Types of Auto Insurance Coverage in 2025 (Know Your Options)

Several types of auto insurance coverage are required in most states, such as liability coverage, while others are optional. We’ll cover the most common types of car insurance, explain key terms and concepts, and give you tips for finding the best coverage for your needs.

Once the auto insurance coverages are explained, our goal is for you to be able to confidently purchase coverage, knowing that it’s exactly what you need and the best deal you could possibly find.

Looking to find affordable auto insurance coverage for your vehicle today? Enter your ZIP code in our free quote tool.

Types of Auto Insurance Coverage

Depending on the car insurance coverage options you choose, your car insurance policy can cover accident repairs, injuries, vandalism, hitting an animal, windshield damage, rental car coverage, passengers in other cars, pedestrians, damaged property, stolen items, and much more. Read on to learn about the most common types of car insurance coverage.

Liability Insurance

Liability auto insurance coverage is required by law in most states and covers the cost of damages and injuries to other vehicles and people involved in an accident you cause.

As a driver, it’s a given that you are responsible for your own safety and the safety of the passengers in your vehicle. However, liability insurance covers the people in the vehicles around you or the people who are walking and biking on the roads next to you.

This type of insurance helps cover the cost of damages and injuries to all of the people who were hurt in the crash, including the people who were in the other vehicles around you. This coverage will save you financially if you are found at fault in a traffic accident.

Below, you can see the cost of liability minimum coverage compared to full coverage. Full coverage is liability insurance combined with collision and comprehensive insurance.

Insurance Company	Minimum Coverage	Full Coverage
	$63	$161
	$52	$113
	$47	$125
	$38	$84
	$52	$137
	$37	$95
	$43	$98
	$41	$100
	$46	$109
	$38	$101

Liability insurance is required in almost every state. The amount of liability insurance you are required to purchase by law depends on where you live. In most states, the minimum liability insurance required range from $10,000 to $25,000 for each vehicle damaged or person injured in an accident.

Collision Insurance

Collision insurance is an important coverage that isn’t required by states, but is required by lenders for leased vehicles. It pays for damages to your car in the event of an accident, regardless of who is at fault.

The insurance you invest in for collision coverage will pay for the cost of repairing your vehicle after an accident. Maybe you’re not the world’s greatest driver and made a mistake, or maybe someone else was driving recklessly and crashed into you.

Read More: Best Car Insurance Companies for Collision Coverage

Either way, collision coverage can help you get back on the road without breaking the bank. Collision coverage can also be helpful when dealing with difficult insurance companies or delays in the claim process.

If the other driver’s insurance company is not responding or someone involved in the crash is not cooperating, your collision coverage can help streamline the repair process for your vehicle. You may have to pay your deductible, but your insurance company will take care of the rest and fight on your behalf.

Comprehensive Insurance

Comprehensive coverage is a type of car insurance that many people buy in conjunction with collision coverage. They make a perfect team. Comprehensive insurance gives you financial protection in the event of theft, vandalism, and other non-collision incidents.

Learn More: Best Auto Insurance Companies for Comprehensive Coverage

Comprehensive coverage is like a superhero that protects your vehicle from harm including natural disasters or other unforeseen events. It’s like having a bodyguard that is always watching out for your beloved car.

Here’s an example: let’s say a big thunderstorm rolls in and damages your parked car with hail. No one is to blame for those dents on your vehicle, but you will be stuck paying for the repairs unless you have comprehensive coverage.

If you have comprehensive coverage, your insurance company will pay for the damage caused by hail or other weather disasters. Comprehensive coverage also covers theft. Let’s say your car is safely parked in your driveway or on the side of the road, and someone steals your catalytic converter.

Most people don’t think it could happen to them…until it does. According to the National Insurance Crime Bureau, the number of reported catalytic converter thefts increased from 1,300 in 2018 to more than 52,000 just three years later.

With comprehensive coverage, you can file a claim with your insurance company, and they will reimburse you for stolen vehicle parts.

Uninsured/Underinsured Motorist Coverage

Did you know that 12.6% of drivers in the U.S. are uninsured? That’s roughly one out of every eight people driving on the road. If you live in a state with a high number of uninsured drivers, having uninsured or underinsured motorist insurance could save you from paying a shocking amount of out-of-pocket expenses that could ultimately bankrupt you.

Uninsured motorist (UM) or underinsured motorist (UIM) coverage are types of insurance that can be added to your standard auto insurance policy (Read More: Best Uninsured and Underinsured Motorist (UM/UIM) Coverage). Keep in mind that 20 states require some form of UM or UIM coverage. Take a look at which states require UM or UIM coverage.

These types of coverage kick in if you’re involved in an accident with a driver who is found to be at fault for a crash but doesn’t have insurance or doesn’t have enough insurance. UM and UIM will cover the damage to your vehicle and the injuries sustained by you and the passengers who may have been in your car during the accident.

They will also pay for medical bills, vehicle repairs, and other expenses related to an accident involving a driver without adequate insurance.

Personal Injury Protection (PIP)

Personal injury protection is required in some states. It provides extra medical coverage for you and your passengers in an accident (Learn More: Personal Injury Protection (PIP) and Medical Coverage that Your Car Insurance Policy will Pay For).

PIP also helps cover the cost of lost wages if you are unable to work after an accident due to injuries. It may also help cover essential expenses that you are unable to perform, such as childcare.

Medical Payments (MedPay)

Medical payments insurance is required in some states. MedPay insurance covers medical expenses for you and your passengers in the event of an accident, regardless of who is at fault.

Learn More: Will state car insurance companies cover my medical bills resulting from an accident?

This policy covers expenses for ambulance rides, hospital stays, physical therapy, MRIs, CAT scans, and medical bills related to injuries sustained in an accident. It does not help cover lost wages or essential expenses like PIP does.

Gap Insurance

Another important type of coverage is gap insurance. This is not a mandatory coverage, but it can be valuable coverage for new car owners.

Gap insurance covers the “gap” between what you owe on your car and its value if it’s totaled in a crash. It is often cheap to add gap insurance to your existing policy, with rates starting at $12 per month.

Insurance Company	Monthly Rates
	$15
	$12
	$13
	$14
	$15
	$16
	$13
	$14

Choosing the best gap insurance coverage can be especially important if you have a newer car that quickly loses value or a large car loan balance.

Other Common Car Insurance Types

There are a few other common car insurance types that your auto insurance provider may offer. These coverages are optional, but they may be nice to have for some drivers.

• Glass Coverage: Replaces or repairs chipped or shattered glass, such as windshields (Learn More: Does my auto insurance cover broken windows?).
• Rental Car Reimbursement: Covers or helps cover the cost of a rental car while yours is being repaired after a claim.
• Roadside Assistance: Provides help with tows or quick fixes of flat tires, dead batteries, and more.

Not all insurance companies will offer every add-on. You will have to check the list of coverages offered at your insurance company to see what other common coverages they offer besides the basics.

How to Know What Car Insurance Coverage You Need

Most states require drivers to carry at least some amount of car insurance to drive a vehicle legally. Regardless of the requirements in your area, we strongly suggest you buy at least the minimum liability car insurance coverage.

To ensure the most comprehensive protection for yourself and your vehicle, a full coverage policy is your best option. If you have a lease or loan on your vehicle, you will be required to carry full coverage insurance.

Full coverage car insurance is like having a safety net that catches you in case anything goes wrong while you’re on the road or even just parked on the side of the road.

This type of coverage offers full protection, as the name implies. It combines liability, collision, and comprehensive coverage into one package, offering you the most protection for your vehicle.

Full coverage is the best choice for those who want maximum protection and peace of mind on the road. Yes, it will be more expensive than just buying minimum coverage, but the investment will pay off in the event of a crash, theft, or natural disaster.

However, you may opt to carry less insurance if you are on a budget, or your vehicle value is low (Read More: How much insurance coverage do I need?).

If you rarely drive and are a safe driver, you may be able to get a deal on full coverage insurance by applying for low-mileage and safe driver discounts.

Shopping around for quotes will also help you get the coverage you want at an affordable price. Compare rates today by entering your ZIP in our free quote tool.