What kind of car insurance coverage do I need?

The kind of car insurance coverage you need depends on the vehicle you’re driving, the insurance laws in your state, and how much coverage you actually want for your vehicle. There are three main kinds of auto insurance coverage, and each comes with varying levels of coverage. Enter your ZIP code below to start comparing insurance quotes for basic liability coverage, full coverage, comprehensive coverage, and other kinds of car insurance coverage.

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Tonya Sisler has a Bachelor’s Degree from the University of South Carolina in Journalism and has worked for 15+ years in management. She has also completed a proofreading certification and is currently a professional writer.

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Brad Larson has been in the insurance industry for more than a dozen years. He started out as a claims adjuster for a national carrier. He has since switched to the agency side of the business. Brad is licensed in all P&C lines.

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Reviewed by Brad Larsen
Licensed Auto Insurance Agent

UPDATED: Oct 30, 2020

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Here's what you need to know...

The topic of auto insurance can sometimes be a confusing one. Most drivers want to be sure they have the coverage that they need. They do not want to pay for coverage that they really won’t use and don’t need.

Without good information, it can be difficult to separate necessary coverages from unnecessary ones. Unfortunately, there is no one-size-fits-all auto insurance policy.

However, the good news is, consumers have options when it comes to car insurance. By using an online price comparison tool, drivers can compare several different auto insurance carriers, policies, and rates all on one convenient website.

Start comparing now to make sure your rates are competitive! Enter your zip code to get started.

Legally Required Auto Insurance


Drivers need to understand that nearly all states have minimum requirements for auto insurance, which protects all drivers on the road.

The minimum amount of insurance drivers can purchase, and the one that most states require is that of liability coverage. Bodily injury liability covers damages you cause to someone else’s body.

For example, medical bills or funeral expenses. Property damage liability provides for damages that you cause to other people’s property. For example cars, buildings, or bikes.

It is very important for drivers to know that liability coverage will not provide any coverage for their own damages in an accident, no matter who is at fault.

People who are leasing their vehicle, have a newer vehicle, or who are still paying their vehicle off will want to or even be required to carry other coverages in addition to liability.

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What happens if a driver doesn’t have auto insurance?

Not carrying the required minimum amounts of car insurance in your state can come with many serious legal and financial consequences.

While it may be tempting to risk not having car insurance, it isn’t worth it in the long run. Depending on your state and the circumstances, consequences for not obeying your state’s car insurance laws include, but are not limited to:

  • Suspension of your driver’s license
  • Suspension of your car registration
  • SR 22 auto insurance requirement
  • Fines
  • Imprisonment
  • Impounding of your vehicle
  • Community service

Additionally, if you cause an accident, the victims could come after you in civil court for their emotional, physical, and monetary damages. If you lose the case, by law they can come after your assets and even garnish your wages to get compensated.

Medical Payments or Personal Injury Protection


Often simply referred to as PIP or Med Pay coverage, this type of insurance is legally required in some states. It provides coverage for medical expenses, lost wages, and hired household help in the event of a car accident.

In some states, drivers can file a med pay claim on their own insurance policy regardless of how is at fault for the accident. For drivers who do not have health insurance or who do not have the best health insurance coverage, Med Pay is a must.

Even for drivers who do have health insurance, Med Pay is a good idea to have. In serious accidents, it can compliment your health insurance to help cover all of your expenses.

Uninsured/Underinsured Motorist

Protection against other drivers who do not have insurance or who do not have large limits on their coverage, uninsured/underinsured motorist coverage can be extremely helpful. In fact, in some states uninsured motorist coverage a legal requirement.

If you are involved in an accident with another driver who does not have auto insurance, you can file a claim with this coverage on your own auto policy.

If you are in an accident with a driver who has low insurance coverage limits, you may be left holding several bills you don’t feel you should have to pay, which is where underinsured motorist coverage will come in handy and cover you where the other coverage limits end.

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Comprehensive and Collision Coverage


For better protection, many drivers will want to consider adding comprehensive and collision coverage to their auto policies. Collision covers damages caused in an accident with a vehicle or other objects. Comprehensive covers other damages such as natural disasters, fires, flooding, theft, vandalism, or even hitting wildlife.

Drivers who have older cars that are not worth much or who have little financial assets may decide that these types of coverages are not worth paying for.

On the other hand, drivers with newer vehicles or who are relied upon financially will want to have comprehensive and collision on their auto insurance policy.

Also, cars that are still being paid off or are usually leased require this type of coverage. Drivers can check with the bank or leasing company to make sure they are in compliance with their loan or lease agreements.

Gap Coverage

Another coverage drivers who have leased vehicles or vehicles that are not paid off should consider is gap coverage. For some leased cars, it is mandatory. With cars depreciating quickly in value, even non-leased cars can benefit from gap coverage.

If you are in an accident and the car insurance company deems your vehicle to be more or as expensive to fix as the fair market value of your vehicle, they will opt to pay you the fair market value.

However, many times this amount of money is not enough to pay off the remaining lease or loan on the car. In these cases, gap coverage fills in the gap.

It covers the difference between what the car insurance company is offering you for your vehicle and what is still owed on your lease or loan. Consumers should check with their loan or leasing company to find out if gap coverage is required or would be beneficial for them.

If paying for the auto insurance coverage you need is becoming a burden, try using our FREE online price comparison tool. Our tool will allow you to easily do some comparison shopping and choose the policy that best fits your insurance needs and your budget. Enter your zip code to get started!

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