Types of Car Insurance Coverage
Make sure you have adequate coverage and the right insurance add-ons.
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Car insurance can be confusing, and it can be hard to know which coverage option is best and how much you need. You can purchase a few types of car insurance coverage and add optional coverages to your policy, depending on what the insurer offers.
To know which type of insurance is best for you, it’s important to understand what each type of car insurance covers. How much coverage you need will depend on your location, the type of car you drive, your personal situation, and your risk tolerance.
Quick Facts
Liability-only coverage and full coverage are the two main types of car insurance.
You can purchase add-ons to enhance your coverage, like roadside assistance and uninsured/underinsured motorist coverage.
If you’re a rideshare driver or drive a classic car, you’ll likely need additional coverage.
Main types of car insurance coverage
Liability-only coverage and full-coverage insurance are the two main types of car insurance coverage. While liability-only coverage is typically cheaper than full coverage, it doesn’t provide as much financial protection. You can also purchase add-ons — also known as optional coverages or riders — to get extra protection in various situations.
Liability-only coverage
Liability-only car insurance is a car insurance option that covers injury to another person and damage to their car if you cause an accident. However, it doesn’t cover your car’s damage or medical bills when you’re at fault. Because of that, you’ll have to pay for your own healthcare and repairs, unless the other driver caused the accident and has liability coverage to cover you.
Liability car insurance is typically cheaper than full-coverage car insurance. It costs $170 per month on average compared to $253 per month on average for full-coverage car insurance across the U.S. However, with that affordability comes the risk that you might not have enough coverage to pay for your damages and injuries if you cause an accident.
Liability auto insurance can include bodily injury, property damage, personal injury protection (PIP), uninsured/underinsured motorist, and medical payments (MedPay) coverages.
Full-coverage insurance
Full-coverage car insurance is a collection of different coverages. It typically includes liability insurance, collision coverage, and comprehensive coverage. On average, full-coverage car insurance costs $253 per month in the United States.
Most drivers choose full-coverage insurance over liability insurance. In fact, 79% of insured drivers purchase comprehensive coverage in addition to liability insurance, and 75% buy collision coverage, according to the Insurance Information Institute’s analysis of 2019 data from the National Association of Insurance Commissioners (NAIC).2
Additional coverage options
Depending on your personal circumstances, you might want to consider additional coverage options above and beyond traditional liability-only or full-coverage insurance. Here are some examples.
How to choose the right car insurance coverage types
Car insurance is intended to protect you financially when the unexpected happens. A serious car accident can lead to medical issues, property damage, and more. It’s important for your insurance to be adequate enough to cover you in a worst-case scenario.
When deciding on the right car insurance coverage for you, consider a few factors:
Where you live
Your assets
How much of a deductible you can afford
Your healthcare insurance and deductible
The value of your car
You might live in an area prone to natural disasters, where you’d benefit from having coverage that protects you if your car sustains weather-related damage. You might have a high net worth or significant assets you want to protect in the event of a lawsuit. Additionally, you might or might not have the funds to cover a large deductible.
Speak with an insurance agent or your insurance company representative to determine what the best coverage might be for your particular personal situation. No one wants to think about a worst-case scenario, but if it happens, you’ll be glad you had adequate insurance to handle the unexpected.
Coverage types FAQs
Read Insurify’s guides to learn how to compare car insurance quotes and how to shop for car insurance before buying a policy. Here’s some additional information about car insurance so you can make an informed choice about which coverage is best for you.
What type of insurance covers damage to your car?
Collision and comprehensive insurance cover damage to your car. Collision is typically for accidents, and comprehensive is for damage outside of an accident, including vandalism, hitting animals, falling objects, and more.1
What type of insurance covers weather damage?
If you want your car insurance to cover you for weather-related damages, purchase comprehensive insurance. Comprehensive car insurance provides coverage when a flood, snowstorm, a tornado, high winds, lightning, and other unexpected weather events damage your car.1
What type of car insurance is required by law?
Forty-nine states and Washington, D.C. have a minimum car insurance requirement by law. Each state’s laws determine the minimum amount of bodily injury coverage and property damage coverage. Because each state requires different amounts of liability coverage, it’s important to look up minimum requirements where you live.
What type of car insurance should you choose?
At a minimum, you should have the car insurance policies your state requires. “We encourage our clients to purchase at least 100/300/100 in order to avoid any future liability suit against them,” says Eyal Ron, Iron City Insurance founder. That means $100,000 per person for bodily injury liability, $300,000 per accident for bodily injury liability, and $100,000 per accident for property damage liability.
How much auto insurance coverage do you need?
You'll need to buy at least enough liability insurance to meet your state's minimum requirements. And, if you lease or finance your vehicle, your leasing company or lender will likely require you to have full coverage. It's also a good idea to buy as much auto insurance as you need to feel comfortable that you have protection against a lawsuit stemming from an accident. In general, make sure to get enough insurance to protect your assets if someone sues you.6
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