Learning What is Covered by Car Insurance

What does car insurance cover? Depending on your state's minimum requirements, your car insurance policy will most likely cover collision, property damage, and bodily injury.

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Reviewed byJoel Ohman
Founder, CFP®https://res.cloudinary.com/quotellc/image/upload/insurance-site-images/ciccom-live/41b5e36b-joel-ohman.jpg

UPDATED: Jul 3, 2020

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Here's what you need to know...
  • There are many different types of insurance which cover many different types of incidences
  • State law requires certain levels of car insurance coverage
  • There are many optional choices for car insurance that will cover almost any kind of damage to your vehicle besides normal wear and tear


Car insurance covers different aspects of your car depending on the type of insurance you maintain. In addition to safekeeping your car, car insurance can also protect the driver and passengers from bodily injury.

Car insurance may also cover other drivers who do not have car insurance.

Each state requires a minimum amount of car insurance on any vehicle that maintains a tag and registration. However, car insurance can also include:

  • Liability
  • Bodily injury
  • Property damage
  • Medical coverage
  • Comprehensive
  • Collision
  • Uninsured and underinsured motorist
  • Personal injury protection

Liability insurance is a portion of your car insurance that is outlined under your policy. According to HowStuffWorks, liability insurance covers bodily injury and property damage.

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What does basic car insurance cover?

What does car insurance cover? Typically, your state will require you to carry collision coverage, liability insurance, and bodily injury insurance in order to legally drive on the road.

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What is bodily injury coverage?

Bodily injury coverage is a portion of your car insurance policy that states the amount of coverage for each person in the car, including the maximum amount of coverage for everyone in the car should there be injuries from a car accident.

This car insurance helps to pay for medical expenses, pain, and suffering, and replaces any wages missed from being unable to work.

According to the InvestorGuide.com, bodily injury is noted in thousands even though the number is not. For example,

For example, bodily injury may be written as 100/300, which means that each person can receive up to $100,000 in paid medical expenses, but the total amount of everyone in the car cannot exceed $300,000 in medical expenses.

This car insurance coverage will also be used to cover legal bills if necessary.

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What is liability car insurance?

Liability car insurance pays for the expenses to fix the car as well as any property that was damaged in the accident. When written on a policy, the property damage is the third number listed after bodily injury.

Using the example from above, the policy might be written as 100/300/30. The 30 is indicating $30,000 to cover the damages to the other car or object, including replacing it.

You should never get under $25,000 for property damage coverage since the average car today costs $25,000 to replace new.

If there are any court costs or expenses, the liability portion of your car insurance will cover those fees.

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Other Car Insurance Coverage Explained

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Medical coverage is the portion of your car insurance that pays for medical expenses when the policyholder lives in a no-fault state.

Comprehensive coverage is the part of car insurance that pays for damages to a vehicle that occurs in situations other than an accident. For instance, comprehensive insurance would provide funds to repair damage to a car caused by:

  • Fire
  • Wind
  • Water
  • Hail
  • Vandalism
  • Theft

There is usually a deductible that must be met before the insurance company will pay for repairs. Most deductibles range from $250 to $500, although some are even higher.

Collision coverage is the car insurance that covers damages when the car collides with something like another car or a pylon, mailbox, or tree.

There is usually a deductible that must be met before the insurance company will pay for repairs. Most deductibles start at $250 and go up.

Uninsured motorist coverage is car insurance that pays to repair your car when it collides with a car that is not insured with liability coverage.

Underinsured motorist coverage is car insurance that pays to repair your car when it collides with a car that does not have sufficient liability coverage.

Personal injury protection, which is also known as PIP, is car insurance that pays the medical bills for the driver when in a car accident.

Many times a car insurance policy will provide rental car reimbursement for an additional charge. The car insurance coverage will reimburse the policyholder when there is a need for a rental car.

What is recommended for car insurance coverage?

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You can determine the kind of car insurance you need in multiple ways.

First, you can visit your Department of Motor Vehicles website for your state. The website will explain the minimum required car insurance coverage.

In most states, the three types of auto insurance coverage that are the most important to have are:

  • Collision insurance
  • Bodily injury insurance
  • Liability insurance

You can also call or visit your insurance agent to find out the minimum car insurance requirements required by your state.

Lastly, you can perform an insurance rate comparison online. In the process, the fields will require you to input certain information to determine the requirements of your state.

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