If you're shopping for auto insurance, now is a good time to understand the types of car insurance coverage available. You don't want to learn later that you didn't buy the right car insurance when you need to make a claim.

To start off, let's take a look at one of the most important coverage types: Liability.

  • Liability insurance pays for damage and injuries you cause to others. It's required in all states except New Hampshire. But even New Hampshire, drivers are wise to buy liability insurance in case they cause an accident.
  • But liability insurance doesn't pay for any damage to your own car. To get that coverage, take a look at collision and comprehensive coverage.
  • Liability insurance also doesn't pay for any injuries to you or your passengers if you cause the accident. If someone crashes into you and causes injuries, you can make a claim against their liability insurance. But not all accidents are like that. You could cause an accident that injures you or your passengers. To cover that, take a look at personal injury protection (PIP) or medical payments (MedPay). These pay for injuries no matter who caused the accident. Availability of varies by state, and amounts of coverage available can be small. Some states require PIP.

Your state may also require uninsured motorist (UM) coverage. This type pays for injuries to you and your passengers if you're hit by someone who does not have liability insurance. Even though liability insurance is required almost everywhere, plenty of people drive around without it. The Insurance Research Council estimates that about 13% of drivers nationwide are uninsured. In Florida about 27% of drivers are uninsured.

A related coverage type is underinsured motorist (UIM) coverage. This helps pay for injuries to you and your passengers if you're hit by someone who has some liability but not enough for your medical bills. It's often packaged with UM coverage and you may see it written as UM/UIM.

Summary: Types of car insurance coverage

What it covers Liability Collision & Comprehensive Uninsured/underinsured motorist PIP or MedPay
Property damage you cause to others
     
Injuries you cause to others
     
Damage to your own car  
   
Your injuries from an uninsured driver    
Your injuries no matter who was at fault      

Types of car insurance FAQ

What is "full coverage"?

Full coverage car insurance generally means that you have liability, collision and comprehensive insurance.

Collision insurance and comprehensive pay out if your vehicle is stolen, or if it's damaged or totaled due to problems such as:

  • Hitting another car or object, such as a fence or sign post.
  • Floods.
  • Hail.
  • Fire.
  • Vandalism.
  • Falling objects like tree branches.
  • Crashes with animals like deer.

What is no-fault insurance?

Some states use a no-fault insurance system, which means you'll make a claim on your own insurance if you have minor injuries from a car accident. You can sue an at-fault driver if you have more severe injuries, and those are defined by the states. For example, some states let you sue the other driver if you have a permanent injury or permanent disfigurement.

What car insurance does my state require?

Each state decides the different types of auto insurance that car owners must buy in order to legally drive. These are typically combinations of liability, uninsured motorist and PIP. No states require collision or comprehensive insurance, although if you have a car loan or lease the lender or leasor likely requires both.

Each state also decides its own penalties for driving without insurance.