Thanks! Please confirm your subscription from your email inbox
Error! Please enter a valid zip code
A car insurance policy is really a bundle of separate coverages, each paying for a different kind of loss. Here's what each one actually does, so you know what you're buying and what you're not.
Liability coverage is the coverage almost every state requires. It has two parts: bodily injury liability (BI), which pays for the other side's medical bills, lost income and pain and suffering when you're at fault, and property damage liability (PD), which pays to repair the other car or property you damaged. Liability only ever pays for the other party's losses, up to your policy's limits — it never pays for your own car or your own medical bills. Exact minimum limits are set state by state; see our state-by-state guides for current figures where you live.
Collision pays to repair or replace your own car after it hits, or is hit by, another vehicle or object — regardless of fault. It's subject to a deductible you choose when you buy the policy. It's not required by any state, but a lender will almost always require it while you're still financing the car. One exception: hitting an animal isn't a collision claim — that falls under comprehensive instead.
Comprehensive covers your car for damage that isn't a collision — fire, weather, vandalism, hitting an animal, and theft. If your car or parts of it are stolen, this is the coverage that pays, subject to your deductible; a $500 deductible against a stolen $1,000 stereo means a $500 payout, and a stolen $400 item below your deductible isn't covered at all. Insurers generally expect you to take reasonable precautions (locking the car, using recommended anti-theft devices), and personal items left inside the car — bags, electronics, luggage — usually aren't covered by your auto policy at all; that's a homeowner's or renter's policy question. A single comprehensive claim, including a theft claim, typically doesn't raise your rate the way an at-fault accident would.
Comprehensive also covers glass and windshield damage. A handful of states — Florida, Kentucky, Massachusetts and South Carolina among them — have historically required insurers to waive the deductible specifically for glass claims under a comprehensive policy; rules like this can change, so confirm current details with your insurer or state department of insurance. If you only carry liability coverage, a cracked windshield generally isn't covered at all.
Medical payments coverage (MedPay) pays medical and funeral costs for you and your passengers after a crash, regardless of fault, and typically covers the same core categories as health insurance: hospitalization, surgery, medication, and similar immediate costs. Personal injury protection (PIP) goes further — on top of medical costs, it can cover lost income, funeral expenses and, on some policies, a benefit to your heirs. PIP is mandatory in no-fault states and optional elsewhere, and usually carries its own deductible or copay on top of your regular policy deductible. If you already have solid health insurance, talk to your agent about whether you actually need a full PIP policy on top of it — in some states you may be able to opt for a lower limit.
Uninsured motorist (UM) coverage pays for your injuries, and in some states damage to your car, when the driver who hits you has no insurance or it's a hit-and-run. Underinsured motorist (UIM) coverage steps in when the at-fault driver has insurance but their limits are too low to cover your losses. This matters more than most drivers assume: in 2023, 15.4% of U.S. drivers were uninsured and 18.0% were underinsured, so about one in three had either no cover or not enough (Insurance Research Council, “Uninsured and Underinsured Motorists: 2017–2023,” February 2025). The uninsured share ranged from 5.7% in Maine to 28.2% in Mississippi.
Some states require UM coverage and others only require insurers to offer it, in which case you have to reject it in writing. It's usually inexpensive relative to what it protects, and it's worth matching your UM/UIM limits to your own liability limits.
Most policies use a "split limit" — separate dollar caps for bodily injury per person, bodily injury per accident, and property damage (the familiar X/Y/Z format you'll see on state minimum-coverage pages). A combined single limit (CSL) policy instead gives you one total pool of money that can be applied to medical costs, property damage, or both, however a given accident actually breaks down. A CSL policy can be more flexible for a serious accident with a lot of property damage and comparatively few injuries, or vice versa, since you're not boxed in by separate sub-limits.
Gap insurance matters if you're financing or leasing a car that's currently worth less than you owe on it — "negative equity." If the car is totaled, your collision coverage only pays out the car's current market value, not what you still owe the lender; gap insurance covers that difference (it doesn't cover your deductible). New cars depreciate fastest in the first year or two, so gap insurance is most worth considering early in a longer loan, when the gap between what you owe and what the car is worth tends to be largest. It's generally not worth adding if you made a large down payment or you're close to paying the loan off.
Where you buy it matters. Many car insurers sell gap coverage as an add-on to a policy that already carries collision and comprehensive, which it requires; dealers and lenders also sell it, often rolled into the loan, where you pay interest on it too. Compare the price before signing at the dealership. Many leases already include gap protection, so check the lease agreement before buying it twice. Once the loan balance falls below the car's value, gap coverage has nothing left to pay, so remove it from your policy. If you bought it through the dealer or lender and pay the loan off early, ask whether part of the price is refundable.
This optional add-on pays for a rental car while your own vehicle is being repaired after a covered accident, theft or fire — not for ordinary mechanical breakdowns. Policies set a daily dollar cap and a maximum number of days; if you rent something pricier than the cap covers, you pay the difference. It's worth skipping if you have a second car you can fall back on.
Emergency road service covers things a standard liability or comprehensive/collision policy doesn't: towing, flat-tire changes, jump-starts, fuel delivery and lockout service. Most policies focus mainly on towing after a breakdown or accident. It's optional, and if you already belong to an auto club with similar roadside benefits, check before paying for both.
Non-owner car insurance is liability-only coverage for people who don't own a car but drive one occasionally — a friend's car, a rental, or a company vehicle. It pays for damage and injuries you cause to others, but never for damage to the car you're driving, and it doesn't include collision, comprehensive, towing or rental reimbursement. It can be a good fit if you live somewhere driving is occasional, or if you want protection beyond a car owner's own (possibly low) liability limits when you borrow their car.
SR-22 isn't a type of coverage — it's a certificate your insurer files with the state proving you carry the state's required minimum liability coverage. Courts typically require it after a serious violation like a DUI, driving without a license, or driving uninsured, and it applies even if you don't own a car (a non-owner SR-22 policy). The filing itself doesn't raise your rate, but the violation behind it usually does, sometimes substantially. Requirements commonly run around three years, and letting the policy lapse or committing another offense during that period can reset the clock.
Even a full-coverage policy has limits on what it pays for. The common exclusions are:
Your policy's “exclusions” section is the definitive list, and it differs between insurers, so read it before you need to claim.
AutoInsuranceQuery editorial team. Last reviewed: September 29, 2026.
