What are the 5 types of car insurance?

Comprehensive insurance is coverage that helps pay for the cost of damage to your vehicle when you're involved in an accident not caused by a collision. Comprehensive car insurance covers losses from things like theft, vandalism or extreme weather events.

Comprehensive coverage is never required by state law, but it is usually needed for cars that are leased or financed.... read full answer

What Comprehensive Insurance Covers

• Theft
• Vandalism
• Damage from falling objects
• Flood damage
• Fire damage
• Damage from animals
• Damage from natural disasters
• Glass damage, such as a cracked windshield

Why You Should Get Comprehensive Insurance

You should consider buying comprehensive coverage if you cannot afford to pay out of pocket to repair or replace your car in a worst-case scenario. Comprehensive insurance is usually considered to be a good investment since it’s cheaper than other types of car insurance and covers events that are out of your control as a driver. A good rule of thumb is that if the cost of comprehensive insurance exceeds 10% of your vehicle’s value, you can consider dropping it.

To learn more, check out WalletHub’s guide to comprehensive insurance.

The three types of car insurance that are universally offered are liability, comprehensive, and collision insurance. Drivers can still purchase other types of auto insurance coverage, like personal injury protection and uninsured/underinsured motorist, but they are not available in every state.

3 Major Types of Car Insurance Explained

1. Liability insurance... read full answer

Liability car insurance is coverage that pays for other people’s expenses after accidents that you cause, and there are two components of it. Property damage liability insurance pays for any damage that you cause to someone’s property, and bodily injury liability insurance pays for their medical bills.

Liability coverage is the most common type of car insurance. It is required in almost every state.

2. Comprehensive insurance

Comprehensive car insurance pays to repair or replace your vehicle when it is damaged by something other than an accident, such as vandalism or a natural disaster. It is not required in any state, but it is usually mandatory for vehicles that are leased or financed.

3. Collision insurance

Collision insurance is a type of car insurance that covers damage to your vehicle that is caused by an accident, regardless of who was at fault. It is not required in any state, but it’s usually mandatory for vehicles that are leased or financed.

Other Types of Car Insurance

In addition to the 3 major types of car insurance – liability, collision and comprehensive – there are several other types of coverage that are less frequently required but still helpful in the right situation, including:

• Personal Injury Protection (PIP): Pays for several different medical-related expenses after an accident, including loss of income and child care.
• Medical Payments (MedPay) Coverage: Covers medical bills after an accident.
• Uninsured/Underinsured Motorist Insurance: Pays for your vehicle repairs and medical bills if you are involved in an accident with someone who doesn’t have enough insurance coverage.

To learn more, check out WalletHub’s guide to the different types of car insurance.

The two main types of car insurance policies are liability-only and full coverage. While liability-only policies just have bodily injury and property damage liability insurance, full coverage includes comprehensive and collision insurance in addition to state-minimum coverage.

In other words, a liability-only insurance policy will only pay for other people’s property damage or injuries after accidents that you cause, while a full coverage policy can cover your own vehicle repairs and medical expenses, depending on the particular types of insurance you include. For example, full coverage won’t pay for your medical bills after an accident if you don’t purchase PIP or MedPay.... read full answer

So, even though liability and full coverage are the two main types of car insurance policies, there are still several specific types of car insurance that drivers can purchase.

The Different Types of Car Insurance

• Liability
• Comprehensive
• Collision
• Personal injury protection (PIP)
• Medical payments (MedPay)
• Uninsured/underinsured motorist

In some cases, you may not have the ability to choose between liability-only and full coverage insurance. If your state requires you to have coverage in addition to liability insurance, then a liability-only policy is not an option for you. Additionally, if your car is leased or financed, your lender or lessor may require you to purchase full coverage.

To learn more, check out WalletHub’s guide to the different types of car insurance.