Auto insurance coverage types protect you in various situations. Liability coverage pays for damage or injury you cause to others. Collision coverage covers repairs to your vehicle after an accident. Comprehensive coverage handles non-collision incidents like theft or natural disasters. Personal injury protection (PIP) covers medical expenses for you and your passengers. Uninsured/underinsured motorist coverage helps if the other driver lacks sufficient insurance. Optional add-ons may include roadside assistance or rental car coverage. Understanding these types helps ensure you’re adequately protected on the road.
What are the different types of car insurance?
There are three primary categories of auto insurance available: comprehensive, fire and theft, third-party, and third-party.
- Third-party: By law, all drivers must carry a minimum of third-party auto insurance. This protects you in the event that you harm someone else or damage someone else’s vehicle. However, it won’t pay for any personal injury or auto damage.
- In addition to providing you with all the benefits of a typical third-party policy, third-party, fire, and theft insurance shields you in the event that your vehicle is stolen or suffers fire damage. Accidental fires and intentional crimes like arson are also considered forms of fire damage.
- You are most protected if your coverage is comprehensive. In the event that you are involved in an accident, it covers damage to you and your vehicle as well as injuries to other people.
Auto insurance coverage types
While various states have different insurance requirements and offer a variety of extra options (like gap insurance), the majority of basic auto policies include collision, comprehensive, bodily injury liability, personal injury protection, property damage liability, and uninsured/underinsured motorist coverage.
Note that policy limits and prices vary because different types of coverage are priced differently.
Bodily injury liability
Any injuries you, the policyholder or designated driver, inflict on another person are covered by bodily injury liability coverage. When driving someone else’s vehicle with their consent, you and any family members named on the policy are also protected.
Having adequate liability insurance is crucial because, in the event of a catastrophic accident, you could face hefty legal fees. It is recommended that policyholders obtain enough coverage above and beyond the state-mandated minimum liability insurance to protect valuables such as your home and savings.
Medical payments or personal injury protection (PIP)
This coverage pays for the treatment of injuries incurred by the policyholder’s driver and passengers.
PIP, in its broadest sense, can pay for lost income, medical expenses, and the price of substituting services that an injured party in an automobile accident would typically do. It might also pay for burial expenses.
Property damage liability
This insurance covers any harm you (or a driver operating the vehicle with your consent) might inflict on another person’s property. This typically refers to harm done to another person’s vehicle, but it can also refer to harm done to fences, buildings, telephone poles, lamp posts, and other objects your automobile strikes.
Other car insurance types
A wide range of additional auto insurance options are available for you to include in your coverage. The majority of these “extras” are inexpensive and give your car extra, situation-specific coverage.
- To be able to purchase other coverage kinds, you might need to get collision and comprehensive insurance, though.
- Rental reimbursement pays for the cost of a temporary car when your vehicle is being repaired for an insurance-covered reason.
- If you need a tow or a battery jump and break down, roadside assistance can help.
- If you total your vehicle, new-car replacement insurance will replace it with a brand-new vehicle of the same make and model, less your deductible.
- Full glass coverage includes replacement or repair for chipped or broken window glass.
- When you drive for a ridesharing service like Uber or Lyft, your insurance covers you. Most rideshare providers only cover you while you have a passenger or are traveling to pick one up; rideshare insurance provides coverage for the time when you’re waiting between fares.
- If your car breaks down, mechanical breakdown coverage will cover the cost of repairs or new parts—even if there was no collision or other outside damage.
- Value coverage for custom components and equipment will fix or replace any modifications made to your car, such as new spinner rims or a fancy new radio.
- Insurance for classic cars covers repairs for these types of vehicles.
- It will also insure your vehicle for its full appreciated worth, as agreed upon by you and your insurance company.
- Your company or commercial auto insurance will cover you if you use your vehicle for work-related or business purposes.
