What Are the Different Types of Car Insurance Coverage?

Car insurance comes in three basic types: liability (required in nearly all states) and optional collision and comprehensive coverage. Your policy may also include optional coverages such as medical, uninsured/underinsured motorist, and specialty coverage.

This article will walk you through the details of each type of coverage and help you learn what coverage may suit your needs. 

Your coverage choices shape your rate. Compare quotes from multiple insurers on Luva and see how.

Liability car insurance pays for injuries and property damage you may cause to other people with your car. It does not pay for your own injuries or repairs to your own car, but it protects you against the financial damage that could result from an at-fault accident.

Liability has two parts:

• Bodily injury liability: Covers other people's medical treatment, lost wages, and your legal defense if you're sued

• Property damage liability: Covers repairs to the other vehicle or to objects you hit, such as a fence or utility pole.

All states except New Hampshire require liability insurance to drive a vehicle on public roads. State minimum liability requirements vary widely, with a common state minimum being 25/50/25. That is, $25,000 per individual’s injuries, $50,000 per accident, and $25,000 for property damage. However, individual state requirements can run much lower or higher.

Note: State minimums are often extremely low compared to potential damages. A state minimum policy won’t cover the costs of a serious injury or damage to another car or property. People with assets to protect often buy additional liability insurance beyond the state minimums.

Collision coverage pays to repair or replace your own car after it hits another vehicle or a stationary object. It applies no matter who caused the crash.

It also covers vehicle rollovers and pothole damage, but not mechanical breakdowns or ordinary wear.

Collision insurance carries a deductible. That’s the amount you pay out of pocket before your insurance policy kicks in. The higher your deductible, the lower your insurance premiums will be, all else being equal.

Collision coverage is typically optional. However, if you are leasing or financing your vehicle, you can expect the lender or leasing company to require collision and comprehensive coverage as extra protection.  

Comprehensive coverage pays for damage to your car from events other than a collision, such as vehicle theft, break-in damage, vandalism, fire, flooding, hail, falling rocks or trees, and deer collisions.

It typically covers windshield repair too, and some states waive the deductible for glass damage.  

However, comprehensive only covers your car itself, not its contents. If a thief breaks a window and steals, comprehensive insurance will pay to repair your window, but not to replace your belongings — those fall under the off-premises coverage in your homeowners or renters insurance policy.¹

Comprehensive coverage is optional under state law. However, like collision coverage, it’s  usually required by lenders and leaseholders. 

The term “full coverage” typically refers to a policy that includes all three of these coverage types:

• Liability

• Collision

• Comprehensive

However, that does not mean you will be covered against everything. Exemptions to your coverage will still apply, and will be listed in your policy.

Deciding whether full coverage is worth it usually comes down to price. Luva lets you compare liability-only and full-coverage quotes based on your driver profile, so you can see the gap before you decide.

Beyond the three core coverages, you can add protection for medical bills, uninsured drivers, breakdowns, and specialty vehicles. The most common options:

• Medical payments coverage (MedPay): Pays medical and funeral costs for you and your passengers after a crash, regardless of fault. 

• Personal injury protection (PIP): Coverage required in no-fault states, goes further than MedPay. It pays medical bills, lost wages, and other related expenses, including funeral costs, for you and your passengers, regardless of fault.

• Uninsured/underinsured motorist coverage: Protects you if an at-fault driver has no insurance or too little to cover the damage, as well as hit-and-runs. According to the Insurance Research Council, about 1 in 3 U.S. drivers – 33.4% – was either uninsured or underinsured as of 2023.²

• Roadside assistance: Covers towing, jump-starts, flat-tire changes, lockouts, and fuel delivery. Specifics vary by insurer. 

• Rental reimbursement: Helps pay for a rental car while your vehicle is being repaired or while you are shopping for a replacement for a covered vehicle that has been totaled.

• Gap insurance: Pays the difference if you’re financing your car and owe more than the car is worth when your car is totaled or stolen. Dealers often sell this coverage, but you can usually get it cheaper from your insurance company. 

• Custom parts and equipment coverage: Insures aftermarket modifications like rims, stereo systems, or custom paint jobs that standard policies cap or exclude.

• Classic, antique, and hot rod coverage: Specialty policies for collector vehicles that insure an agreed value and may limit annual mileage.³

With this many options, it helps to see how they affect your rate before making a decision. Compare quotes with different coverages added on with Luva, so you can find the mix that fits your needs and budget.

Start with your state's required liability limits. Then decide how much more protection your situation requires. Here’s what to consider:

• Your car's value and age: Collision and comprehensive make more sense on newer or financed cars and less on low-value older ones.

• Loan or lease terms: Lenders and lessors almost always require collision and comprehensive coverage. Some may require gap coverage.

• Your assets: State-minimum coverage may not be enough to cover a major accident. If you have assets to protect, consider buying higher liability limits. 

• Your location: Comprehensive coverage may make sense in areas with severe weather or high property crime rates. Uninsured motorist coverage may make sense in areas with many uninsured drivers.  

• How you use the vehicle: Commercial, delivery, or rideshare use generally requires a separate endorsement or a commercial policy.

When comparing quotes, use the same limits, deductibles, and coverages across all insurers so you're comparing the same level of protection rather than just the lowest price.