Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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Laura Walker graduated college with a BS in Criminal Justice with a minor in Political Science. She married her husband and began working in the family insurance business in 2005. She became a licensed agent and wrote P&C business focusing on personal lines insurance. Laura serviced existing business and wrote new business. She now uses her insurance background to help educate drivers about...

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Reviewed by Laura Walker
Licensed Agent for 10 Years

UPDATED: Jul 1, 2019

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Buying auto insurance may sound simple enough but choosing the right type of auto insurance takes a little bit of knowledge.

Although not as complicated as creating a nuclear fusion car you do need to know about the different types of auto insurance coverage in order to find the most affordable rates and sufficient coverage in the event of an accident.

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All states have minimum required auto insurance requirements however these are just minimum requirements to comply with law and only provide a small amount of protection in a car accident.

Drivers who just have enough auto insurance coverage to comply with the law often end up uninsured or underinsured.

What are the types of auto insurance? Auto insurance comes in several different types and each type has different premiums with different levels of coverage.

LIABILITY INSURANCE

Some form of Liability insurance is required by law and while every state has its own requirements regarding how much liability insurance you must carry it works the same wherever you live.

Liability insurance is insurance to cover damages to other people’s property and persons in an accident where you were at fault but provides NO coverage for damages to your vehicle or medical expenses for your injuries.

For example, if you only have $100,000 liability insurance and cause a car accident resulting in $20,000 damage to your own car – guess what, you are not covered. The insurance will pay for damages to the other vehicle but not yours.

Liability insurance comes in a couple different forms including bodily injury liability and property damage liability – most states require you to carry both.

COMPREHENSIVE COVERAGE

Comprehensive car insurance coverage provides insurance for damages to your vehicle resulting from losses outside of collision. For example, if a tree falls on your car, an animal decides to play chicken with it or most any other non-collision incident.

When your vehicle is damaged you can file a claim under your comprehensive car insurance and have your vehicle repairs covered, minus the policy deductible, as long as the damage is the result of an insured event.

Comprehensive car insurance is a personal choice and never required by state law however if you are financing or leasing a car the financing company will often require you obtain comprehensive insurance as part of the financing terms.

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COLLISION COVERAGE

Collision coverage is much easier to understand than other types of auto insurance. Essentially what collision coverage insures are damages resulting from a “collision” with another vehicle or object?

As long as the claim is from an insured event the car insurance company will pay to repair your vehicle damages up to your policy limits and minus the deductible.

Collision coverage may be not worth it for everyone, especially older vehicles which have little value, however for anyone with a late model car collision coverage is certainly a wise investment.

UNDERINSURED / UNINSURED MOTORIST COVERAGE

Uninsured Motorist coverage is critical to have as an extremely significant percentage of drivers are uninsured. Without this type of auto insurance, you are betting on the driver at fault to have enough auto insurance for your damages.

Sadly however almost 20% or more of drivers remain underinsured! This means you have a 1 in 5 chance of somebody hitting you and not having enough insurance to cover the damages.

Why take the risk? Uninsured Motorist Coverage provides extra protection for your household member and passengers for very affordable premiums.

Did you know hit and run accidents are often covered under the uninsured motorist coverage part of your policy? These types of accidents happen every day so never buy an auto insurance policy without understanding the benefits of adding uninsured motorist coverage.

Outside of liability, collision, comprehensive and UM/UIM coverage there are other types of auto insurance available. States with no fault auto insurance laws even have a different form of liability insurance called personal injury protection (PIP).

Some of the other types of auto insurance include:

  • Accidental Medical Protection
  • Custom Parts and Equipment Insurance
  • GAP Insurance
  • Medical Payments Coverage
  • Personal Injury Protection (PIP)
  • Property Protection Insurance
  • Rental Car Reimbursement
  • Towing and Labor Coverage
  • and more

Auto insurance is more than just a single option and you need to learn how auto insurance works well before committing to a policy.

Many of these types of auto insurance work a little different depending on where you live so never rely on any website to explain the terms of coverage but simply use the information gathered to ask a licensed insurance agent about your options.

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Related posts:

  1. What are the types of auto insurance?
  2. What is Uninsured and Underinsured auto insurance coverage?
  3. What is Uninsured Motorist or Under-Insured Motorist Coverage, and Do I Need it?
  4. How much auto insurance do you need?
  5. What is not covered under a car insurance policy?