Every state requires you to have a certain minimum amount of car insurance to cover the cost of damage or injuries in the case of an accident. The minimum coverage depends on where you live, but liability insurance is usually mandatory everywhere. Some states may also require you to have personal injury protection or medical payments and uninsured or underinsured motorist coverage.

Liability insurance

This pays for damage and injuries you cause others in accidents. It covers medical expenses for bodily injuries and property damage. There are limits to the amounts covered by the insurance. If the amount exceeds the limit, you’ll have to cover anything beyond the limit.

Personal injury protection or medical payments insurance

This covers your medical costs. If you or your passengers are injured in an accident, your medical bills will be covered by this insurance. It can also pay for funeral expenses. It may even cover lost wages and cost to replace services normally performed by the injured person.

Uninsured or underinsured motorist coverage

This pays your medical expenses in case you’re injured in an accident caused by a driver who is uninsured or if that driver’s insurance doesn’t have enough liability to pay all your medical expenses. It may also cover property damage to repair or replace your car.

Collision and comprehensive coverage

This insurance pays to fix your car or reimburse you for its current value if it is damaged beyond repair. It’s not required by any state, but if you’ve financed the vehicle, your lender will require you to have this coverage.

Gap insurance

If you lease a car, the leasing company will require you to carry gap insurance. It pays the difference between the claim check for the car’s value and the amount you owe on the lease in case the leased vehicle is damaged beyond repair.


You can choose to have some extra perks that don’t cost much but could be useful. Rental reimbursement pays for a rental car if your car is getting repaired after an accident. Roadside assistance or towing helps you if you need a jump start, a flat tire changed, or a tow to a repair shop. Full glass coverage pays to repair or replace chipped or broken windows without a deductible.