If you remember three things
- Liability pays for the damage you cause to other people. It never fixes your own car.
- Collision and comprehensive fix your car. Collision covers crashes; comprehensive covers almost everything else, like theft, hail and deer.
- Uninsured motorist coverage matters because about 1 in 7 drivers (15.4%) had no insurance in 2023, according to the Insurance Research Council.
In this article
Read your limits like a pro
- 50/100/50 means $50,000 per injured person, $100,000 for all injuries in one crash and $50,000 for property damage
- A deductible is what you pay before collision or comprehensive pays
- 15.4% of US drivers were uninsured in 2023, and about 1 in 3 were uninsured or underinsured (Insurance Research Council, 2025)
Your limits and deductibles are listed on your policy's declarations page.
There are six main types of auto insurance coverage, and every policy is really a bundle of them, each with its own job and its own limit. Most people only find out which ones they have after something goes wrong.
Let's fix that before anything goes wrong.
One bad Tuesday: who pays for what
A rainy commute goes wrong
Sam slides through a red light and hits Dana's SUV. Dana hurts her wrist. Sam's own bumper is crushed, and his passenger needs stitches.
That evening, while Sam's car sits at the repair shop, a hailstorm cracks its windshield.
One accident, one storm, five different bills. Here is how a typical policy splits them.
Illustrative example. Names and numbers are made up to show how it works.
| The bill | Coverage that pays | Paid from Sam's policy? |
|---|---|---|
| Dana's SUV repairs | Property damage liability | Yes, up to his limit |
| Dana's wrist treatment | Bodily injury liability | Yes, up to his limit |
| Sam's crushed bumper | Collision | Yes, minus his deductible |
| Hail damage at the shop | Comprehensive | Yes, minus his deductible |
| Passenger's stitches | PIP or medical payments, plus health insurance | Depends on his state and options |
If Sam had bought liability only, the last three bills would have been his to pay.
Liability: your protection against everyone else
Liability is the part almost every state requires. It has two halves. Bodily injury liability covers other people's medical bills, lost wages and legal claims when you are at fault. Property damage liability covers their car and anything else you hit, from a mailbox to a storefront.
Limits are written as three numbers, like 50/100/50: $50,000 per injured person, $100,000 for all injuries in one accident and $50,000 for property damage. Anything above those limits can come out of your pocket.
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SponsoredCollision vs. comprehensive
Collision
- Your car hits another car or an object
- Rollovers
- Pays no matter who is at fault
- You pay the deductible first
Comprehensive
- Theft and vandalism
- Hail, flood, fire, falling trees
- Hitting a deer or other animal
- Also has a deductible
Both pay up to your car's actual cash value. If repairs would cost more than that, the insurer usually declares the car a total loss and pays its value minus your deductible.
Coverage for when the other driver can't pay
Uninsured and underinsured motorist coverage pays for your injuries, and in some states your car, when the at-fault driver has no insurance or not enough. The Insurance Research Council found that 15.4% of drivers were uninsured in 2023, and about one in three were uninsured or underinsured. Many states require this coverage, and most others make insurers offer it.
drivers on the road had no insurance in 2023.
PIP and MedPay: medical bills, whoever is at fault
Personal injury protection (PIP) pays medical bills, and often lost wages, for you and your passengers no matter who caused the crash. No-fault states such as Florida, Michigan, New York and New Jersey require it. Medical payments coverage (MedPay) is a lighter version that usually covers medical bills only, with lower limits.
Check what coverage costs where you live
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Optional auto insurance coverage add-ons
- β Gap insurance: owe more on your loan than the car is worth? It covers the difference if the car is totaled.
- β Rental reimbursement: pays for a rental while your car is in the shop after a covered claim.
- β Roadside assistance: towing, jump-starts, flat tires and lockouts.
- β New car replacement: replaces a totaled new car with a new one instead of its depreciated value.
- β Rideshare coverage: fills the gap personal policies leave when you drive for Uber or Lyft.
Which auto insurance coverage do you need?
Tick each one that applies to you
The state minimum is legal, but a serious crash can blow past a $25,000 or $50,000 limit fast, and you are on the hook for the rest.
Frequently asked questions
What is the difference between collision and comprehensive?
Collision pays for damage to your car from crashing into a vehicle or object. Comprehensive pays for non-crash damage such as theft, hail, flooding, fire, vandalism or hitting an animal.
What does full coverage mean?
Full coverage is not an official term. It usually means a policy with liability, collision and comprehensive. Lenders typically require it on financed and leased cars.
Does auto insurance follow the car or the driver?
In most cases coverage follows the car. If you lend your car to a friend, your policy is usually the primary coverage, and their policy may pay after yours is used up.
Do I need uninsured motorist coverage?
It is required in many states and strongly worth considering elsewhere, since about one in seven drivers was uninsured in 2023, according to the Insurance Research Council.
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