3 Types of Car Insurance Coverage Explained

By Will Koch

Car insurance is one of the most common types of insurance out there. You know you need it, but do you know what kind of coverage you need? Do you know how much? The details of car insurance can be complicated … and confusing. But it doesn’t have to be. COUNTRY Financial to the rescue.

We’re using this space to keep it simple for you. We'll: 

• Walk you through the three most common types of car insurance coverage
• Explain it in an easy-to-understand way
• Make sure you don’t fall asleep halfway through your read

Ready to get started? Let’s go.

Types of car insurance

We’re focusing on three different types of car insurance today:

• Auto liability coverage 
• Collision coverage 
• Comprehensive coverage

All three are equally important to make sure you’re protected in the event of a car accident.

1. Auto liability coverage

Liability coverage protects you if you cause damage to others and/or their stuff. Auto liability coverage can help recover another person’s medical bills or costs to repair their car and property damaged during the accident.

Most states have legal minimums to how much liability coverage you must have. When you have the right amount of liability coverage, that usually means fewer out-of-pocket costs. Another way to put it? Pay a little more now so you don’t pay a lot more later. 

There are two types of liability protection: bodily injury and property damage.

• Bodily injury liability: If you cause an accident and others are injured, your bodily injury liability coverage can provide protection for costs related to:
  • Medical expenses 
  • Lost wages and 
  • Legal fees 
• Property damage liability: If you cause an accident, your property damage liability coverage can cover the damage to property (other than your car) resulting from the accident.

Work with an insurance professional to make sure you have the right amount of liability coverage.

2. Collision coverage

Collision coverage protects your car if you hit another car, person or object.

Car collision coverage helps cover costs to repair your car regardless of fault. Collision does not cover if you hit an animal or if your car breaks down because you never should’ve gotten that many miles out of a beat-up Saturn VUE anyway. #TrueWillStory

Still awake? Excellent!

3. Comprehensive coverage

Comprehensive coverage protects your car from things that liability and collision coverage don’t. Things like theft, vandalism, fire, severe weather, hitting Bambi (not a #TrueStory … he’s fine), etc. 

Auto comprehensive coverage is typically sold alongside collision coverage. Think of them as peanut butter and chocolate. Okay on their own. But together? Magic.

Bonus! Additional car insurance options

Your car insurance can stretch beyond liability, collision and comprehensive. Here are some quick hits on what you could add (for an extra charge) to your policy:

New car replacement insurance

Here at COUNTRY, we call this The Keeper®¹. This coverage helps protect your new car if it’s totaled in an accident.

Windshield replacement

Safety glass coverage helps if your windshield, car windows or headlight covers need repair. If you have this coverage, you don’t have to pay your comprehensive deductible.

Emergency roadside assistance

Did you lock your keys in your car? Stranded on the side of the road? Roadside assistance will reimburse you for towing, delivery of fuel or other roadside issues.

Double bonus! Other types of car insurance coverage

Here are some even quicker hits on other coverages you can add on to your car insurance policy. 

Medical payments coverage

This pays for medical expenses for you and your passengers following a car accident, regardless of who is at fault.

Personal injury protection coverage

Sometimes called “PIP” coverage, and required in some states, provides coverage for: 

• lost wages if you or your passengers can’t work due to injuries
• rehabilitation costs for physical therapy, occupational therapy or other services needed for recovery.

Uninsured motorist coverage

If the other driver doesn’t have insurance at all, this coverage pays for damage to your car, medical costs and lost wages resulting from any injuries you suffered in the accident (up to the policy limits).

Underinsured motorist coverage

If the other driver has liability insurance, but it’s not enough to cover the costs of the accident, your underinsured motorist coverage kicks in to cover the rest of the costs (also up to the policy limits).

Rental car coverage

If you have an accident away from home, rental car coverage will reimburse you for a rental car if you have a claim. This could also cover travel expenses if you’re more than 100 miles from home at the time of the accident.

Personal effects coverage

This protects you if things like your phone or laptop are stolen from your car.

Check your car insurance coverage

Now that you know about the three types of car insurance coverage (and some bonus options), you’re ready to find the right car insurance for you. Sometimes, when you have more questions than answers on confusing insurance terms, it might seem easier to do nothing at all. But now you’re armed with all the info you need to take the next step.

Learn more about car insurance basics or get started with a car insurance quote today. 

Updated 8-3-23