Car Insurance Coverage Types Explained: What You Need (2026)

Car insurance declarations page showing liability limits, collision and comprehensive deductibles

Last reviewed: September 30, 2026

Short answer: A US car insurance policy is a bundle of separate coverages. Liability pays for injuries and damage you cause to other people. Collision pays to repair your own car after a crash. Comprehensive pays for theft, fire, hail, flood, falling objects, animal strikes and broken glass. Uninsured and underinsured motorist coverage protects you when the other driver has little or no insurance. Personal injury protection (PIP) and medical payments coverage (MedPay) pay medical bills for you and your passengers. Everything else, such as gap insurance, rental reimbursement and roadside assistance, is optional.

Almost every state requires liability insurance, but the legal minimums are low and can be used up quickly in a serious crash. Many consumer guides, including those from state insurance regulators, suggest buying more than the minimum if you have savings or income to protect. Collision and comprehensive are usually required by your lender if the car is financed or leased. On an older car that is paid off, they may no longer be worth the cost.

This guide explains what each coverage does, how split limits like 25/50/25 work, the minimums in large states, how deductibles change your premium, how claims work, and how to read your declarations page. It also includes sample packages for different drivers and a short UK section.

We rely on consumer guidance from the National Association of Insurance Commissioners (NAIC), the Insurance Information Institute (Triple-I), state insurance departments and motor vehicle agencies, the Consumer Financial Protection Bureau (CFPB) and GOV.UK. State laws change, so always check your own state's official page before you buy.

This article is general information, not insurance, legal or financial advice. Policy wording varies by insurer and state, and your own policy documents are what count.

In this guide

The main car insurance coverage types at a glance
Liability coverage: bodily injury, property damage and split limits
State minimum liability requirements in large states
Collision coverage
Comprehensive coverage: theft, weather, glass and animals
Deductibles: how they work and how to choose one
Uninsured and underinsured motorist coverage
PIP, no-fault states and MedPay
Actual cash value, gap insurance and new car replacement
Other optional add-ons
Umbrella policies and SR-22 filings
How claims work under each coverage
Sample coverage packages by driver profile
When to drop collision and comprehensive on an older car
How your coverage choices affect your premium
How to read your declarations page
UK car insurance: third party, TPFT and comprehensive
FAQ
Bottom line
Sources

The main car insurance coverage types at a glance

The NAIC's consumer guide to auto insurance describes a personal auto policy as a package of coverages, each with its own limit, and some with a deductible. You can think of the policy as having three layers:

Protection for other people when you are at fault: bodily injury liability and property damage liability.
Protection for your own car: collision and comprehensive, often called "physical damage" coverage. When people say "full coverage", they usually mean liability plus collision plus comprehensive. That phrase is not an official coverage name, and it does not mean everything is covered.
Protection for you and your passengers: uninsured and underinsured motorist coverage, personal injury protection and medical payments coverage.

On top of these, insurers sell add-ons such as rental reimbursement, roadside assistance, gap coverage and rideshare endorsements. The table below summarises the main types.

Coverage	What it pays for	Whose loss	Usually required?	Deductible?
Bodily injury liability	Injuries or deaths you cause to others, plus your legal defence	Other people	Yes, in almost every state	No
Property damage liability	Damage you cause to other vehicles and property	Other people	Yes, in almost every state	Usually no
Collision	Repairs to your car after it hits a vehicle or object, or overturns	You	Not by law; usually by lenders and lessors	Yes
Comprehensive	Theft, fire, weather, flood, falling objects, vandalism, animal strikes, glass	You	Not by law; usually by lenders and lessors	Yes (glass sometimes waived)
Uninsured motorist (UM)	Your injuries (and in some states car damage) caused by an uninsured or hit-and-run driver	You and passengers	Required in some states	Sometimes, for property damage
Underinsured motorist (UIM)	Your injuries when the at-fault driver's limits are too low	You and passengers	Required in some states	Usually no
Personal injury protection (PIP)	Medical bills, lost wages and some other costs, regardless of fault	You and passengers	Required in no-fault states and a few others	Sometimes
Medical payments (MedPay)	Medical and funeral costs, regardless of fault	You and passengers	Rarely required	Usually no
Gap insurance	Difference between loan balance and car's value after a total loss	You (and your lender)	Optional, sometimes required by a lessor	Varies
Rental reimbursement	A rental car while yours is repaired after a covered claim	You	Optional	No, but daily and total caps apply
Roadside assistance	Towing, jump starts, lockouts, flat tyres, fuel delivery	You	Optional	No

If you are still choosing an insurer, our list of the best car insurance companies in the US can help you compare. This guide focuses on what to buy, not whom to buy it from.

Liability coverage: bodily injury, property damage and split limits

Liability coverage is the core of every policy. It pays other people when you are legally responsible for a crash. It does not pay for your own injuries or your own car. The Triple-I explains that liability coverage also pays for your legal defence if you are sued, and that this defence cost is generally paid in addition to the limit.

Bodily injury liability

Bodily injury (BI) liability pays for injuries or deaths you cause to other people. That includes other drivers, their passengers, pedestrians and cyclists. It can also cover your own passengers in many states if they claim against you. Costs paid can include medical bills, lost income, pain and suffering awards, and the cost of defending you in a lawsuit. It applies when you drive your own car, and often when you drive someone else's car with permission. Household members listed on the policy are usually covered too.

A single serious injury can involve surgery, rehabilitation and months of lost wages, which is why BI limits are the most important numbers on your policy.

Property damage liability

Property damage (PD) liability pays for damage you cause to someone else's property. Most often that is another car. It also covers things like fences, mailboxes, buildings, utility poles, traffic lights and storefronts. It does not pay for your own car; that is the job of collision coverage.

How split limits work

Most US policies express liability limits as three numbers separated by slashes, such as 25/50/25. Each number is in thousands of dollars. The Triple-I and the Texas Department of Insurance both explain them the same way:

First number: the most the policy pays for bodily injury to any one person in one accident.
Second number: the most the policy pays for bodily injury to everyone combined in one accident.
Third number: the most the policy pays for property damage in one accident.

So 25/50/25 means up to $25,000 per injured person, $50,000 total for all injuries in the accident, and $25,000 for property damage. Texas, for example, requires 30/60/25, which TDI explains as $30,000 of injury coverage per person, up to $60,000 per accident, and $25,000 for property damage.

A worked example (illustrative)

Suppose you carry 25/50/25 and cause a crash that injures two people and wrecks a newer SUV. The figures below are purely illustrative.

Driver A has $40,000 in injury-related costs. Your policy pays $25,000, the per-person cap.
Driver B has $18,000 in injury-related costs. Your policy pays $18,000.
Total BI paid: $43,000, which is under the $50,000 per-accident cap.
The SUV repair or replacement costs $38,000. Your policy pays $25,000.

In this example, $15,000 of injury costs and $13,000 of property damage are not covered by your policy. The injured parties, or their insurers, can pursue you personally for the difference. That can mean wage garnishment or claims against savings, depending on your state's laws.

Combined single limit

Some policies use a combined single limit (CSL) instead of split limits. A CSL is one amount, such as $300,000, that covers all bodily injury and property damage from one accident, without a per-person sub-limit. CSL policies are more flexible because the full amount can go to whichever claim needs it. They are more common at higher limits and on commercial policies.

State minimum liability requirements in large states

Nearly every state requires drivers to carry liability insurance or prove financial responsibility in another way. The minimums vary widely, and several large states have raised them recently. The table below shows minimums for a selection of large states as of our review date. Always confirm the current figure with your state's DMV or insurance department, because these limits change and some apply only to policies issued or renewed after a certain date.

State	Minimum liability (BI per person / BI per accident / PD)	Other required coverage	Notes
California	30/60/15	None beyond liability	Raised from 15/30/5 for policies from January 1, 2025. A further increase is scheduled in state law for later years.
Texas	30/60/25	PIP must be offered; you can reject it in writing	TDI recommends considering higher limits.
Florida	No BI requirement for most drivers; $10,000 PD	$10,000 PIP	No-fault state. BI may be required after certain violations or crashes.
New York	25/50/10 (50/100 for death)	$50,000 no-fault (PIP); UM	No-fault state.
Pennsylvania	15/30/5	First-party medical benefits	Choice no-fault state (full tort or limited tort).
Illinois	25/50/20	UM and UIM	At-fault state.
Ohio	25/50/25	None beyond liability	At-fault state.
Georgia	25/50/25	None beyond liability	At-fault state.
North Carolina	50/100/50	UM and UIM	Raised from 30/60/25 for policies issued or renewed from July 1, 2025.
Michigan	50/100/10 minimum; default 250/500/10	PIP (with choice levels); property protection insurance	No-fault state. You must sign a form to choose limits below the default.
New Jersey	35/70/25 (standard policy)	PIP; UM and UIM	Raised in stages; 35/70/25 applies to standard policies from January 1, 2026. A lower-cost basic policy also exists.
Virginia	50/100/25	UM and UIM	Raised for policies effective from January 1, 2025.
Arizona	25/50/15	None beyond liability	At-fault state.

Figures come from state DMVs and insurance departments listed in our sources. Older charts may still show previous limits for states that changed recently.

Why the minimums are often too low

State minimums are designed to be affordable, not to protect your savings. Several official sources make this point directly. TDI says the minimum limits might be too low if you cause a multi-vehicle accident or if the other driver's car is totaled. The Triple-I's guide on how much coverage you need suggests buying more than the minimum if you have assets to protect.

Here is why the gap matters:

Medical costs are high. A hospital stay after a serious crash can easily exceed a $25,000 or $30,000 per-person limit.
Vehicles are expensive. Many newer cars cost well above a $10,000 to $25,000 property damage limit.
You owe the excess. When your limits run out, the injured party can sue you for the rest.
Some minimums are decades old. California's old 15/30/5 limits stood for decades before the 2025 increase.

Many consumer guides use 100/300/100 as a benchmark for drivers with moderate savings, and higher limits or an umbrella for those with significant assets. That is a starting point, not a rule. Get quotes at several levels; the price gap is often smaller than expected.

Collision coverage

Collision coverage pays to repair or replace your own car when it collides with another vehicle or an object, or when it overturns. It applies whether you were at fault or not, although if another driver was at fault you may choose to claim against their property damage liability instead.

What collision typically covers

Crashing into another car, whether moving or parked.
Hitting a fixed object, such as a pole, guardrail, wall, tree or fence.
Single-car accidents, such as sliding off an icy road.
Rollovers.
Damage from potholes, in many policies (check the wording).

Collision does not normally cover hitting an animal, theft, fire, hail or flood (those are comprehensive losses), wear and tear, the other driver's car, or injuries.

How much collision pays

Collision pays the cost of repair, minus your deductible. If the car is a total loss, it usually pays the car's actual cash value (ACV) at the time of the loss, minus the deductible. ACV is market value, which reflects depreciation. That is why a car that cost $35,000 new may produce a much smaller settlement a few years later. See the section on ACV and gap insurance below.

When lenders require it

No state requires collision coverage by law. But if you finance or lease a vehicle, your loan or lease contract almost always requires both collision and comprehensive, often with a maximum deductible. If you let the coverage lapse, the lender may buy "force-placed" insurance and add the cost to your loan. That coverage usually protects the lender, not you, and it tends to be expensive.

Comprehensive coverage: theft, weather, glass and animals

Comprehensive coverage, sometimes called "other than collision", pays for damage to your car from events other than a crash with a vehicle or object. The NAIC describes it as covering losses such as theft, fire, flood, vandalism and hitting an animal.

Common comprehensive losses

Theft: theft of the whole car, and often damage caused during an attempted theft. Theft of personal items inside the car is usually not covered under auto insurance; that is typically a homeowners or renters insurance claim.
Weather: hail, windstorms, falling trees and branches, tornadoes, hurricanes and lightning.
Flood: water damage from flooding, including storm surge. Flooded cars are often total losses.
Fire: including fire not caused by a collision.
Vandalism and riots: keyed paint, smashed windows, slashed tyres (check the wording on tyres).
Falling or flying objects: a rock that cracks the windshield, debris from a truck.
Animal strikes: hitting a deer, elk or other animal. This is one of the most common comprehensive claims in many rural areas.
Glass breakage: windshield and window chips and cracks.

Glass coverage

Glass claims have their own rules. Some insurers offer full glass coverage as an add-on, which waives the deductible for windshield repair or replacement. A few states require insurers to offer or provide zero-deductible glass coverage under comprehensive. Many insurers also waive the deductible for a small chip repair, because a repair is cheaper than a later replacement.

On many newer cars, driver-assistance cameras sit behind the windshield and may need recalibration after a replacement, which adds cost. Check whether your policy covers it.

Comprehensive usually excludes mechanical breakdown, wear and tear, and personal belongings. Like collision, comprehensive pays repair costs or actual cash value, minus the deductible. It is optional by law, but lenders and lessors normally require it.

Deductibles: how they work and how to choose one

A deductible is the part of a covered loss you pay yourself before the insurer pays. Collision and comprehensive nearly always have deductibles. Liability coverage generally does not, because it pays other people. Some states allow deductibles on PIP or on uninsured motorist property damage.

How a deductible works (illustrative)

Suppose your collision deductible is $500 and a covered repair costs $3,200. The insurer pays $2,700 to you or the repair shop, and you pay the remaining $500. If the repair costs $450, below the deductible, the insurer pays nothing, so there is no reason to file a claim. If another driver was at fault and their insurer pays in full, or your insurer recovers your money from them, you may get your deductible back. That recovery process is called subrogation.

You can often choose different deductibles for collision and comprehensive. For example, some drivers pick $1,000 for collision and $250 or $500 for comprehensive, because comprehensive claims such as glass and animal strikes can be more frequent and harder to avoid.

How deductibles affect your premium

The Triple-I notes that raising your deductible can lower the collision and comprehensive part of your premium. The higher the deductible, the more risk you keep, and the less the insurer charges. The saving is usually meaningful when moving from a low deductible to a moderate one, and smaller at the very high end.

A simple way to choose

Check your emergency fund. Pick a deductible you could pay tomorrow without borrowing.
Get quotes at two or three levels, such as $500, $1,000 and $2,000.
Do the break-even maths. If moving from $500 to $1,000 saves $150 a year (illustrative), you recover the extra $500 of risk in about three and a third claim-free years.
Check your loan contract. Many lenders cap the deductible.

There are more premium-cutting ideas in our guide to tips to lower your car insurance premiums.

Uninsured and underinsured motorist coverage

Uninsured motorist (UM) coverage protects you when you are hit by a driver who has no insurance, or by a hit-and-run driver who cannot be identified. Underinsured motorist (UIM) coverage protects you when the at-fault driver has insurance, but their limits are too low to pay your losses in full.

These gaps are common. The Triple-I, citing a study by the Insurance Research Council, reports that about one in seven US motorists was uninsured in 2022. The share varies widely by state. Even an insured driver may carry only the state minimum, which may be far less than your medical bills after a serious crash.

What UM and UIM pay for

UM/UIM bodily injury (UMBI/UIMBI): medical bills, lost wages, and in many states pain and suffering, for you, your household members and your passengers. It often also covers you as a pedestrian or cyclist hit by an uninsured driver.
UM property damage (UMPD): damage to your car caused by an uninsured driver. It is available only in some states, often with a deductible and a limit. Where UMPD is not available, collision coverage can fill the role.

Which states require it

According to the Triple-I's summary of state compulsory auto laws, the states that require both UM and UIM include Connecticut, Illinois, Maine, Maryland, Minnesota, Nebraska, New Jersey, New York, North Carolina, North Dakota, Oregon, South Dakota, Vermont and Virginia. Several other states and the District of Columbia require UM but not UIM, and many more require insurers to offer it, letting you reject it in writing. Rules differ by state and change over time, so check your state's official guidance.

Should you reject it?

Think carefully before signing a rejection form. UM and UIM often cost relatively little and protect you directly. A common approach is to match UM/UIM limits to your liability limits.

Some states also allow "stacking", which combines UM/UIM limits across several vehicles. It usually costs more, and the rules differ by state.

PIP, no-fault states and MedPay

Personal injury protection (PIP)

PIP pays for medical treatment and certain other costs for you and your passengers after a crash, regardless of who caused it. Depending on the state and the policy, it can also pay a share of lost wages, replacement services (such as childcare or housekeeping you can no longer do), and funeral costs. The Triple-I describes PIP as the core of no-fault auto insurance.

Florida is a good example. The Florida Department of Highway Safety and Motor Vehicles says that vehicles registered in the state must carry at least $10,000 of PIP and $10,000 of property damage liability. New York requires $50,000 of no-fault coverage alongside its liability minimums. Michigan lets drivers choose among several PIP medical levels, following its 2019 reform.

How no-fault works

In a no-fault state, your own PIP pays your medical bills first, up to its limit, no matter who caused the crash. In return, the state restricts your right to sue the other driver for pain and suffering unless your injuries pass a threshold. The threshold may be a dollar amount of medical costs or a description of the injury's seriousness, depending on the state.

The Triple-I lists these states as having no-fault auto insurance laws: Florida, Hawaii, Kansas, Kentucky, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Pennsylvania and Utah, plus Puerto Rico. In three of them, Kentucky, New Jersey and Pennsylvania, drivers can choose between a no-fault option and a traditional tort option. Some other states, sometimes called "add-on" states, require or offer PIP but do not restrict lawsuits.

Important: no-fault applies to injuries, not to vehicle damage. Car damage is still generally handled on a fault basis, through property damage liability, collision or UMPD. Michigan is a partial exception, with its own system for vehicle damage.

Medical payments coverage (MedPay)

MedPay pays reasonable medical and funeral expenses for you and your passengers after a crash, regardless of fault. It is usually sold in small amounts, such as a few thousand dollars per person. It is most common in at-fault states. Compared with PIP, MedPay is narrower: it normally covers medical costs only, not lost wages or replacement services.

MedPay can help with health plan deductibles, ambulance bills and passengers who lack health insurance. With a high-deductible health plan, a higher MedPay limit may be worth pricing.

Actual cash value, gap insurance and new car replacement

Actual cash value vs replacement cost

Standard auto policies pay physical damage claims based on actual cash value (ACV). ACV is what your car was worth just before the loss, taking into account age, mileage, condition and local market prices. It is not what you paid, and it is not what a brand-new version of the same car costs today.

Replacement cost, by contrast, means the cost to replace the car with a new one of the same make and model, or similar. Standard policies do not pay replacement cost. You can get something close to it only through an add-on such as new car replacement or better car replacement, and usually only for a limited time.

A car is usually declared a total loss when repair costs exceed a certain share of its ACV, a threshold some states set by law. If you disagree with a valuation, ask for the insurer's report and the comparable vehicles it used, and provide your own evidence such as local listings and service records.

Gap insurance

The CFPB describes guaranteed asset protection (GAP) as an optional product that covers the difference between what you owe on your auto loan and what your insurer pays if the car is stolen or totaled. The CFPB's own example is simple: if you owe $25,000 but the car is worth $20,000, GAP would cover the $5,000 difference.

Gap is useful when you owe more than the car is worth. That often happens if you made a small down payment, took a long loan term, rolled negative equity from a previous car into the new loan, or bought a model that depreciates quickly. Many leases already include gap protection; check your lease contract.

The CFPB makes several points worth knowing:

Gap is generally optional. You usually cannot be required to buy it from the dealer or lender to get a loan.
When bought from a dealer, the cost is often rolled into the loan, so you pay interest on it.
Your own auto insurer may offer gap coverage, and some lenders also offer it. Prices can differ a lot, so it is worth comparing.
These products can have eligibility restrictions, and depending on your situation, they may not provide value.

Once your loan balance falls below the car's value, gap no longer does anything, so review it each year.

New car replacement

New car replacement coverage, offered by some insurers, pays to replace a totaled new car with a new car of the same make and model, rather than paying ACV. It is usually available only for cars within their first year or two, or below a certain mileage, and conditions vary. Some insurers offer "better car replacement", which pays for a car one or two model years newer with fewer miles. These add-ons can overlap with gap, so check whether you need both.

Other optional add-ons

Rental reimbursement

Rental reimbursement, sometimes called transportation expense coverage, pays for a rental car or other transport while your car is being repaired after a covered claim. It usually has a daily cap and a total cap, for example a fixed amount per day up to a set number of days (the exact figures vary by policy). It only applies after a covered collision or comprehensive loss, not after a mechanical breakdown. If you have a second car in the household, or can use public transport, you may not need it.

Roadside assistance

Roadside assistance covers towing, jump starts, flat tyres, lockouts and fuel delivery. It is usually cheap, but you may already have it through a motoring club, the manufacturer warranty or a credit card.

Rideshare endorsement

If you drive for a rideshare or delivery app, your personal policy may not cover you while you are working. The NAIC explains that personal auto policies typically exclude business use or times when drivers are available for hire. Transportation network companies (TNCs) provide their own insurance, but the level depends on the "period":

Period 0: app off. Your personal policy applies.
Period 1: app on, waiting for a request. TNC coverage is often limited to liability at modest levels, and there is often no coverage for damage to your own car.
Period 2: request accepted, driving to pick up. TNC coverage is usually higher.
Period 3: passenger in the car. TNC coverage is usually highest.

The NAIC notes that most laws do not require collision or comprehensive during Period 1, which can leave your own car uncovered. A rideshare endorsement is designed to fill that gap. Tell your insurer if you drive for any app, including delivery apps.

Custom parts and equipment

Standard policies cover factory equipment. Aftermarket wheels, audio, lift kits or custom paint may be covered only up to a small limit. Custom parts and equipment coverage raises that limit. Keep receipts and photos of upgrades.

OEM parts coverage

Insurers may pay for aftermarket or recycled parts rather than new original equipment manufacturer (OEM) parts, depending on the policy and state rules. An OEM endorsement, offered by some insurers for newer vehicles, requires new OEM parts. It can suit a new or leased car.

Insurers also sell smaller extras such as accident forgiveness, vanishing deductibles and loan/lease payoff (a capped version of gap). Buying too many small add-ons is one of the common mistakes to avoid when buying car insurance. So is buying too few of the important ones. Prioritise liability limits and UM/UIM before extras.

Umbrella policies and SR-22 filings

Personal umbrella policies

A personal umbrella policy adds a layer of liability coverage above your auto and home policies. It is usually sold in blocks of $1 million. If you cause a serious crash and the damages exceed your auto liability limits, the umbrella pays the excess, up to its limit. Umbrella policies can also cover some claims that auto and home policies do not, depending on the wording.

Umbrella insurers normally require you to carry certain minimum limits on the underlying auto and home policies first. These requirements vary, but they are commonly well above state minimums. The Triple-I notes that umbrella coverage is worth considering if your assets exceed your liability limits. It is often relatively inexpensive for the amount of protection, because it only pays after the underlying limits are used up.

SR-22 (brief)

An SR-22 is not a type of insurance. It is a certificate your insurer files with the state to prove you carry at least the required liability coverage. States usually require it after serious violations, such as driving without insurance, a DUI, or repeated offences, often for a period of several years. The Virginia DMV, for example, says that drivers whose coverage lapsed may have to file an SR-22 for three years as part of reinstatement. Florida and Virginia also use a separate FR-44 filing after certain alcohol-related offences, with higher required limits.

If your SR-22 policy lapses, the insurer is generally required to notify the state, and your licence may be suspended again. Not every insurer offers SR-22 filings, so you may need to shop around.

How claims work under each coverage

The claims process follows the same basic steps for most coverages: report the loss, document it, get an estimate or valuation, and receive payment. But who pays, and whether a deductible applies, depends on the coverage. Our step-by-step guide on how to file a car insurance claim after an accident covers the practical side in detail.

Coverage	Who files the claim	Who pays	Deductible	Typical evidence
Bodily injury liability	The injured person, against you	Your insurer, up to your limits	None	Police report, medical records, statements
Property damage liability	The other owner, against you	Your insurer, up to your PD limit	None in most policies	Photos, repair estimates, police report
Collision	You, with your insurer	Your insurer; it may later recover from an at-fault driver	Yes	Photos, estimate, police report if any
Comprehensive	You, with your insurer	Your insurer	Yes, sometimes waived for glass	Photos, police report for theft or vandalism, weather reports
UM/UIM bodily injury	You, with your insurer	Your insurer, after the at-fault driver's limits (for UIM)	Usually none	Police report, proof other driver was uninsured or underinsured, medical records
UM property damage	You, with your insurer	Your insurer	Often yes	Police report, identity of uninsured driver where required
PIP	You and your passengers	Your insurer, regardless of fault	Sometimes	Medical bills, wage records, claim forms by deadline
MedPay	You and your passengers	Your insurer, regardless of fault	Usually none	Medical and funeral bills
Gap	You, after the total-loss settlement	Gap provider, to your lender	Varies	Settlement letter, loan payoff statement
Rental and roadside	You	Your insurer or its service provider	None, but caps apply	Repair shop dates, rental receipts, service call record

Claiming against the other driver or your own insurer

If another driver caused the crash, you can claim against their liability coverage with no deductible, but you may wait while fault is decided. Or you can claim under your own collision coverage, pay the deductible, and start repairs sooner; your insurer then seeks repayment through subrogation and may refund your deductible.

Whatever the coverage, report promptly (PIP claims often have strict deadlines), keep photos and receipts, and ask for any denial in writing. Every state insurance department has a consumer complaint process, and the NAIC website links to each one.

Sample coverage packages by driver profile

There is no single right package. The table below shows sample starting points for common situations. These are illustrative combinations for discussion, not recommendations for you. Your state's rules, your budget, your assets and your health coverage all matter.

Driver profile	Liability (illustrative)	UM/UIM	Collision and comprehensive	Medical (PIP/MedPay)	Add-ons to consider
Young renter, older paid-off car, few assets	Above state minimum, e.g. 50/100/50 where affordable	Match liability	Maybe liability-only if the car is worth little	State-required PIP; small MedPay if health cover is weak	Roadside
New driver on a family policy	Same as parents' policy, often 100/300/100 or higher	Match liability	Depends on the car's value	As per household policy	Accident forgiveness; umbrella for the parents
Financed or leased new car	100/300/100 or higher	Match liability	Required by lender; deductible within lender's cap	State-required plus MedPay	Gap (if not in lease), rental, OEM parts, new car replacement
Homeowner family with savings	250/500/100 or higher	Match liability	Yes while car value justifies it	PIP/MedPay sized to health plan deductible	Umbrella policy, rental, roadside
Rideshare or delivery driver	Higher than minimum	Match liability	Yes, to cover Period 1 gaps	State-required plus MedPay	Rideshare endorsement; rental
Retiree, low mileage, paid-off car	Enough to protect retirement savings	Match liability	Review each year as the car ages	Consider Medicare coordination in PIP states	Roadside; umbrella if assets are large
Driver in a no-fault state	Above minimum	Match liability	As needed	Choose PIP level carefully; check coordination with health plan	Rental

If you are insuring a teenager or someone under 25, our guide to car insurance for young drivers explains how adding them to a policy works and how to manage the cost.

When to drop collision and comprehensive on an older car

As a car ages, its value falls. Collision and comprehensive will never pay more than the car's actual cash value, minus your deductible. At some point, the premium for these coverages stops being good value.

A rule of thumb (not an official standard)

One common rule of thumb, used in many consumer guides, is this: consider dropping collision and comprehensive when the annual cost of those two coverages is more than about 10% of the car's current value. Another way to put it: if the car is worth less than about ten times the annual cost of collision plus comprehensive, the coverage may no longer make sense. This is a rough guide, not a regulatory rule.

Illustrative example: your car is worth $4,000, your deductible is $1,000, and collision plus comprehensive costs $600 a year. The most you could ever receive in a total loss is about $3,000. You are paying 15% of the car's value each year for that protection. Many people in this position would drop the coverage and put the $600 a year into savings.

Questions to ask before dropping it

Is the car paid off? With a loan or lease, you probably cannot drop it.
Could you replace it from savings? If not, keep the coverage longer.
What are local risks? Where theft, hail or flood is common, you might keep comprehensive (usually cheaper) and drop only collision.
Is a higher deductible a middle path? It cuts the cost while keeping total-loss protection.

Whatever you decide, keep liability and UM/UIM at strong levels. Those protect you from the large, unpredictable costs that can harm your finances, and they do not lose value as the car ages.

If you are weighing basic cover against broader cover, our article on how to choose between comprehensive and third-party car insurance walks through the trade-offs in more detail.

How your coverage choices affect your premium

Your premium is the sum of separate charges for each coverage on each vehicle. The NAIC's consumer guide explains that premiums depend on the coverages and limits you choose, as well as factors such as the vehicle, where it is garaged, how it is used, and the drivers in the household. Where states allow it, insurers also use factors such as driving record, annual mileage and, in some states, credit-based insurance scores.

Which coverage choices move the price most

Collision is often one of the largest charges on a newer or expensive car, and its deductible has a big effect. Raising liability limits from minimum to moderate levels usually costs less than people expect, because the first dollars of coverage carry most of the claim risk. Comprehensive is usually cheaper than collision but rises where theft, hail or flood is common. PIP can be a large share in no-fault states. UM/UIM is usually moderate. Add-ons are small individually but add up.

Illustrative premium breakdown

To show how the parts fit together, here is a purely illustrative example for one mid-priced car in a mid-cost area. Real prices vary widely by state, insurer and driver.

Coverage (illustrative)	Limit or deductible	Six-month cost (illustrative)
Bodily injury liability	100/300	$260
Property damage liability	$100,000	$170
UM/UIM bodily injury	100/300	$60
MedPay	$5,000	$20
Collision	$1,000 deductible	$300
Comprehensive	$500 deductible	$90
Rental reimbursement	Daily and total cap	$20
Roadside assistance	Standard	$8
Total		$928

Here collision and comprehensive make up about 42% of the premium. That is why reviewing them on an older car can save money, while cutting liability usually saves less and exposes you to far larger risks.

How to read your declarations page

The declarations page, often called the "dec page", is the summary at the front of your policy. It lists who and what is insured, which coverages you have, the limits, the deductibles and the premium for each part. The NAIC encourages consumers to review it when a policy is issued and at every renewal. Here is what to check, section by section.

1. Policy, drivers and vehicles

Check the policy period, named insured and garaging address, which affects your price. Make sure every regular driver is listed, including licensed teens; an excluded driver is not covered when driving your car. Check each VIN against your registration, since each vehicle may carry different coverages.

2. Coverages, limits and deductibles

This is the heart of the page. Look for lines like these:

"Bodily Injury Liability: $100,000 each person / $300,000 each accident"
"Property Damage Liability: $100,000 each accident"
"Uninsured Motorists Bodily Injury: $100,000 / $300,000"
"Collision: $1,000 deductible" and "Comprehensive (Other Than Collision): $500 deductible"
"Medical Payments: $5,000 each person" or "Personal Injury Protection" with a limit

If a coverage shows "Not Covered", "Rejected" or is missing, you do not have it. Pay special attention to collision and comprehensive on each car, and to UM/UIM limits compared with your liability limits.

3. Endorsements, lienholders and discounts

Endorsements are add-ons, usually listed by form number: rental, roadside, gap, rideshare, custom equipment and glass. If you asked for one and it is missing, ask your insurer. A lender or lessor listed as loss payee will be named on physical damage payments. Finally, check that every discount you qualify for is applied, and look at the premium for each coverage to see where your money goes.

A good habit: when your renewal arrives, put last year's dec page next to this year's. Look for changes in limits, deductibles, drivers, vehicles and price. Unexpected changes are easier to fix before the new term starts.

UK car insurance: third party, TPFT and comprehensive

UK car insurance is structured differently. Instead of choosing separate coverages with split limits, you usually choose one of three levels of cover. GOV.UK states that third party insurance is the legal minimum, and that it is illegal to drive a vehicle on a road or in a public place without at least third party insurance.

Third party only

According to GOV.UK, third party cover means you are covered if you have an accident causing damage or injury to any other person, vehicle, animal or property. It does not cover repairs to your own vehicle.

Third party, fire and theft (TPFT)

TPFT adds cover for your own car if it is stolen or damaged by fire. It still does not pay for accidental damage to your own car in a crash.

Comprehensive

Comprehensive cover adds accidental damage to your own car, and often extras such as windscreen cover and personal belongings. Policies differ, so read what is included. A point many UK drivers find surprising: third party only policies are not always the cheapest. Insurers price on their claims experience, and comprehensive quotes can sometimes be lower. It is worth comparing all three levels.

Penalties for driving uninsured in the UK

GOV.UK says police can give you a fixed penalty of £300 and 6 penalty points for driving uninsured. If the case goes to court, you can get an unlimited fine and be disqualified from driving. Police also have the power to seize, and in some cases destroy, a vehicle being driven uninsured. GOV.UK also notes that even if the vehicle itself is insured, you can be penalised if you are not correctly insured to drive it.

FAQ

What is the difference between liability and full coverage?

Liability-only pays for damage and injuries you cause to others. "Full coverage" is an informal term that usually means liability plus collision and comprehensive, so your own car is also covered. It does not mean every possible loss is covered, and it may not include UM/UIM, gap or rental unless you add them.

What does 25/50/25 mean on a car insurance policy?

It means up to $25,000 for injuries to any one person, up to $50,000 for all injuries in one accident, and up to $25,000 for property damage in one accident. The numbers are in thousands of dollars.

How much liability coverage should I carry?

At least your state's minimum, and many consumer guides suggest more if you have assets or income to protect. A common benchmark is 100/300/100, with higher limits or an umbrella policy for those with larger assets. Get quotes at several levels to see how small the price difference can be.

Is comprehensive coverage required by law?

No. No state requires collision or comprehensive by law. However, if you finance or lease your car, the lender or leasing company almost always requires both.

Does my insurance cover hitting a deer?

Usually yes, under comprehensive coverage, minus your deductible. If you swerve to avoid the deer and hit a tree or another car instead, that is usually treated as a collision claim. If you only carry liability, damage to your own car is not covered.

Does car insurance cover theft of items inside my car?

Generally not. Comprehensive covers theft of the car and damage to it. Personal belongings stolen from the car are typically covered, if at all, by homeowners or renters insurance, subject to that policy's deductible.

Do I need uninsured motorist coverage if I have health insurance?

UM/UIM can cover costs health insurance does not, such as lost wages, pain and suffering in many states, and deductibles and co-pays. It also protects your passengers. It is required in some states, and where it is optional, many consumer guides suggest matching it to your liability limits.

What is the difference between PIP and MedPay?

Both pay medical bills regardless of fault. PIP is broader: depending on the state, it can also pay lost wages, replacement services and funeral costs. MedPay usually covers only medical and funeral expenses, in smaller amounts. PIP is required in no-fault states; MedPay is optional in most places.

Do I need gap insurance?

You may benefit from gap if you owe more on your loan than the car is worth, which is common with small down payments, long loans or rolled-over debt. The CFPB notes it is generally optional and that your own insurer may also offer it, often at a different price from the dealer.

Does my personal policy cover me when I drive for Uber, Lyft or a delivery app?

Often not while the app is on. The NAIC explains that personal policies typically exclude business use. TNC coverage varies by period, and there may be no coverage for your own car while you wait for a request. A rideshare endorsement from your insurer is designed to fill that gap.

When should I drop collision coverage?

A common rule of thumb, not an official rule, is to consider it when the annual cost of collision and comprehensive exceeds about 10% of the car's value and the car is paid off.

Bottom line

A car insurance policy is a set of building blocks. Liability protects other people and, through them, your savings. Collision and comprehensive protect your car. UM/UIM, PIP and MedPay protect you and your passengers. Add-ons fill specific gaps.

State minimums are a legal floor, not a recommendation. Several large states, including California, North Carolina, Virginia and New Jersey, have raised their minimums in the past two years, which shows how far older limits had fallen behind real costs. For most drivers, the most valuable steps are to carry liability limits well above the minimum, match UM/UIM to those limits, pick deductibles your emergency fund can handle, and review physical damage coverage as the car ages.

Once a year, compare your declarations page with last year's and get one competing quote for identical coverage.

Sources

Official sources referenced in this guide.

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