverage
What It Covers:
Accident-related medical expenses for you, your passengers, your household members, and other policyholders. It can also cover the copays and deductibles of other insurance policies, including health insurance and PIP. This coverage type is similar to PIP but is more limited in scope.
Who Should Get It:
Drivers in Maine and New Hampshire, where it’s required. If MedPay is optional in your state, you should still purchase it to supplement existing health insurance and PIP coverage.