What are the 3 Types of Car Insurance Coverage?

Car insurance is required by law in almost all states in the United States. Most drivers must carry some proof of payment in case a crash occurs, so it helps to know your options. The primary three types of car insurance provided in many states are:

• Liability
• Comprehensive
• Personal injury protection

These types of car insurance must be shown when a peace officer asks or when car accidents happen to prove legal responsibility. Driving without car insurance can have severe legal and financial consequences, thus, it’s a must for all drivers to carry car insurance.

Insurance companies may not have your best interests at heart when offering a settlement. You’ll need a lawyer who can attest to your losses and demand further compensation in case your settlement isn’t enough.

If you get into a crash and don’t know which types of car insurance to call, you may need an auto attorney by your side.

Why Do You Need Car Insurance?

Not only is it mostly required by law, but car insurance also covers the rising medical and repair costs you’ll suffer from a crash. Car insurance can pay for covered damages and protects you financially if you’re liable for someone else’s injuries or damages.

If you don’t have insurance, this potentially endangers not only the other driver because no entity can pay for their damages, but also your own safety as well.

How Much Car Insurance Do You Need?

The type of car insurance you need may depend on:

• Your state
• Driving history
• Age and gender
• Your vehicle type

According to state and federal laws, liability car insurance with bodily injury coverage is necessary when operating a vehicle. Personal injury protection (PIP) may be required for some states, specifically, no-fault states where drivers must carry the state’s minimum PIP coverage.

Comprehensive coverage is not required by law and is an optional package to add to your insurance coverage. However, comprehensive coverage may be needed when leasing or financing a vehicle.

1. Liability Car Insurance

Liability car insurance is mandatory in most states, and drivers must purchase minimum liability coverage according to their state laws. This type of car insurance protects you from paying for the other drivers’ damages if you’re found at-fault.

Minimum liability car insurance covers a set amount of injury and property damages after an auto accident. According to the Insurance Information Institute, all insured vehicles carry liability insurance, but not necessarily collision or comprehensive coverage.

Liability coverage addresses two types of expenses if you’re found at-fault in an accident: bodily injury and property damage coverage.

Bodily Injury Coverage

Part of liability coverage is to pay costs related to another person’s injuries if you caused an accident. Depending on your state, bodily injury liability tends to limit victims to around $15,000 for death or injury.

Victims of car accidents may incur life-altering medical expenses, and bodily injury coverage helps compensate the other driver when such tragedies occur. Without the liability car insurance system, if you’re found at-fault for a crash, you’ll have to pay for the other driver’s injuries out-of-pocket.

Property Damage Coverage

The other half of liability insurance covers property damages, such as damaged drivers’ vehicles, road signs, fences, etc. This is required in almost all states and varies between a minimum of $5,000, to a maximum of $25,000.

2. Comprehensive Car Insurance

Comprehensive car insurance protects your vehicle from incidents outside of car crashes like natural disasters, theft, or vandalism. This type of insurance is not required by law, but can be extremely helpful when you least expect it.

Although comprehensive insurance is optional, some dealerships or car rentals require you to obtain comprehensive protection for leasing or financing a vehicle.

For example, if your vehicle was illegally tampered, your insurance company will cover your car expense at a depreciated value including your deductible. The limit to your comprehensive insurance and deductible are separate from your policy’s collision deductible and limit.

3. Personal Injury Protection

Personal injury protection (PIP), also referred to as no-fault insurance, works differently than liability or comprehensive coverage. PIP covers your medical expenses after a car accident, regardless of fault. Most no-fault states require you to carry PIP depending on their car accident laws.

Personal injury protection (PIP), also referred to as no-fault insurance, is required in most no-fault state and may cover:

• Medical costs
• Lost wages
• Medications
• Funeral expenses
• Death benefit payouts

PIP generally covers policyholders and family members in the household. They may also serve to cover passengers in the vehicle and permissible drivers.

Note that personal injury protection does not cover damage to your vehicle. This can only be covered through comprehensive coverage.

As of 2024, the PIP-required states include

• Delaware
• Florida
• Hawaii
• Kansas
• Massachusetts
• Michigan
• Minnesota
• New Jersey
• New York
• North Dakota
• Oregon
• Utah

Some states that require PIP but can be waived in writing are Maryland, Kentucky, Texas, and Washington. To learn more about your auto coverage, contact an auto accident attorney and see how much you should benefit from your auto accident.

What Does Full Coverage Car Insurance Cover?

Full car insurance coverage is a general term describing a combination of coverage plans protecting you from various aspects of a car accident. Generally, full coverage consists of three forms of car insurance:

• Liability coverage
• Comprehensive car insurance
• Collision insurance

There may be other optional benefits included in your full coverage plan, such as:

• Uninsured motorist insurance
• Personal injury protection
• Gap insurance
• Roadside assistance

Although full coverage is optional, it may provide you peace of mind knowing you’re fully covered after a crash. Even if you’re fully insured, there are still potential mistakes you can make that may negatively affect your settlement amount.

You’ll need an auto attorney to analyze your case even when insured, raising your chances of adequately covering your losses.

Additional Auto Insurance Options

Below is the list of auto insurance add-ons you may have for your vehicle which is usually provided when purchasing full coverage car insurance.

1. Uninsured and Underinsured Motorist Coverage

Some accidents may have parties that are uninsured or underinsured. This coverage helps compensate for injuries you or your passengers suffered that may have been ignored without coverage.

Uninsured and underinsured coverage is beneficial in states with a high percentage of drivers without insurance or are underinsured.

2. Medical Payments Coverage (MedPay)

Medical payment coverage is add-on protection covering you and your passengers’ medical expenses after a car accident. Medpay can also compensate your losses if you are at-fault for the crash.

Types of expenses covered by MedPay include:

• Doctor visits
• X-ray scans
• Nursing care and ambulance fees
• Funeral costs
• Surgery and rehabilitation costs

Note that MedPay isn’t offered in every state, especially when personal injury protection is an option instead. Acquire the right amount of MedPay that coincides with your health insurance coverage to adequately cover your out-of-pocket expenses.

3. Rental Reimbursement Coverage

Rental reimbursement coverage is an optional form of car insurance that covers rental car, public transportation, Uber/Lyft, or cab accidents. This form of additional coverage does not cover mechanical defects or breakages when you lease an automobile. The coverage amount varies by insurance company and a maximum number of days.

4. Ride-Sharing Coverage

Ride-share insurance protects you and your passengers for transportation services like Uber or Lyft. Ridesharing companies may include their own insurance minimums for rideshare drivers, but their minimums are limited.

Ride-sharing coverage may be beneficial if you are working in transportation services and would like to have some insurance to cover your medical expenses for you and your passengers.

Hire an Auto Accident Lawyer to Negotiate for a Higher Settlement

Hire an auto accident attorney lawyer and negotiate a higher settlement with the help of LegalASAP. Car insurance is necessary in the United States and it can be unfortunate when dealing with auto accident claims. Acquiring an auto accident lawyer can help you seek higher compensation for injuries and damages you’ve suffered.

Fill out a free quick consultation form here, and we can see if you qualify for an auto accident claim. You may contact our services by calling our 24/7 toll-free number at 888-927-3080 for questions or concerns you may have.