What are the different types of car insurance?
You might be looking to build your own personalized auto coverage plan, or maybe you would like to have a little more knowledge about a necessary part of car ownership. Regardless of the circumstances, we want you to be as educated as you can be. Below is a quick overview of various car insurance coverage types:
Liability
- Covers the cost of injury to others and damage to their property when you’re at fault
- Required by law in nearly all states
Collision
- Pays to repair or replace your own vehicle when you’re at fault
- Covers collisions with other vehicles and objects
Comprehensive
- Covers damage to your car caused by things besides a collision
- Includes hail, wind, theft, fire, vandalism, animal damage and more
Uninsured / Underinsured Motorist
- Covers your losses caused by an uninsured or underinsured driver
- Helps pay for damage to your car and bodily injury to you and your passengers
Medical Payments
- Helps with the cost of medical care for you and your passengers resulting from injuries in an accident
- Provides this coverage no matter who’s at fault
Personal Injury Protection (PIP)
- Helps cover the cost of your rehabilitation and lost wages resulting from an accident
Covers you no matter who’s at fault
Towing and roadside service
- Provides 24/7 roadside assistance if your car is disabled
- Helps pay for towing, tire changing, locksmith service and jumpstarts
Rental Car Reimbursement
- Covers the cost of a renting a car for up to 30 days while yours is repaired
- Arrangements and billing can be handled by Farmers
Rideshare
- Helps protect drivers for rideshare companies like Uber and Lyft
- Provides coverage during periods not covered by company or personal insurance
Loss of Use
- Provides a flat sum for transportation while your car is repaired
- Can be used for public transit, rentals, taxis and rideshare services
Customized Equipment
- Covers the cost to repair or replace aftermarket equipment like infotainment systems and custom wheels
- Available on any vehicle with collision and comprehensive coverage
Personal Umbrella
- Provides additional liability coverage — above the limits on your auto policy
- Helps protect your assets from lawsuits
Glass Deductible Buyback
- Covers windshield and glass repair and replacement
- Low $100 deductible (the portion you pay yourself)
Full Windshield and Glass Coverage
- Offers $0 deductible on glass repair and replacement
- Pay nothing out of pocket
Spare Parts Coverage
- Covers the cost to replace spare parts you keep on hand, up to $750
- Popular choice for owners of classic and collector cars
Original Equipment Manufacturer (OEM)
- Covers the cost of using factory-original parts in covered repairs
- Available on cars up to 10 years old
New Car Replacement Coverage
- Covers the cost to replace your car with a new one of the same make and model
- Available when your car is totaled within the first two model years and 24,000 miles
Accident Forgiveness
- Farmers will forgive one at-fault accident for every three years you drive without one
- Keeps your premium from going up because of just one accident
Types Of Car Insurance Coverage
Auto insurance is made up of different coverages designed to financially protect you if you’re in an accident or your vehicle is damaged. Some types of coverage are required while others are optional and offer added protection.
Six common car insurance coverage are:
- auto liability coverage
- uninsured and underinsured motorist coverage
- comprehensive coverage
- collision coverage
- personal injury protection
Learn about what each of these coverages are and what they would cover, below.
1. Liability coverage
Auto liability coverage is mandatory in most states. Drivers are legally required to purchase at least the minimum amount of liability coverage set by state law. Liability coverage has two components:
- Bodily injury liability may help pay for costs related to another person’s injuries if you cause an accident.
- Property damage liability may help pay for damage you cause to another person’s property while driving.
Learn more: Liability insurance: How to stay protected
2. Uninsured and underinsured motorist coverage
If you’re hit by a driver who doesn’t have insurance, uninsured motorist coverage may help pay for your medical bills or, in some states, repairs to your vehicle. If you’re hit by an underinsured driver, that means they have car insurance, but their liability limits aren’t enough to cover your resulting medical bills. That’s where underinsured motorist coverage may help, depending on the laws of your state.
Uninsured and underinsured motorist coverage is required in some states and optional in other states.
Learn more: What is uninsured motorist coverage?
3. Comprehensive coverage
Comprehensive may help cover damage to your car from things like theft, fire, hail or vandalism. If your car is damaged by a covered peril, comprehensive coverage may help pay to repair or replace your vehicle (up to the vehicle’s actual cash value). This coverage has a deductible, which is the amount you’ll pay out of pocket before your insurer reimburses you for a covered claim.
Comprehensive is typically an optional coverage — but your lender may require it if you’re leasing or paying off your vehicle.
Learn more: What is comprehensive auto insurance?
4. Collision coverage
If you’re involved in an accident with another vehicle, or if you hit an object such as a fence, collision coverage may help pay to repair or replace your car (up to its actual cash value and minus your deductible).
Collision coverage is typically optional. It may be required, however, by your vehicle’s leaseholder or lender.
Learn more: What is collision insurance?
5. Medical payments coverage
If you, your passengers or family members who are driving the insured vehicle are injured in an accident, medical payments coverage may help pay for costs associated with the injuries. Covered costs may include hospital visits, surgery, X-rays and more.
Medical payments coverage is required in some states and optional in others.
Learn more: What is medical payments coverage?
6. Personal injury protection
Personal injury protection, or PIP, is only available in some states. Like medical payments coverage, PIP may help pay for your medical expenses after an accident. In addition, PIP may also help cover other expenses incurred because of your injuries — for example, childcare expenses or lost income.
Personal injury protection is required in some states and optional in other states where it’s available.
Learn more: Personal injury protection (PIP) Coverage (AKA no-fault insurance)
Other types of auto insurance coverage
You may be able to add the following optional coverages to your car insurance policy, depending on your situation. Your insurance agent can help you understand what each helps cover, so you can put together a policy that’s right for you.
- Rental reimbursement coverage / transportation expense coverage
- Gap coverage
- New car replacement coverage
- Towing and labor cost coverage
- Ride-sharing coverage
- Classic car insurance
Which type of insurance is required by law?
Except for New Hampshire, every state requires drivers to carry property damage and bodily injury liability insurance. Other coverages may be required, depending on your state. These may or may not include uninsured and underinsured motorist coverage, and PIP.
Comprehensive and collision coverage are not required by any state – but many lenders require them for vehicle financing. In those cases, they may also require gap insurance to cover the difference between what you still owe on the vehicle and its current market value.
Get the right coverage for your car
There’s no one-size-fits-all approach when it comes to car insurance. Where you live, how you drive your vehicle and the vehicle you drive can help determine the auto insurance fit for you and your wallet.
Many online quoting systems ask you questions about where you live and your driving habits to help suggest coverages worth considering. When you do shop around for auto insurance quotes, be sure to choose the same coverage for each quote so you have apples-to-apples comparisons.