Updated: January 2022
It’s easy to get overwhelmed when buying car insurance. Being insured is all about mitigating risk, but it’s impossible to know exactly how much you need or what types of coverage you should opt for. While we can’t tell you exactly what your policy should look like, here are some brief descriptions of the major types of car insurance you’re most likely to hear about:
Full coverage car insurance is typically defined as a policy that includes the three following types of coverage: liability coverage, comprehensive coverage, and collision coverage. By having a policy with all of these included, you’ll be protected in a variety of circumstances.
As mentioned already, liability coverage is one part of full coverage. Liability covers the other party in the event that you are at fault in an accident -- it consists of bodily injury liability coverage and property damage liability coverage. In many states, liability is the base requirement for state minimum insurance.
Also known as no-fault coverage, personal injury protection (PIP) will cover your medical expenses if you are injured in an accident. PIP does not take into account fault. Along with medical costs, lost wages and household support may also be covered under qualifying circumstances.
Medical payments, or MedPay, is similar to PIP in that it covers your medical expenses in the event of an accident, regardless of fault. You’ll be covered whether you are driving yourself or you are a passenger in someone else’s car. Unlike PIP, MedPay does not extend to covering lost wages. It is typically available in states that do not offer PIP as an insurance option.
Uninsured/underinsured coverage (UM) provides coverage if the other party is at fault but does not have enough insurance to cover the costs of the damages you’ve suffered in the accident. As there is no way to guarantee that all drivers are insured or have enough insurance, UM is a safety net that can offer added protection against the unexpected financial pitfalls that a car accident can bring.
While the above coverage types can all be helpful in the event of an accident, most states do have state minimum insurance requirements for car insurance, meaning drivers are not obligated to purchase above this minimum. These requirements vary from state to state, with most requiring some amount of liability coverage. The state minimum is typically the cheapest option when it comes to insurance, though it comes at the price of less protection in the event of an accident.
The types of car insurance you purchase and the amounts you purchase them for are entirely up to you, so long as you meet the legal requirements of your state. We recommend that drivers familiarize themselves with all the coverage options available so they can make an informed decision when purchasing car insurance. Once you’ve learned about what’s available, we suggest comparing quotes from multiple providers on our site and going from there.
Whatever type of coverage you’re looking for, start with us today and save up to $744*/year on car insurance. Fill in your zip code and we’ll do the rest!