A car insurance policy is a bundle of separate coverages. Knowing what each one does helps you choose the right limits and avoid paying for things you don't need.
Liability coverage
Pays for injuries and damage you cause to others. Most states require a minimum amount. It's usually shown as three numbers, such as 50/100/50: bodily injury per person, bodily injury per accident, and property damage, in thousands of dollars. State minimums are often low compared with the cost of a serious accident.
Collision
Pays to repair or replace your car after a crash, regardless of fault, minus your deductible. Usually required if you lease or have a loan.
Comprehensive
Covers damage from things other than collisions, such as theft, hail, fire, flood, vandalism or hitting an animal, minus your deductible.
Uninsured and underinsured motorist
Protects you if the at-fault driver has no insurance or not enough. Some states require it.
Medical payments and personal injury protection
Helps pay medical bills for you and your passengers. Personal injury protection (PIP) is required in no-fault states and can also cover lost wages.
Optional add-ons
- Rental reimbursement
- Roadside assistance
- Gap coverage for a loan balance that's higher than the car's value
- New-car replacement
Choosing limits and deductibles
A higher deductible lowers your premium but means more out of pocket per claim, so keep your deductible within your emergency fund. Higher liability limits protect your savings and future income if you cause a serious accident.
General information only, not insurance advice and not a recommendation of any insurer or policy. Coverage rules and prices vary by state and by insurer, so confirm details with a licensed agent or your state insurance department.