Claire Smith Last Updated On: July 4, 2023

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Different Types of Car Insurance Coverage

Car Insurance Coverage

Options. Choices. Every day we face a multitude of choices; while driving, we can turn right or left, and when shopping for car insurance, you have different options to consider. The beauty of buying car insurance is that there are many right choices. The best car insurance is a combination of which coverage choice you select, e.g., comprehensive, and then insurance companies generate your premiums based on your personal profile—your zip code, driving habits, age, and driving history.

The only trouble with having the freedom to choose the best car insurance coverage for you is taking the time to learn about each coverage so you can pinpoint which option is perfectly suited to your unique needs!

If you’re exploring your car insurance options, we’ll do a deep dive into the most common car insurance coverages so you don’t have to. Once you’ve locked onto the coverage option that makes the most sense for you, don’t forget to grab your free no-risk quote from Consumer Coverage here!

…Coming up you’ll discover the difference between required and optional car insurance coverage. Let Consumer Coverage help you make sense of your car insurance choices!

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Option 1: Required or “Liability” Insurance

There are two types of car insurance coverage: Required and optional. This means the first step to decoding the best car insurance for you is knowing the difference between required and optional car insurance.  

Also, keep in mind that every state handles liability insurance differently. So, with that in mind, you may want to do a quick search on Consumer Coverage’s blog for your state’s car insurance liability requirements.

Definition: Liability car insurance protects other drivers from paying out of pocket for medical expenses or vehicle damages that you cause. That means legally, if you’re responsible for an accident, you have to pay for the other person’s damages.

  • Note: Liability does not cover your accident costs to your person or vehicle.

Here’s a list outlining the basic “core” elements that make liability car insurance:


Bodily Injury

If you hit another driver, aka “you’re at fault,” bodily injury coverage will pay for the driver and their passenger’s medical expenses—to a point. Bodily injury is expressed numerically, like 25/50, which stands for $25,000 of medical expense coverage per person, for a total of $50,000 per accident. 

  • Common Liability Amount: Most states’ liability coverage is 25/50.

Property Damage

If you’re responsible for triggering an accident, you’ll be on the hook for medical expenses and property damage, such as vehicular repairs. Akin to bodily injury, your provider will express your coverage limit like 25, which means you have a total coverage limit of $25,000 per accident. Property damage covers more than just vehicle damage; it also pays for damage to what you hit, like, a house or pole.

    • Common Liability Amount: The most common state minimum for liability is 25.

Certain States also Require…

Uninsured or Underinsured Motorist Coverage (UM/UIM)

20 states require drivers to obtain uninsured/underinsured motorist coverage. Although UM and UIM are different types of auto insurance coverage, insurance policies usually sell them as a package. So what’s the difference?

    • Uninsured Motorist Coverage: UM means if a driver without insurance hits you, your policy will kick in to pay the damages to your person and property.
    • Underinsured Motorist Coverage: UIM protects you from paying out of pocket for medical and property damages should someone with insufficient car insurance hit you.

UM/UIM minimum amounts are expressed like liability, with the most common value being 25/50/25. This amount means insurance will pay $25,000 per person for bodily injuries for a total coverage per accident of $50,000. Insurance providers will also pay $25,000 toward property damages. Here are some of what UM/UIM will cover:

    • Medical expenses
    • Hospital expenses
    • Lost wages if you cannot work because of your injury
    • Replacement services, like childcare or house cleaning, if your injury prevents you from being able to perform your daily activities
    • Vehicular repairs
    • Home repair (if someone hits your home)

Which States Require UM/UIM?

The 20 states that require uninsured or underinsured motorist coverage are:

    • Connecticut
    • District of Columbia
    • Illinois
    • Kansas
    • Maine
    • Maryland
    • Massachusetts
    • Minnesota
    • Missouri
    • Nebraska
    • New Hampshire
    • New York
    • North Carolina
    • North Dakota
    • Oregon
    • South Carolina
    • South Dakota
    • Vermont
    • Virginia
    • West Virginis 
    • Wisconsin

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Option 2: Optional Car Insurance Coverage

Obtaining liability car insurance satisfies state minimums and protects motorists from you, but what about protecting yourself? If you want to protect yourself from paying out of pocket for vehicle repair or medical expenses, you have a few different types of auto insurance coverage options to consider.


Protect Your Vehicle

If you want to beef up your car insurance coverage, the first place to start is by protecting your personal property—your car. Here are the most common choices to cover vehicular damage:


If you’re involved in a car accident, regardless of fault, having collision on your policy protects you from paying for car repairs. If your car is totalled, insurance will pay for the depreciated value of your vehicle, in other words, the actual cash value (ACV). You can investigate what your vehicle is worth by browsing Kelley Blue Book and car sales websites to find comparables to get an idea of your vehicle’s worth.

  • Note: Keep in mind insurance will pay for the repairs of your vehicle, but only after you’ve paid your deductible. 


If you want bumper-to-bumper protection on and off the road, you’ll need comprehensive coverage for off-road protection. Off-road protection doesn’t mean off-roading, but rather when you’re not using your car, like when it sits in the driveway. 

Comprehensive car insurance will pay to repair or replace your vehicle—including the windshield—from:

  • Weather-related events such as floods, wind, or hail
  • Vandalism or theft
  • Falling objects
  • Colliding with an animal
    • Note: Insurance will pay for these damages once you’re deductible has been paid.

Uninsured Motorist Property Damage

If you live in a state that doesn’t mandate you carry UM/UIM coverage, you can elect to add it to your policy. A small deductible amount is attached to UM/UIM policies of $100-$300.

Protect Yourself

If your health insurance isn’t as robust as you’d like, you can also purchase medical coverage to protect yourself from paying for accident-related medical costs. 

These are some options available to you:


If you’re involved in a car accident—regardless of fault—or struck as a pedestrian, MedPay is excellent supplemental health insurance. MedPay is an inexpensive policy add-on, typically around $5 a month, that gains you between $1,000-$10,000 towards accident-related medical payments. Often drivers will take out MedPay to supplement their coverage, as it can cover the cost of deductibles. 

Some features of MedPay are:

  • It applies to anyone in a household, not just the policyholder
  • It only covers medical expenses
  • MedPay is required in 2 states—Maine and New Hampshire
  • MedPay can be used as a stand-alone or to supplement health insurance or PIP
  • MedPay is less comprehensive than PIP
  • No deductible
  • Fast payouts
  • Works whether you’re driving or the passenger, just so long as you’re seeking medical help as a result of a vehicular accident 

Personal Injury Protection (PIP)

Another health insurance coverage option is PIP. However, if you have dynamic health insurance PIP will likely be redundant, which means PIP is excellent for individuals that don’t have robust health insurance coverage. PIP is great health insurance because it will cover medical costs, lost wages, funeral costs, and services like childcare or house cleaning. 

These are some features of PIP:

  • Fast payouts
  • Higher coverage limits
  • Costs more than MedPay
  • PIP is required in no-fault states: Delaware, Florida, Hawaii, Kansas, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Oregon, and Utah.

Option 3: Additional Coverage Choices

Policyholders consider some of these additional types of car insurance coverage “nice to have.” None of these coverage options are mandatory, but that doesn’t detract from their usefulness.

GAP Coverage

Do you lease or finance a car? If the answer is yes, then you should have GAP coverage. Suppose you get into an accident and your vehicle is totalled, and you haven’t finished paying off your car; without this coverage, you will only get the depreciated value of the vehicle—unless you have GAP coverage. If your vehicle is totalled, lost, or stolen, GAP insurance will pay the difference between the depreciated value of your car (ACV) and the balance owing, so you’re not stuck paying for a vehicle you don’t have. 

New Car Replacement

Do you have a new or newer model car? With a new car replacement policy add-on, if your vehicle is totalled, this will pay for a replacement. 

Roadside Assistance

If you get stranded with a flat tire or lock yourself out of your car, roadside assistance is a great addition to any car insurance policy as it’ll pay for a tow truck to come and get you back behind the wheel—or tow you to your mechanic, whichever the case may be! Roadside assistance covers:

  • Towing
  • Flat tires
  • Locksmith (usually)

Rental Car Coverage

For people who want total peace of mind or those who drive a lot having rental car reimbursement is a great policy add-on. If your car is damaged in an accident and insurance is footing the repair bill, if you have rental car coverage, your insurance provider will also pay for your rental car.

Final Thoughts on the Most Common Types of Car Insurance

Having a car and needing car insurance go together like peanut butter and jelly! Sure, you can have a car without insurance, but if you get busted driving without car insurance, you’re looking at fines, penalties, and many headaches. Fortunately, you can find the winning combo if you do your homework.

And if you’re still a bit hazy about which car insurance coverage is best for you, then ask yourself these questions:

  • How much can I comfortably afford to spend per month? Per year? If money is tight, then liability is your best bet.
  • Do I want on/off-road coverage for my car? If you want your vehicle repair bills covered, consider adding collision to your car insurance policy for your on-road accidents. And for policyholders that want their ride protected when it’s off-road and in park, like in your driveway, you’ll want comprehensive coverage.
  • Do I have/need medical expense coverage? If you want your deductibles covered, MedPay all the way; otherwise, PIP offers great medical expenses and extras.

If you’ve picked out the winning car insurance for you, start hunting for the best insurer by getting your free no-risk quote at Consumer Coverage now!

Claire Smith Claire is a creative entrepreneur with a variety of marketing and content creation skills, including blog and web copy writing, research, and strategy. She has a Masters in Cultural Studies from Queen's University and is known for thinking laterally about marketing, based on her deep knowledge of people and behavior.

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