Types of Auto Insurance Coverage in 2024 (What You Need to Know)

Understanding the types of auto insurance coverage is crucial for finding the right protection for your vehicle. Drivers should evaluate options like liability, collision, and comprehensive coverage to ensure adequate safeguarding. In North Dakota, liability coverage averages $282.55 annually, while monthly rates can start as low as $60. Compare various coverage options to find the best rates and coverage for your needs.

Discovering the best car insurance coverage options can lead to the lowest rates. We’ll simplify the process of understanding comprehensive coverage auto insurance and other affordable auto insurance options. Learn how to buy cheap auto insurance online now and ensure you’re getting a fair rate.

We’ll teach you how to search for cheap auto insurance rates and tell you the pros and cons of cheap car insurance. How can I find cheap car insurance?

Use our free tool above by entering your ZIP code to find car insurance coverage types near you.

 The Different Automobile Insurance Coverage Types

Some states have what are known as “No-Fault” rules and regulations. Policies under these rules are required to insure policyholders regardless of fault in an accident. This is also referred to as personal injury protection or PIP. Be sure to ask your insurance agent if you live in a no-fault state and how it will affect your policy.

You may be asking, “What are the different kinds of car insurance I can buy?” There are many different types of auto insurance coverage that you can choose from, and some you must purchase no matter what to drive legally. Below are the standard types of coverage which you can choose from in most areas.

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Liability Coverage

What is liability coverage? Liability covers any damages you are liable for, and it covers others if you are at fault in an accident. This insurance does not cover you and your car. This is required by all states, though exceptions can be made in certain states for individuals who can show that they can pay the state requirement out of pocket.

Did you know your credit score can affect your liability coverage? According to Experian, auto insurance companies issue lower rates to policyholders with good credit because they’re less likely to file a claim.

Let’s compare car insurance rates for liability coverage in each state in the data presented below.

U.S. Average Annual Liability Auto Insurance Rates by State

As you can see, average liability auto insurance premiums escalate by a narrow margin year by year.  How does your current rate compare to your state’s average? You see how some states have more expensive auto insurance rates than others, but those rates can change under the right circumstances.

Let’s move on to the next coverage type, personal injury protection (PIP).

Personal Injury Protection (PIP)

Personal injury protection covers you, passengers, and others listed in the policy. It does not safeguard your vehicle but does pay for your medical expenses.

In specific policies, it will also cover lost wages and other forms of damages. It is available to you regardless of who was at fault and is mandatory in individual states.

If you need more protection for medical bills, you should consider medical payments (MedPay). MedPay gives you a little more coverage for medical bills that PIP won’t pay.

This table details PIP averages in each state where information is available.

Average Annual Personal Injury Protection Auto Insurance Rates by State

The annual rates are much cheaper than liability car insurance rates. Now that we’ve covered PIP, let’s move on to uninsured/underinsured coverage.

Uninsured/Underinsured Motorist Protection

Uninsured motorist and underinsured motorist insurance policies are frequently lumped together, as they perform a similar function. However, they must be purchased separately. Both of these cover you, passengers, and household members in the policy for bodily injury if the other driver is at fault.

Uninsured motorist coverage protects you if the other driver has no insurance, while underinsured motorist coverage safeguards you if the guilty party has inadequate insurance.  You can learn more about underinsured motorist coverage here.

Let’s look at a breakdown of the percentage of uninsured and underinsured drivers by state.

Percentage of Uninsured Drivers by State

The uninsured/underinsured percentage is part of why some states have higher than average car insurance.

Next, we’ll look at collision and comprehensive coverage.

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Collision and Comprehensive

Collision and comprehensive are also mainstays of many policies. These coverages target vehicle repair costs and compensate you for property damage regardless of fault.

Collision covers your car in the event of a car crash, be it with another vehicle, structure, or object. Regardless of who’s at fault, your car insurance company will pay for any damage caused by a collision.

The cost of collision auto insurance varies by state. Here is a table showing state averages for collision coverage.

U.S. Average Annual Collision Auto Insurance Rates by State

Collision car insurance quotes are a little cheaper than liability car insurance quotes.

Comprehensive Coverage

Comprehensive covers you for damages resulting from vandalism, theft, or acts of God. These two are usually purchased together and include a deductible.

A deductible is the dollar amount you are willing to pay before the insurance covers you up to the fair market value of your car.

Are you currently paying too much in your state for these coverages? This table, meanwhile, details state averages for comprehensive coverage.

U.S. Average Annual Comprehensive Auto Insurance Rates by State

Compared to liability and collision, comprehensive auto insurance rates are much cheaper.

Find Affordable Auto Insurance for Your Automobile: Additional Coverages

You can get other types of coverage from an auto insurance company. Car insurance companies that sell insurance on a national level provide various other coverages, which are:

• Sound System Insurance
• Roadside Assistance
• Rental Car Reimbursement
• Classic Car Insurance
• Modified Car Insurance
• Usage-based Auto Insurance
• Accident-Forgiveness
• Disappearing Deductible
• Gap Insurance

Gap insurance is an excellent supplement to collision and comprehensive.

What is gap insurance? Sometimes, when your car is totaled, your lease or loan is more than the vehicle’s market value. This unexpected expense between what collision and comprehensive will pay, and your car’s market value is insured by gap coverage.

It is also a good idea to have roadside assistance, as it may cover you in many unfortunate situations. If you locked yourself out of your car or need to be towed, this type of coverage will generally dispatch someone to come to your rescue.

Lastly, there is rental reimbursement. This is optional but helpful if your car is being repaired and you are renting a vehicle. This coverage helps reimburse or pay for your rental expenses. For additional details, please refer to this resource on Rental Coverage Auto Insurance.

Auto Insurance Coverage Options: The Bottom Line

However, bear in mind that there is usually a time and dollar amount limit imposed on how long and how much the automobile auto insurance will cover you for.

Hopefully, this covers every question you may have about car insurance. If not, we have some FAQs for you. First, though, you may be asking, “Can I easily compare rates on car insurance?” or, “Should I shop for insurance online?”

In short, yes, now that you know your auto insurance coverage options, enter your ZIP code in our FREE auto insurance comparison tool below.

This tool should help answer the questions, “How can I save money on car insurance?” and “What level of coverage is right for me?”