Fine Print Guide

Your car · Personal auto

Car insurance

Pays for injuries and damage you cause to others while driving, and, if you choose, for damage to your own car and your own medical bills.

Who it's for
Anyone who owns a car, or drives regularly.
Is it required?
Yes. Almost every state requires at least liability coverage (New Hampshire is the main exception). Some states also require PIP or uninsured motorist coverage. If you finance or lease, the lender requires collision and comprehensive too.

Usually covered

  • Other people's injuries and car repairs when you're at fault (liability)
  • Your own car after a crash, if you have collision
  • Your car after theft, hail, flood, fire, vandalism or hitting a deer, if you have comprehensive
  • Your injuries when the at-fault driver has no insurance or too little, if you have uninsured motorist coverage
  • Your and your passengers' medical bills, if you have medical payments or PIP
  • Friends who borrow your car with permission, in most cases

Usually not covered

  • Damage to your own car if you only carry liability
  • Mechanical breakdown, worn tires and brakes, and maintenance
  • Belongings stolen from the car, which home or renters insurance covers
  • Driving for Uber, Lyft or deliveries, unless you add rideshare coverage
  • Using the car mainly for a business, which needs commercial auto
  • Anything above your limits, which becomes your personal debt

Real-life examples

You rear-end another car at a red light.

It depends

Your liability coverage pays for the other car and the other driver's injuries. Repairs to your own car are covered only if you have collision.

You hit a deer on a country road.

Usually covered

Hitting an animal falls under comprehensive, not collision, if you carry it. Swerving and hitting a tree instead counts as collision.

Hail dents your car in a parking lot.

Usually covered

Covered by comprehensive, minus its deductible.

A driver with no insurance runs a red light and hits you.

Usually covered

Uninsured motorist coverage pays your injuries, and in some states your car. Without it, you'd have to rely on collision and health insurance, or sue the driver.

Your engine fails at 90,000 miles.

Usually not covered

Breakdowns and wear aren't covered by standard car insurance. Some insurers sell mechanical breakdown coverage; otherwise it's what a warranty or service contract is for.

You crash while delivering food for an app.

It depends

Personal policies usually exclude delivery and rideshare driving. The app's insurance may cover part of the trip. A rideshare endorsement on your own policy fills the gap.

The parts of a car policy

Your declarations page lists each coverage separately, per car. Liability limits are written as split limits, like 50/100/50.

BIBodily injury liabilityOther people's injuries

Pays for injuries you cause others: medical bills, lost wages, pain and suffering, and your legal defense. Required almost everywhere.

Example: You run a stop sign and injure a cyclist.

PDProperty damage liabilityOther people's property

Pays for other cars, fences, buildings or anything else you damage. Required almost everywhere.

UMUninsured / underinsured motoristWhen the other driver can't pay

Protects you when the at-fault driver has no insurance, too little, or drives off. About one in seven US drivers is uninsured.

MP / PIPMedical payments or personal injury protectionYour own medical bills

Pays medical costs for you and your passengers, whoever was at fault. PIP also pays some lost wages, and is required in no-fault state states.

COLLCollisionYour car, after a crash

Pays to repair your car after it hits a car or an object, minus your deductible, up to the car's value. It doesn't pay more than the car is worth.

COMPComprehensiveYour car, everything else

Theft, fire, hail, flood, falling objects, vandalism, animals, broken glass.

ExtrasRental, roadside, gapOptional add-ons

Rental reimbursement pays for a rental car while yours is being repaired after a covered claim. Roadside assistance pays for towing and jump-starts. Gap insurance pays off the rest of a loan if the car is totaled.

Good to know

State minimums are low

Many state minimums, such as 25/50/25, were set decades ago. One serious injury can exceed $25,000 quickly, and you personally owe anything above your limit. Higher limits, such as 100/300/100, cost more but protect more of your savings and future income.

Rental cars

Your US policy usually extends to a rental car you drive in the US, with the same coverages and deductibles. Many credit cards add secondary coverage for damage to the rental. Your US policy usually covers you in Canada, but not in Mexico or overseas. Mexico requires Mexican liability insurance.

Why premiums vary so much

Price depends on your state and ZIP code, your driving record, the car, and in most states your credit history. Newcomers with no US driving record often pay much more for the first year or two.

Check your own policy

Find these on your policy or declarations page, or ask your agent:

  • Your liability limits, compared with what you own
  • Whether you have collision and comprehensive, and their deductibles
  • Uninsured motorist limits
  • Every regular driver in your household is listed
  • Whether you drive for an app or use the car for work

Not sure where to look? See how to read your policy.

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