A personal auto policy is a bundle of separate coverages, each with its own limit and price. According to the Insurance Information Institute (Triple-I), most basic policies contain six of them. Knowing what each one does is the fastest way to avoid paying for coverage you do not need, or worse, discovering a gap after an accident.
The six core coverages
| Coverage | Pays for | Required? |
|---|---|---|
| Bodily injury liability | Injuries you cause to other people | In nearly every state |
| Property damage liability | Damage you cause to others' cars, fences, poles, buildings | In nearly every state |
| Medical payments / PIP | Treatment for you and your passengers; PIP may add lost wages | PIP in no-fault states |
| Collision | Damage to your car from a crash, rollover or pothole | Not by states; often by lenders |
| Comprehensive | Theft, fire, hail, flood, vandalism, animal strikes, glass | Not by states; often by lenders |
| Uninsured/underinsured motorist | Your injuries when the at-fault driver has no or too little insurance | In some states |
Liability: protecting other people and your assets
Liability limits are written as three numbers. Triple-I explains that 50/100/25 means up to $50,000 for one injured person, $100,000 for all injuries in one accident, and $25,000 for property damage. State minimums vary widely: in Triple-I's state table (July 2024), Texas required 30/60/25 and Illinois 25/50/20, while several states, including North Carolina, Virginia and New Jersey, had scheduled increases for 2025 and 2026. New Hampshire is the outlier: it requires drivers to demonstrate financial responsibility rather than buy a policy. Minimums are only the legal floor; Triple-I recommends buying more than the minimum to protect your home and savings from a lawsuit. If you own significant assets, consider an umbrella policy on top.
Medical payments and PIP
Medical payments coverage pays treatment for the driver and passengers of your car regardless of fault. Personal injury protection (PIP) is broader and can include lost wages and the cost of replacing services an injured person normally performs. According to Triple-I, twelve states and Puerto Rico have no-fault laws: Florida, Hawaii, Kansas, Kentucky, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Pennsylvania and Utah. In those states your own PIP pays first, and the right to sue the other driver is restricted unless an injury passes a threshold. New Jersey, Pennsylvania and Kentucky are "choice" states where drivers can reject the lawsuit restriction.
Collision and comprehensive: protecting your car
Collision covers damage from hitting another vehicle or object or from rolling over. If another driver is at fault, your insurer may recover its payment from that driver's insurer and refund your deductible. Comprehensive covers losses that are not collisions: theft, fire, falling objects, windstorm, hail, flood, vandalism and contact with animals such as deer. States do not require either coverage, but if you finance or lease a car, the lender usually will. Each has its own deductible, and the choice of deductible is one of the biggest levers on price.
Uninsured and underinsured motorist coverage
This coverage pays for your injuries when you are hit by a driver who has no insurance, too little insurance, or flees the scene. It also protects you as a pedestrian. The need is real: the Insurance Research Council estimated that 15.4 percent of motorists, more than one in seven, were uninsured in 2023, with rates as high as 28.2 percent in Mississippi. Some states require UM/UIM, others require insurers to offer it; rejecting it usually requires a signed form.
Optional coverages worth knowing
- Gap coverage: a standard policy pays the car's actual cash value after a total loss, which can be less than your loan or lease balance. Gap coverage pays the difference. It usually requires collision and comprehensive on the policy.
- Rental reimbursement: pays for a rental car while yours is repaired after a covered claim.
- Roadside assistance: towing, jump-starts and lockouts.
- Rideshare endorsement: fills the gap many personal policies leave when you drive for a ridesharing platform.
How to build the right policy
- Start with liability limits that reflect your assets, not the state minimum.
- Keep UM/UIM limits in line with your liability limits.
- Add collision and comprehensive if you could not easily replace the car or if a lender requires them.
- Choose deductibles you could pay tomorrow without borrowing.
- Review the policy when you buy a car, move to another state or add a teen driver.
Use the auto insurance calculator to test limits and deductibles, read more on our auto insurance page, or request quotes from licensed insurers. For ways to lower the premium, see how to get affordable auto insurance.