Car Insurance Coverage By Type
The table below provides a quick visual breakdown of the key events that are covered by the different types of car insurance. Just keep in mind that there can be other benefits and features covered by car insurance too, like towing costs or hire car costs following an insured event.
| What do different levels of car insurance cover? | |||
| Type of incident | Third Party Fire and Theft | Third Party Property damage | |
| if the damage is caused by fire or theft | * | ||
| Damage to other vehicles and property | |||
| Liability for the injury or death of others | |||
| * Damage caused by an uninsured third-party where youre not at fault can be covered, provided you did not contribute to the accident and could identify the motorist who was responsible.Be sure to read the Product Disclosure Statement of any policy before purchasing for details on exactly whats included. |
Our Recommendations For Car Insurance
Multiple companies offer cheap car insurance with exceptional protection, and some standout coverage options include Geico, State Farm and USAA. Its worth comparing car insurance quotes from providers before picking an auto insurer, and the options below each represent a great place to start.
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Where To Buy Car Insurance
Buying car insurance is pretty simple. But its a good idea to get multiple quotes from different insurers so that you can compare prices and coverage options. You can get a quote over the phone, online, or in-person from three primary sources:
- Insurer. Purchasing coverage directly from the insurer is fast and easy. However, if you want to compare options, youll need to contact each company separately.
- Broker. Brokers work with multiple different insurance companies, making it easy to compare coverage and prices from different insurers. Brokers can help you evaluate other policies to decide which is best for your needs.
- Captive agent. Captive agents work for a single insurer. They can help you explore the different types of coverage a single insurance company offers and serve as your point of contact if you purchase a policy. Sadly, they cant help you compare policies from different companies.
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Collision And Comprehensive Insurance
Collision and comprehensive are two different types of insurance, covering similar but different events. No states require them, but theyre essential if you want to protect the value of your vehicle.
Collision is helpful if youre in an accident with another vehicle or hit an object. For instance, this is the insurance coverage you need to pay for your car damages if you run a red light. If you hit the stoplight instead of hitting another vehicle, this is also the insurance that pays for your vehicles damages.
Comprehensive also pays for damages to your vehicle, but its not for accidents with other cars or inanimate objects. Comprehensive is very useful if you have an accident with any animal and it causes damage to your vehicle this is the coverage that pays the repair bills. It will also pay if your vehicle is damaged in a storm, fire, vandalism, or your windshield cracks.
What Does Basic Car Insurance Cover
Basic car insurance describes a policy that gives you minimum coverage in a few areas, so you comply with most state requirements. Each state handles car insurance requirements differently, so knowing whats required is critical.
There is no set standard for basic car insurance, so theres a lot of variation, but many policies offer the following types of coverage.
Having enough insurance to comply with state requirements still might not be enough to satisfy your auto loan lender. Basic coverage also might not be enough to give you peace of mind and adequately protect your four-wheeled investment.
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More About Geico Car Insurance
Geico sells insurance for cars, motorcycles and classic cars. For those who enjoy a little more adventure, Geico also sells insurance for RVs, ATVs and boats.
Optional coverage types for auto insurance includes emergency road service, rental reimbursement and mechanical breakdown insurance.
If youre concerned about a rate increase after an accident, Geico offers accident forgiveness insurance, which you can pay to add to your policy or earn by maintaining a clean driving record. Geico will waive the first at-fault accident caused by an eligible driver listed on your policy.
Geico also sells Mexico auto insurance if you plan to drive south of the border.
What Are The Different Types Of Car Insurance Coverage
Car insurance coverages vary based on your state and individual needs, but nearly every policy contains liability coverage. Most policies protecting a financed vehicle will also include comprehensive and collision coverage. Liability is a required auto insurance coverage in 49 states, while comprehensive and collision are optional coverages if your car is paid off. Uninsured/underinsured motorist coverage, medical payments, and personal injury protection may also be mandated, depending on your state. Here are the important coverage options for standard auto policies:
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Uninsured And Underinsured Motorist Insurance
Underinsured/uninsured motorist coverage helps you get compensation from an uninsured motorist in the event of an accident. In addition, this coverage pays for the damages caused by the other party or their property. Underinsured and uninsured coverage may be a combined or two separate policies.
You can choose to purchase this type of insurance coverage if you have enough money to pay for the damages. This motorist insurance covers your cars damage you have an accident with a vehicle, and the driver has no insurance. If you have an uninsured driver, you can even buy a policy for your pedestrians as well.
In addition, it will cover all the medical bills and repair costs of your vehicle. Finally, the underinsurance coverage will help you when another driver hits you with minimum liability insurance coverage that is not enough to cover the damage cost or medical bills.
What Is Comprehensive Insurance
Comprehensive insurance is a coverage that helps pay to replace or repair your vehicle if it’s stolen or damaged in an incident that’s not a collision. Comprehensive, sometimes called “other than collision” coverage, typically covers damage from fire, vandalism or falling objects . If you’re financing or leasing your car, your lender likely requires comprehensive coverage. If you own your vehicle outright, it’s an optional coverage on your car insurance policy.
If you’re shopping for auto insurance or are reviewing your current policy, you may want to consider comprehensive coverage. Learn what comprehensive insurance helps protect, how it is different from collision coverage and how limits and deductibles apply to the coverage.
What is comprehensive coverage?
Comprehensive coverage helps pay to repair or replace your car if it’s stolen or damaged by something other than a collision. Comprehensive typically helps cover theft and damage from vandalism and natural disasters, falling objects, fire, hail, flood or animals.
If you lease or finance your vehicle, your lender may require you to carry comprehensive coverage until your loan is paid off. If you own your vehicle outright, comprehensive coverage is optional on your car insurance policy.
The limit is the maximum amount your insurer will pay for a covered claim. The limit for comprehensive coverage is typically the depreciated value or the actual cash value of your vehicle.
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Other Types Of Car Insurance
While the six standard types of car insurance above are the backbone of every auto policy, they arent the only options available. Most car insurance companies have other coverage options, including:
- Rental car reimbursement: This covers the cost of a rental car in the case that an accident renders your car undrivable for an extended period of time.
- Accident forgiveness insurance: This insurance prevents your car insurance rates from going up after your first at-fault car accident. Read our full article to learn more about accident forgiveness insurance.
- Gap insurance: Gap insurance covers the difference between what you owe on a financed vehicle and what the car is actually worth in the case of a serious accident.
- Mechanical breakdown insurance: Similar to an extended car warranty, mechanical breakdown insurance covers the costs of repairs that are not related to an accident.
- Rideshare insurance: This covers drivers who are using their vehicle to drive for Uber, Lyft, and other ridesharing companies.
Many insurers also provide roadside assistance as an add-on that can cover towing and related services whether the cause is an accident or not.
Rental Car Reimbursement Coverage
This coverage is for the situation where your car is in repair after an accident and you need to hire a rental car for everyday usage. This coverage plays an important role until your car is ready for use again and you are renting a car. Your insurance company will pay for the cost to rent a car.
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What Is Third Party Insurance
Third party cover is the most basic form of car insurance and is the legal minimum requirement for drivers. As the name suggests, it just covers injuries or damage to third parties:
- Injuries to other people, passengers or animals.
- Damage to other people’s property.
- Accidents caused by a passenger or a named driver on your policy.
- Any passengers in your car who are injured in a collision where you’re at fault.
As such, third party car insurance won’t cover the repairs for your own car, an injury to you, or replacement costs if your car is lost because it has been stolen or is destroyed by fire.
What Is Not Covered By Basic Car Insurance
There is no set basic universal policy its all customizable, so reviewing your options is critical. Customizing can include raising coverage levels and adding some additional protection. The following are critical components of a comprehensive auto policy, yet any state does not require them.
- Collision: Collision coverage pays for damage to your car when another vehicle, an object hits it, or theres a rollover.
- Comprehensive: Collision covers your vehicle if an object hits it comprehensive is there if its hit by an animal like a deer or even a flock of birds. It also pays for damage from theft, vandalism, fire, hail, falling objects, floods, etc.
- Gap insurance. This type of policy covers the difference between what you owe on your vehicle and the vehicles market value. If you dont have a loan, you dont need to worry about this.
A lender might require these policies. Even if theyre not required, theyre a sound investment if youre serious about protecting your vehicle.
Some aspects of owning a vehicle are not covered by auto insurance, including general wear and tear expenses, mechanical breakdowns and repairs, intentional damage, and personal items stolen from your vehicle.
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Uninsured Motorist Property Damage
What it covers: Uninsured motorist property damage pays to repair the damage to your vehicle if someone hits you and they dont have insurance. In some states, uninsured property damage is mandatory. In others, its not offered. If this coverage is available in your state, it will usually carry a small deductible of $100 to $300.
Coverage example: Someone hits your car in a parking lot and causes $700 in damage to your vehicle. The driver doesnt have insurance. However, you have uninsured motorist property damage on your policy, so your insurance company could make a payout for your vehicles repairs minus your $100 deductible.
Whats The Difference Between Comprehensive And Third Party Car Insurance
The key difference between comprehensive car insurance and a Third Party policy is the protection they offer after you have a car accident.
Comprehensive offers cover for both your car and any damage done to other cars and property. Third Party insurance, on the other hand, only covers damages you cause to other cars and property involved, not your own car.
However, if an uninsured driver hits your car and youre able to identify them, that instance will typically be covered by a Third Party policy. Whats more, Third Party Fire and Theft policies will also cover if your car is damaged or destroyed by fire or theft.
Another difference worth noting is the price. Third Party car insurance policies generally have lower insurance premiums than comprehensive ones due to their smaller range of coverage.
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Does State Farm Cover Rental Car Insurance
The coverage you carry on your State Farm auto policy will extend to any car you rent, including car shares, like Turo. As long as you have comprehensive and collision coverage on your State Farm policy, it should cover the damage to that car. Of course, this is subject to the terms and conditions of your policy, such as the coverage territory.
This means that if you are renting a car internationally, outside of the U.S or Canada, you should purchase any coverage offered through that rental car company. In regards to larger vehicles you may rent, such as moving trucks, State Farm will also provide some coverage. Generally, trucks under a certain length can be covered, but its best to check with your State Farm agent to be sure.
Where coverage for a rental can become tricky is if you only carry liability. Without comprehensive and collision, sometimes called full coverage, you would have no protection for the rental car in an accident. In these cases, you would want to purchase the coverage offered by the rental car company. Here are a few other scenarios where getting covered through the rental company might be a good idea:
Its also important to note that any accidents you are involved in, regardless of the car you are driving, have the potential to show up on your driving record and affect your insurance. So its essential to drive safely, even in a rental.
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Uninsured Motorist And Underinsured Motorist
Some states require uninsured motorist coverage and underinsured motorist coverage while others do not. If someone is hit by a driver who does not carry insurance, uninsured motorist coverage will help pay medical bills and — depending on the state — repairs to the car. If a driver causes the accident without adequate insurance, underinsured motorist coverage will fill in the coverage gaps.
What Is The Best Type Of Car Insurance
The best type of car insurance depends on a person’s circumstances. If they have a classic car, they need coverage that protects it. If someone doesn’t have the money to pay for extensive repairs or to replace their vehicle, they may want to shop around for the most inexpensive car insurance they can find. If a person is driving an old beater and doesn’t mind if it’s banged up or worried about what will happen if it’s totaled, liability insurance may be all they need.
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Liability Vs Full Coverage: Auto Insurance Cost Comparison
How much more is full coverage than liability-only? It differs from state to state. The state with the smallest increase is Florida, at 61%, based on Insurance.coms 2022 rate analysis. At the other end, with a 447% increase, is South Dakota. You can expect the cost of liability vs. full coverage to be higher with the latter.
| State |
|---|
| 424% |
Which Is A Better Car Insurance
Taking a comprehensive car insurance cover is always advisable as it provides complete protection of not only someone elses car like a Third-Party car insurance, but also the Own damages to your car, as well as any injury to the owner driver.
Also, with a comprehensive cover, the service benefits are a great addon: Pick-up Repair and Drop with a 6 months repair warranty in over 5800+ Digit authorized cashless garages, Smartphone enabled self-inspection are some of the benefits that we offer at Digit .
Do choose your car insurance wisely, so it covers you completely when you are in need!
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Uninsured And Underinsured Motorist Coverage
If you’re hit by a driver who doesn’t have insurance, uninsured motorist coverage may help pay for your medical bills or, in some states, repairs to your vehicle. If you’re hit by an underinsured driver, that means they have car insurance but their liability limits aren’t enough to cover your resulting medical bills. That’s where underinsured motorist coverage may help.
Uninsured and underinsured motorist coverage is required in some states and optional in other states.
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