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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.
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.
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