Why Is Car Insurance So Expensive?
Many factors make car insurance costs increase. Cost of repairs, car theft and your personal driving history are a few. Learn what drives car insurance rates.
What Does Car Insurance Cover?
by COUNTRY Financial
Car insurance is designed to help provide financial support in the event of unexpected incidents. At COUNTRY Financial, we recognize the importance of understanding what different types of auto insurance coverage are intended to address. This guide explores the various types of car insurance coverage and what situations they're designed to help with.
Understanding what your car insurance is designed to cover can help you navigate vehicle ownership and make informed decisions. While each state has minimum insurance requirements, coverage options extend beyond these basics. Let's explore situations where different types of auto insurance coverage may apply.
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Required car insurance coverage
Drivers in all 50 states are required to have minimum levels of car insurance. In almost all states, driving without meeting these minimum requirements is not legally permitted.
The specific requirements vary by state, with different types and amounts of coverage mandated. You can search for your state's Department of Public Safety (DPS) or Department of Motor Vehicles (DMV) website (make sure it ends in ".gov") to see what's required in your location.
One coverage that almost all states require is liability insurance, which is designed to help cover expenses resulting from accidents you cause. It's intended to help pay for medical expenses for other parties and property damage, but does not extend to your own vehicle or medical costs.
The different types of auto insurance
Understanding the differences between coverage types can help you make informed decisions:
| Coverage type | What it's designed to cover | When it applies | Required by law? |
|---|---|---|---|
| Liability | Damage to others and their property | When you cause an accident | Required in most states |
| Collision | Damage to your vehicle from accidents | Any collision, regardless of fault | Optional (may be required by lender) |
| Comprehensive | Damage from non-collision events | Theft, weather, vandalism, animals | Optional (may be required by lender) |
| Uninsured Motorist | Your costs when hit by a driver with no insurance | When other driver has no insurance | Required in some states |
| Underinsured Motorist | Your costs when hit by a driver with insufficient insurance | When other driver's coverage is not enough | Required in some states |
| Medical Payments (MedPay) | Medical expenses for you and your passengers after an accident | Any covered accident, regardless of fault | Optional in most states |
| Personal Injury Protection (PIP) | Medical expenses and lost wages for you and your passengers | Any covered accident, regardless of fault | Required in some states |
Liability coverage
Liability coverage is a fundamental component of car insurance. It's designed to help address costs if you are determined to be at fault in an accident. This may include costs related to property damage and bodily injuries sustained by others.
Comprehensive coverage
Comprehensive coverage is designed to help cover damage caused by non-collision events. This type of coverage is intended to address events beyond your control, including:
- Theft
- Vandalism
- Falling objects
- Natural disasters (hail, flooding, tornadoes or high winds, etc.)
- Encounters with animals (striking a deer, damage from rodents, etc.)
Collision coverage
Collision insurance is designed to help cover costs related to collisions, as its name implies. This coverage is intended to help address financial costs from various collision scenarios.
This may include collisions with another vehicle, in which case coverage applies regardless of who caused the accident. It also applies to single-vehicle collisions, such as backing into a mailbox or hitting a tree. Coverage may also apply if you swerve and your vehicle rolls.
Underinsured and uninsured motorist coverage
If you're in an accident with a driver who has little to no car insurance, underinsured and uninsured motorist coverage are designed to help address costs you might otherwise be responsible for.
They're two separate coverage types:
- Underinsured motorist coverage: Designed to help cover bodily injury and property damage resulting from an accident with another driver who has some auto insurance, but not enough to cover costs of the accident.
- Uninsured motorist coverage: Designed to help cover bodily injury and property damage resulting from an accident with another driver who has no auto insurance.
Many states require underinsured or uninsured motorist coverage, and some require both. Check your state's requirements to see if this applies to you.
Personal injury protection
Personal Injury Protection (PIP) is designed to help cover medical expenses for you and your passengers, regardless of who is at fault in an accident. PIP may also help cover lost wages or funeral expenses in some states. As a note, PIP is not offered in every state.
How coverage requirements vary by state
Car insurance requirements differ significantly across the United States. While all states except New Hampshire require some form of auto insurance, the specific types and amounts vary:
- States requiring Personal Injury Protection (PIP): Delaware, Florida, Hawaii, Kansas, Kentucky, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Oregon, Pennsylvania, and Utah mandate PIP coverage (also called "no-fault" insurance in some states).
- States with higher liability minimums: Alaska and Maine require higher liability limits than most other states, with minimums of 50/100/25 (meaning $50,000 per person for bodily injury, $100,000 per accident, and $25,000 for property damage).
- States requiring uninsured motorist coverage: More than half of U.S. states require some form of uninsured or underinsured motorist coverage to help address situations where you're hit by a driver without adequate insurance.
To find your specific state's requirements, visit your state's Department of Motor Vehicles (DMV) or Department of Public Safety website.
Additional car insurance options
- Rental car expenses: If your vehicle breaks down, your insurance might cover the cost of a rental car.
- Roadside assistance: Enjoy peace of mind with roadside assistance, including towing services.
- Insurance for classic or antique cars: Coverage options may be available to help address the value of your classic or antique car. Ask your representative about what is available in your state.
- Business use designation: If you use your personal vehicle for business purposes, your policy may be able to reflect that use. Ask your COUNTRY Financial representative about adding a business use designation to your personal auto policy.
What is not covered by car insurance?
Car insurance won’t cover all the costs you may have as a car owner, including:
- General maintenance: Tune-ups, replacement of worn parts and other repair costs won’t be covered by car insurance. They’re considered general maintenance and are simply part of the cost of owning a car.
- Mechanical breakdowns: Breaking down on the road won’t be covered by your insurance. That said, purchasing emergency roadside assistance coverage could help reimburse costs of towing, flat-tire replacement and more.
- Property inside your car: As mentioned when we discussed theft, reimbursement for items stolen from within your car falls under personal property coverage, which is part of home insurance.
Making informed car insurance coverage decisions
It's important to remember that while your insurance provider is responsible for covering claims, ensuring you have the right coverage for your unique situation is your responsibility. Explore these coverage options and customize your auto insurance to fit your needs.
Stay informed, stay covered and if you need help, always reach out to your local agent.
Frequently asked questions
While many car insurance policies include car insurance for rental cars, you’ll need to check your policy to be certain.
That said, most personal car insurance policies include coverage types that can extend to rental cars, like liability coverage, collision coverage or comprehensive coverage.
If your policy does not include these coverage types, or if you would like additional protection when renting, you may want to consider purchasing rental car insurance directly from the rental car agency at the time of your rental.
Car insurance can cover theft, but only if you have comprehensive coverage added to your policy. It is designed to help pay for damage incurred during break-ins, the cost of stolen parts or the value of a stolen car itself, subject to your policy terms and deductible.
It does not, however, cover personal items inside the car. To protect items inside the car—your laptop, phone or other valuables—from theft, you’ll need personal property coverage, which is part of home or renters’ insurance.
Comprehensive coverage is designed to help cover damage from non-collision events like theft, vandalism, weather, and animal strikes. Collision coverage is intended to help address damage from collisions with other vehicles or objects. These are separate coverage types, and many drivers choose to carry both for broader protection.
The amount of car insurance coverage that may be appropriate depends on several factors, including your state's minimum requirements, your vehicle's value, your assets, and your personal financial situation. While state minimums establish a legal baseline, many drivers choose higher coverage limits based on their individual circumstances. A COUNTRY Financial representative can help you explore coverage options that may align with your situation.
In most cases, your car insurance policy primarily follows your vehicle rather than you as a driver. This means your policy typically provides coverage when others drive your car with your permission. However, coverage details can vary by policy and situation, so it's worth reviewing your specific policy terms or discussing with your insurance representative.
"Full coverage" is a common term that typically refers to a car insurance policy that includes liability coverage, comprehensive coverage, and collision coverage together. However, "full coverage" is not an official insurance term, and what's included can vary. It's important to review your specific policy to understand what coverages are included.
Published 8-12-25
Updated 5-19-26
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COUNTRY Financial® is a family of affiliated companies (collectively, COUNTRY) located in Bloomington, IL. Learn more about who we are.
Auto insurance policies issued by COUNTRY Mutual Insurance Company®, COUNTRY Preferred Insurance Company® and COUNTRY Casualty Insurance Company®, Bloomington, IL.
This informational article provides an overview of various car insurance coverages for educational purposes. It is important to note that not all mentioned coverages may be offered, and specific insurance policies may vary.
We take pride in providing accurate, truthful information in our articles. See our editorial standards to learn more.