10 Types of Car Insurance Every Driver Needs to Know

car interior — Do you have comprehensive and collision insurance, or just auto liability coverage? Catherine Falls Commercial / Getty Images

Understanding the different types of car insurance is crucial to getting the right coverage for your vehicle, your budget and your peace of mind.

Whether you're protecting a brand new car or a trusted old ride, the right auto insurance coverage can make all the difference after a car accident.

Here’s a breakdown of the essential car insurance types you’ll want to know when choosing or updating your car insurance policy.

Contents

Liability Insurance
Collision Coverage
Comprehensive Coverage
Uninsured and Underinsured Motorist Coverage
Medical Payments Coverage (MedPay)
Personal Injury Protection (PIP)
Gap Insurance
Rental Reimbursement Insurance
Classic Car Insurance
Rideshare Insurance

1. Liability Insurance

Liability coverage is required in most states. It includes:

Bodily injury liability coverage: Pays for medical expenses, lost income and funeral expenses of others when you're at fault.
Property damage liability: Covers repair costs to the other driver’s car or person's property.

This coverage pays up to your policy limits and offers financial protection against lawsuits.

2. Collision Coverage

Collision insurance helps cover damages to your car if it hits another vehicle or object, no matter who's at fault. If your car breaks in a crash or rolls over, collision coverage handles the repair or replacement.

3. Comprehensive Coverage

Comprehensive insurance pays for damage to your car from non-collision events like falling objects, fire, theft, or natural disasters. It’s essential for protecting against the unexpected.

4. Uninsured and Underinsured Motorist Coverage

This type of motorist coverage ensures you’re protected even when others aren’t.

Uninsured motorist coverage: Covers you if you're hit by an uninsured driver
Underinsured motorist coverage: Helps when the other driver doesn't have enough insurance to pay for your losses

5. Medical Payments Coverage (MedPay)

Medical payments coverage helps pay medical bills for you and your passengers, no matter who caused the accident. It’s often paired with other auto insurance types and can include funeral expenses.

6. Personal Injury Protection (PIP)

Similar to MedPay, personal injury protection (PIP) covers medical costs, lost wages and other expenses like childcare due to injuries from a covered accident. PIP is required in no-fault states.

7. Gap Insurance

If you owe more on your car loan than your car’s current market value, gap insurance covers the difference after a total loss. This is smart for new car owners who finance their vehicles.

8. Rental Reimbursement Insurance

Covers the cost of a rental car while your car is in the shop after an accident. This optional coverage adds convenience when you're without wheels.

9. Classic Car Insurance

Lowrider convertible car — Specialized car insurance coverage helps protect investments in vintage cars like this one. O2O Creative / Getty Images

Tailored for vintage or collector cars, classic car insurance considers the same make, condition and value instead of standard depreciation. It provides specialized auto coverage that standard policies may lack.

10. Rideshare Insurance

If you drive for companies like Uber or Lyft, rideshare insurance bridges the gap between your personal insurance policy and the insurance company's commercial coverage, offering full auto coverage during work hours.

We created this article in conjunction with AI technology, then made sure it was fact-checked and edited by a HowStuffWorks editor.