Types of Auto Insurance (2024)
Most states require liability insurance, though you may need other types of auto insurance. For example, drivers with auto loans must carry full coverage, averaging $119/mo, though rates vary by the different types of car insurance companies. We'll go over a list of auto insurance coverages explained below.
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Kristen Gryglik
Licensed Insurance Agent
Kristen is a licensed insurance agent working in the greater Boston area. She has over 20 years of experience counseling individuals and businesses on which insurance policies best fit their needs and budgets. She knows everyone has their own unique needs and circumstances, and she is passionate about counseling others on which policy is right for them. Licensed in Massachusetts, New Hampshire,...
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UPDATED: Sep 4, 2024
It’s all about you. We want to help you make the right coverage choices.
Advertiser Disclosure: We strive to help you make confident auto insurance decisions. Comparison shopping should be easy. We are not affiliated with any one auto insurance provider and cannot guarantee quotes from any single provider. Our partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.
Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.
UPDATED: Sep 4, 2024
It’s all about you. We want to help you make the right coverage choices.
Advertiser Disclosure: We strive to help you make confident auto insurance decisions. Comparison shopping should be easy. We are not affiliated with any one auto insurance provider and cannot guarantee quotes from any single provider. Our partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.
On This Page
When purchasing a car insurance policy, picking and choosing the types of auto insurance coverage you need from the best auto insurance companies can be overwhelming. Not having enough coverage can result in high out-of-pocket costs, while having unnecessary auto insurance coverage types means paying higher rates.
While states require drivers to carry some coverages, other coverages, such as full coverage auto insurance, are optional, and the states leave it up to drivers whether they want extra coverage. Since each coverage is different in what it protects against, drivers should read up on each before deciding.
To help you find the cheap auto insurance types you need, we’ll go over each type of car insurance coverage in detail and explain what car insurance does.
- Drivers must carry their state’s required minimum amount of liability insurance
- Drivers who have loans or leases on their car will need collision and comprehensive coverages
- Most insurance companies offer multiple add-on coverages for customers
Most Common Types of Auto Insurance Coverage Explained
Auto insurance protects drivers by paying the bills for accidents so drivers don’t end up in debt. Car insurance rates vary from state to state and company to company. On top of that, your car insurance rate can be affected by various factors like age, driving history, and even your credit rating.
Take a look at the chart below to see average rates for full coverage auto insurance in your state:
Full Coverage Auto Insurance Average Rates by State
| State | Monthly Rates |
|---|---|
| Alabama | $105 |
| Alaska | $103 |
| Arizona | $112 |
| Arkansas | $116 |
| California | $140 |
| Colorado | $115 |
| Connecticut | $123 |
| Delaware | $156 |
| Florida | $142 |
| Georgia | $132 |
| Hawaii | $83 |
| Idaho | $77 |
| Illinois | $92 |
| Indiana | $92 |
| Iowa | $86 |
| Kansas | $111 |
| Kentucky | $145 |
| Louisiana | $173 |
| Maine | $80 |
| Maryland | $129 |
| Massachusetts | $101 |
| Michigan | $238 |
| Minnesota | $124 |
| Mississippi | $105 |
| Missouri | $102 |
| Montana | $107 |
| Nebraska | $104 |
| Nevada | $114 |
| New Hampshire | $86 |
| New Jersey | $138 |
| New Mexico | $105 |
| New York | $138 |
| North Carolina | $86 |
| North Dakota | $124 |
| Ohio | $82 |
| Oklahoma | $118 |
| Oregon | $102 |
| Pennsylvania | $112 |
| Rhode Island | $143 |
| South Carolina | $117 |
| South Dakota | $109 |
| Tennessee | $102 |
| Texas | $133 |
| Utah | $96 |
| Vermont | $93 |
| Virginia | $81 |
| Washington | $80 |
| Washington D.C. | $129 |
| West Virginia | $116 |
| Wisconsin | $94 |
| Wyoming | $104 |
Every insurance company differs in what coverages they offer. Still, most auto insurance companies will offer the following types of car insurance coverage because either states or lenders require them.
Liability Auto Insurance
Liability auto insurance is an important insurance coverage for drivers and one of the most affordable types of auto insurance. The two types of auto insurance coverages within liability insurance include bodily injury liability and property damage liability.
If you cause an at-fault accident, property damage liability insurance pays for the other parties’ damages. On the other hand, bodily injury liability auto insurance pays if the other driver or passengers are injured, and property damage liability pays for the other driver’s vehicle repairs or property damages, such as a broken mailbox.
Keep in mind that there are no liability auto insurance types that cover your accident costs. Almost every state requires drivers to carry this insurance so other parties’ costs get paid if a driver causes an accident.
Liability insurance stands as the most basic legal requirement for insurance coverage. To enhance your protection, opting for full coverage is advisable, albeit it comes with higher costs. Below, we’ll examine the average monthly minimum rates in contrast to full coverage rates among several leading U.S. auto insurance companies, keeping in mind the necessity for instacart proof of insurance.
Read on to learn more about the available add-on auto insurance coverage types.
Collision Auto Insurance
Unlike liability insurance, states don’t require collision insurance for drivers. However, drivers who have a loan or lease on their vehicle usually must carry collision insurance on their cars, according to car insurance org.
Collision auto insurance pays for vehicle damages if a driver crashes in the following situations:
- They hit another vehicle.
- They hit a stationary object, such as a fence.
Even if your lender doesn’t require collision, you should consider adding collision coverage to their policy to help pay for repairs or a new car if it gets totaled.
Comprehensive Auto Insurance
Similar to collision insurance, lenders may require drivers to carry comprehensive auto insurance on their vehicles, even though states don’t require it. Comprehensive insurance covers drivers in the following types of incidents:
- Collision with an animal
- Damages from weather, such as a hurricane or hailstorm
- Damages from falling objects, such as a tree falling on your car
- Damages from vandalism or theft
Once more, individuals unable to afford repairs or vehicle replacements should consider adding comprehensive coverage to their policies for the best auto insurance in Utah.
Personal Injury Protection Auto Insurance
Personal injury protection auto insurance, or PIP insurance, is required in a handful of states but is optional in most of the U.S. If you get in an accident, PIP covers your and your passengers’ medical costs, including emergency medical treatment bills, lost wages, or funeral costs.
Even if you aren’t required in your state to carry PIP, it’s worth buying if you can afford to add it to your insurance policy unless you have great health insurance. Even then, PIP covers things that health insurance doesn’t, such as lost wages from injuries.
Underinsured/Uninsured Motorist Insurance
Less than half of U.S. states require drivers to carry underinsured/ uninsured motorist insurance, which pays for your accident costs if the at-fault driver has inadequate or no coverage to pay your bills.
Does car insurance cover a hit-and-run? If the driver doesn’t have insurance, they may hit and run, meaning you’ll need extra protection. If you don’t have collision or comprehensive auto insurance, consider adding underinsured/uninsured motorist coverage to your insurance policy in case another driver can’t pay your bills after crashing into you.
Learn about the best underinsured motorist coverage auto insurance companies.
Medical Payments Insurance
Medical payments insurance, also known as MedPay, is required in Maine and New Hampshire. MedPay pays for you and your passenger’s medical bills if you are in an accident.
It’s more limited than PIP coverage, as it won’t pay for lost wages or funeral costs. However, if you want extra medical coverage, you may want to add MedPay to your insurance plan. Learn more about whether you need medical payment coverage on auto insurance.
SR-22 Auto Insurance
Some states may require drivers to file for high-risk auto insurance, also known as SR-22 insurance, if they have a DUI or other incidents on their record. You may have to shop around for cheap SR-22 auto insurance because not all insurance companies provide it.
Drivers who have to file for SR-22 coverage can expect rates to be higher than average as they’re considered high-risk drivers. Read more about how to find the best auto insurance for drivers with a bad driving record.
Non-Owner Auto Insurance
Drivers who don’t own their own car will have to purchase non-owner auto insurance. Non-owner insurance provides liability insurance if you crash a car, so the other parties’ bills will be paid.
However, non-owner insurance won’t cover the damages to the driver’s car — that will be up to the vehicle owner’s insurance. Your medical bills also won’t be covered under non-owner insurance.
The good news is that even though non-owner car insurance isn’t as comprehensive as owned car insurance, it’s usually cheaper than purchasing a regular auto insurance policy.
Rideshare Auto Insurance
If you drive for rideshare companies like Uber or Lyft, your regular auto insurance won’t cover you. States require all drivers to be insured to drive legally, so you must purchase rideshare auto insurance to transport customers legally.
Not all insurance companies sell rideshare insurance, so you may have to shop around to find a policy.
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Other Types of Auto Insurance Coverages
Unlike the most common types of auto insurance, the following coverages are completely optional, no matter what state you live in. Not all insurance companies offer them. Look at them below to see how auto insurance works with these add-on coverages.
Classic Car Coverage
Generally, insurance companies consider cars classic if they’re at least 25 years old. Classic car auto insurance is similar to a standard car insurance policy with liability, collision, and comprehensive bundles, but it’s cheaper than regular auto insurance. The reason it’s more affordable is because classic cars only get driven for occasional pleasure drivers. So, you’ll need a standard auto insurance policy if you use your classic car regularly.
Emergency Roadside Assistance Coverage
Some insurance companies offer optional emergency roadside assistance coverage. The best roadside assistance coverage helps with all of the following:
- Dead batteries
- Empty gas tank
- Flat tires
- Locked out of the car
- Tows
If you have an older car prone to breaking down, then adding roadside assistance to your plan can save you money in the long run.
Gap Insurance
All cars start losing value as soon as they leave the lot. If you have a loan or lease and total your car, the amount your auto insurance pays you will be based on your car’s actual cash value.
This depreciated amount can be significantly less than the amount left on your car’s loan or lease — this is where gap coverage comes in. Gap insurance pays the difference between the depreciated actual cash value and the amount left on your loan or lease.
Mechanical Breakdown Coverage
Mechanical breakdown insurance will pay for car repair costs if mechanical parts in your car break down, such as your engine or transmission, and is similar to extended warranty coverage.
Typically, insurance companies won’t sell mechanical breakdown coverage for old cars or cars with a high number of miles on them, as these types of cars are more prone to breaking down.
Modified Auto Coverage
Some auto insurance companies offer modified car coverage to drivers who have made expensive car modifications, such as a custom paint job or a new sound system. Without modified car insurance, the cost of modifications won’t be covered if the modifications are damaged in an accident. Learn about the best auto insurance companies that insure modified cars.
New Car Replacement Coverage
Only cars that are no more than a few years old can qualify for new car replacement coverage. If you total your car, new car replacement coverage will pay for a new car of the same make and model as your totaled car. What cars will qualify for this coverage depends upon the insurance company.
Rental Reimbursement Coverage
If your car is in the shop getting repaired under a covered loss, then rental car reimbursement will pay for your rental car until your car is fixed.
Keep in mind that what kind of rental car insurance companies will pay for and how long they will pay for the rental car depends upon the company.
Umbrella Coverage
Umbrella coverage is extra liability insurance if you cause an accident in which costs exceed your basic coverage limits. It will also help pay for costs if you are sued after an accident. How much umbrella coverage covers depends on the policy and company.
Usage-Based Auto Insurance Coverage
Usage-based auto insurance may be offered by some insurance companies. Drivers pay a daily rate and then pay a small fee based on how much they drive. Some insurance companies may also offer usage-based programs where drivers let the company track their driving data and then earn discounts.
Overlooked Auto Insurance Coverage Options That Could Save You Money
While most drivers are familiar with standard auto insurance coverages, there are several lesser-known auto insurance options that could provide significant benefits:
- Non-Owned Auto Insurance: Ideal for individuals who frequently rent cars or borrow vehicles from friends or family, non-owned auto insurance provides liability coverage that kicks in before the vehicle owner’s policy. This is especially useful for people who don’t own a car but want financial protection when driving.
- OEM Endorsement: An Original Equipment Manufacturer (OEM) endorsement ensures that if your car needs repairs after an accident, it will be fixed using new parts from the original manufacturer, not aftermarket parts. This can be particularly valuable for newer, luxury, or high-performance vehicles where maintaining quality is crucial.
- Full Glass Coverage: Often available as an add-on, full glass coverage protects against windshield and window damage, which can be common and costly. Some policies offer this without a deductible, making glass repairs or replacements more accessible and affordable.
More About Common Types of Auto Insurance Coverage
All drivers are required to carry liability insurance, no matter where they live. However, most other coverages are optional, leaving it up to the driver to decide what types of auto insurance coverage they want to carry.
So, what does car insurance do? Liability coverage pays for other drivers’ costs in an accident you caused, and most U.S. states’ auto insurance laws require it. On the other hand, collision and comprehensive auto insurance policies cover your vehicle damages and medical expenses.
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Frequently Asked Questions
What are the three types of car insurance?
The three primary types of car insurances commonly mandated by most states and lenders are liability, collision, and comprehensive auto insurance. These essential types of car insurance policies represent the most common auto insurance coverage options.
What are the two types of liability auto insurance coverages?
The two different liability auto insurance types are bodily injury and property damage liability auto insurance.
What is a full coverage policy?
Typically, a full coverage auto insurance policy includes liability insurance, collision insurance, and comprehensive insurance. For comprehensive protection, drivers can also add Personal Injury Protection (PIP) or Medical Payments (MedPay). This combination covers various types of insurance for cars, ensuring that different types of automobile insurance and types of insurance coverage are included.
What is the one type of auto insurance everyone must carry?
Liability insurance is among the most cost-effective insurance auto options that every driver is required to have. In the event that a driver is responsible for causing harm to another person or vehicle, this type of insurance covers the damages incurred by the other party. This is a prime example of the different types of auto insurance available.
Is full coverage the same as comprehensive insurance?
No, they are not the same. Full coverage refers to a policy that includes liability, collision, and comprehensive coverages, representing different car insurance levels. On the other hand, comprehensive insurance is a specific type of coverage that addresses damages caused by animals, weather, vandalism, and other incidents. These illustrate examples of the three types of auto insurance.
What is collision coverage?
Collision coverage takes care of the repair costs for your vehicle if you collide with another car or a stationary object, like a mailbox. Drivers who finance or lease their cars are required to have this coverage. When exploring car insurance choices, understanding collision coverage is essential. It’s one of the automobile insurance examples that illustrates the five types of vehicle insurance.
Is it worth it to carry comprehensive coverage on an older car?
The general guideline is that if the yearly expense of comprehensive coverage matches your car’s total value over a few years, it’s advisable to skip comprehensive insurance. Otherwise, you might pay the equivalent of your car’s worth in coverage fees within a few years. This applies to all car insurance cover types, including auto insurance for young adults. Understanding auto insurance policies explained in different auto insurance tiers can help in making this decision.
What is recommended for car insurance coverage?
We suggest that most drivers opt for a full coverage insurance policy, which includes essential vehicle insurance coverage types such as liability, comprehensive, and collision auto insurance. For the best rates, check out autoinsurancequotes.com and cheapautoinsurance.org for cheap car insurance options.
What is the difference between collision and comprehensive auto insurance?
Collision insurance is among the cheapest car insurance in Michigan, providing coverage when you hit another vehicle. On the other hand, comprehensive insurance, which is also part of the most common car insurance coverage, protects against damages from incidents like hitting an animal or weather-related events. To find the cheapest quotes for car insurance, including options from USAA, consider looking up their MBI number for detailed information.
Is buying more than minimum coverage insurance necessary for drivers?
If you don’t have an older car with low value, it’s advisable to get full coverage auto insurance. Safeco auto insurance coverage levels provide better protection than minimum coverage, which only pays for the other driver’s repair costs after an accident, not yours. For the best type of car insurance, especially if you drive for services like Instacart, consider comprehensive coverage to ensure all potential expenses are covered.
What are the basic types of auto insurance?
The basic types of auto insurance include liability, collision, and comprehensive coverages. These foundational coverages provide protection against the most common risks drivers face.
How many types of car insurance are there?
In the realm of car insurance in the USA, the Missouri Auto Insurance Plan offers a spectrum of coverage options. These include various types of driving insurance such as liability, collision, comprehensive, PIP, uninsured/underinsured motorist, and gap insurance, each distinguished by specific car insurance codes.
What kind of auto insurance do I need?
The kinds of car insurance you need depends on several factors, including your vehicle’s value, how you use your vehicle, your financial situation, and the requirements of your state. Most drivers need at least liability insurance, but many also benefit from collision and comprehensive coverages.
How to choose auto insurance coverage?
To choose auto insurance coverage:
- Understand Your State Requirements: Know the minimum coverage required by your state.
- Evaluate Your Personal Needs: Consider factors like the value of your car, your financial situation, and your driving habits.
- Compare Quotes: Get quotes from multiple insurance providers.
- Consider Additional Coverages: Evaluate the need for additional coverages like collision, comprehensive, PIP, or roadside assistance.
- Check for Discounts: Look for available discounts and bundling options.
- Read Reviews: Check the reputation and customer service ratings of insurance companies.
What is grid level in insurance?
Grid level in insurance typically refers to a standardized rate or pricing mechanism used in some regions to ensure fair and equitable premiums, particularly for high-risk drivers. This can vary by location and specific insurance regulation frameworks.
What is uninsured motorist coverage?
Uninsured motorist coverage protects you if you’re involved in an accident with a driver who doesn’t have liability insurance or if you’re the victim of a hit-and-run. It covers medical expenses, lost wages, and other damages.
Which of the following types of automobile insurance coverage is usually required by most states?
Liability Insurance is usually required by most states.
How to choose car insurance?
To choose car insurance:
- Assess Your Needs: Determine the level of coverage you need based on your vehicle, driving habits, and financial situation.
- Research State Requirements: Ensure you meet your state’s minimum coverage requirements.
- Shop Around: Compare policies and quotes from different insurers.
- Check for Discounts: Look for discounts for safe driving, multiple policies, good grades (for students), etc.
- Review the Insurer’s Reputation: Consider customer service ratings and financial stability.
How much is 15e insurance?
The term “15e insurance” is unclear and could refer to a specific type of insurance or policy. Please provide more details for an accurate answer.
What are the types of car insurance coverage?
The types of car insurance coverage are:
- Liability Coverage
- Collision Coverage
- Comprehensive Coverage
- Personal Injury Protection (PIP)
- Underinsured/Uninsured Motorist Coverage
- Medical Payments Coverage (MedPay)
- SR-22 Coverage
- Non-Owner Coverage
- Rideshare Coverage
- Classic Car Coverage
- Emergency Roadside Assistance Coverage
- Gap Insurance
- Mechanical Breakdown Coverage
- Modified Auto Coverage
- New Car Replacement Coverage
- Rental Reimbursement Coverage
- Umbrella Coverage
- Usage-Based Coverage
How auto insurance works?
Auto insurance works by providing financial protection against physical damage and/or bodily injury resulting from traffic collisions and against liability that could also arise from incidents in a vehicle. When you pay premiums to an insurance company, they promise to pay your costs if you suffer a covered loss, such as an accident, theft, or other damage.
What are the basic types of auto insurance?
The basic types of auto insurance are:
- Liability Insurance: Covers bodily injury and property damage you cause to others.
- Collision Insurance: Covers damages to your vehicle from collisions with other vehicles or objects.
- Comprehensive Insurance: Covers damages to your vehicle from non-collision events like theft, fire, or natural disasters.
Free Auto Insurance Comparison
Enter your ZIP code below to view companies that have cheap auto insurance rates.
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Kristen Gryglik
Licensed Insurance Agent
Kristen is a licensed insurance agent working in the greater Boston area. She has over 20 years of experience counseling individuals and businesses on which insurance policies best fit their needs and budgets. She knows everyone has their own unique needs and circumstances, and she is passionate about counseling others on which policy is right for them. Licensed in Massachusetts, New Hampshire,...
Licensed Insurance Agent
Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.
