What your auto insurance policy covers depends on the type of coverage you choose. Depending on where you live, the law may require you to buy certain types of auto insurance. 

What are the types of auto insurance coverage?

Full Coverage

• If you have an auto loan, your lender requires you to carry full coverage. 

• This means you will need both comprehensive coverage and collision coverage. 

• Comprehensive coverage pays for damage to your car that’s not caused by a collision (wreck or crash), like theft, hail, windstorm, flood, fire, or impact by an animal. 

• Collision coverage pays for damage to your car from a collision with another car, an object, a pothole, or flipping over. 

Liability 

There are two types of liability insurance under insurance policies: bodily injury and property damage. Both are required in most states.  

• Bodily injury liability coverage applies to injuries you cause to someone else. You and the family members listed on the policy are also covered when driving someone else’s car with their permission. 

• Property damage liability coverage pays for damages you cause to someone else’s car or objects and structures you hit with your car.  

Uninsured and Underinsured Motorist Coverage 

In some states, you’re required to have uninsured and underinsured motorist coverage.  

• Uninsured motorist coverage reimburses you if an uninsured or a hit-and-run driver hits you.  

• Underinsured motorist coverage pays claims when an at-fault driver doesn’t have enough insurance to pay for your loss fully. 

What is not covered by auto insurance?

In some instances, you may not be covered by your auto policy and will need a separate form of coverage.  

• Guaranteed auto protection (GAP) insurance. If your car is damaged, and its market value is less than what you owe, your policy will not pay off your auto loan. Auto dealers and lenders may offer GAP insurance for this purpose, which covers the difference between what you owe and the actual value of your vehicle.  

• Rental insurance covers the cost of renting a car while your own vehicle is undergoing repairs.  

• Roadside or towing coverage reimburses you for your costs if your car is disabled. For example, the coverage might pay if your car is towed to a service facility or if you lock your keys in the car. 

• Medical payments or personal Injury protection (PIP). This coverage pays for the treatment of injuries to you and your passengers. PIP, which is available in “no-fault” states, can also cover lost wages and funeral costs up to your policy’s limit. If you live in a no-fault state, your own insurance company pays for injuries to you and your passengers regardless of who’s at fault.  

• Specialty vehicles. Your auto policy will not cover motorcycles, all-terrain vehicles (ATVs), off-road vehicles, recreational vehicles (RVs), or commercial vehicles.