Car insurance is required by state law.
There are four main types of car insurance: comprehensive, collision, and liability. Full coverage is a combination of the three.
The minimum coverage requirements for liability insurance vary by state, but if you finance or lease your car, your lender probably requires comprehensive and collision coverage.
Liability Insurance | Collision Insurance | Comprehensive | Full Coverage |
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A combination of liability, collision, and comprehensive coverage |
What does liability car insurance cover
Liability car insurance is what most people are familiar with because it is required by state law. If you’re involved in an accident, liability insurance covers damage you cause to the other vehicle, driver, and passengers.
Liability insurance does not cover damage to you or your vehicle, only damage you cause to others or their vehicle. Coverage for your vehicle requires comprehensive, collision, or full coverage.
The two main components of liability insurance are bodily injury (BI) and property damage (PD), which most states require. Liability insurance also includes uninsured motorist (UM) and underinsured motorist (UIM) coverage, to protect you when an at-fault driver hits you and they have no coverage, or not enough coverage. Some states also require uninsured and underinsured motorist coverage.
Coverage minimums for liability insurance are usually listed with numbers and slashes. For example, a 25/50/10 policy would cover up to $25,000 of injury protection for each person involved in an accident, up to $50,000 worth of injuries per incident, and up to $10,000 of property damage per incident.
Liability Type | Coverage Provided |
Bodily Injury (BI) | Injury you cause to others, including medical expenses, lost wages, and funeral expenses |
Property Damage (PD) | Damage you cause to others’ vehicle or property |
Uninsured Motorist (UM) | Protects you when an at-fault driver hits you with no insurance |
Underinsured Motorist (UIM) | Protects you when an at-fault driver hits you with not enough coverage |
Other types of car insurance: comprehensive, collision, and full coverage
Comprehensive coverage replaces or repairs your vehicle if it’s stolen or damaged. Comprehensive coverage typically covers damage from theft, fire, vandalism, or falling objects like a tree. However, it does not cover accidents, collisions, or liability for injuries.
Collision insurance repairs your car if it’s damaged in a collision with another vehicle or object. Car accidents are usually when collision coverage is involved. It does not cover damage from theft, fire, vandalism, natural disaster, or liability for injuries.
If you finance or lease your car, your lender probably requires comprehensive and collision coverage. However, full coverage would be an even better option if you need comprehensive and collision coverage.
Full coverage is a combination of liability, comprehensive, and collision insurance.
Damage | Comprehensive | Collision | Liability* | Full |
Theft | Yes | No | No | Yes |
Vandalism | Yes | No | No | Yes |
Fire | Yes | No | No | Yes |
Natural Disaster | Yes | No | No | Yes |
Falling objects (tree) | Yes | No | No | Yes |
Animal damage | Yes | No | No | Yes |
Collision/accident | No | Yes | No | Yes |
Rollover | No | Yes | No | Yes |
Bodily injury (BI)/medical bills | No | No | Yes | Yes |
Physical damage | No | No | Yes | Yes |
Property damage (PD) | No | No | Yes | Yes |
Uninsured motorist (UM/UIM) | No | No | Yes | Yes |
*Most states require some type of liability coverage
How much does car coverage insurance cost
Your annual car insurance premium will be based on several factors, including the type of vehicle, your location, mileage, and driving record. In some states, your age and credit score are also considered.