Car Insurance Coverage Explained: Liability, Collision, Comprehensive, UM/UIM and PIP
Most premium differences between "cheap" and "full" coverage come down to six coverages. Here is what each one does, in plain terms.
The six coverages
| Coverage | Pays for | Required? |
|---|---|---|
| Bodily injury liability | Injuries you cause to others; your legal defense | Required in nearly every state, with minimum limits |
| Property damage liability | Damage you cause to others' cars and property | Required nearly everywhere |
| Collision | Repairs to your car after a crash you cause or with an object | Optional by law; required by most lenders and leases |
| Comprehensive | Theft, vandalism, hail, flood, fire, animal strikes, glass | Optional by law; required by most lenders |
| Uninsured / underinsured motorist (UM/UIM) | Your injuries (and in some states your car) when the at-fault driver has no or too little insurance | Required in about 20 states; strongly recommended everywhere |
| Personal injury protection (PIP) or MedPay | Your own medical bills regardless of fault (PIP may include lost wages) | PIP required in no-fault states such as FL, MI, NY, NJ, PA (choice), MN |
Reading limits: what 25/50/25 means
Liability limits are written as three numbers in thousands: $25,000 bodily injury per person, $50,000 per accident, $25,000 property damage. State minimums are often at or near those levels. A serious injury claim or a new pickup truck can exceed them quickly, and anything above the limit comes out of your assets. Most advisers suggest at least 100/300/100 for anyone with savings or a home; the extra premium is usually modest because the risk of a claim that large is low.
Deductibles: the trade you control
Collision and comprehensive each carry a deductible you pay before the insurer does. Moving from $500 to $1,000 typically lowers those coverages by 10–20%. Choose the highest deductible you could pay next week without stress; the savings compound every year, while a claim is occasional.
When to drop collision or comprehensive
A common rule: if the car's value is under roughly ten times the annual cost of the coverage, or below a few thousand dollars, the coverage may not be worth carrying. Keep comprehensive longer than collision if you live where theft, hail or deer strikes are common — it is usually cheap.
Extras worth a look
- Rental reimbursement — a few dollars a month; valuable if you have one car.
- Roadside assistance — cheap through insurers, often duplicated by auto clubs or car warranties.
- Gap coverage — essential on a financed or leased car in its first years.
- Rideshare endorsement — required if you drive for a rideshare or delivery app; personal policies exclude it.
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Check my rateFrequently asked questions
What is "full coverage"?
It is not a legal term. It usually means liability plus collision and comprehensive, often with UM/UIM and medical coverage added. Ask what limits and deductibles are included.
Do I need uninsured motorist coverage?
If your state allows you to decline it, consider keeping it: roughly one in eight drivers nationally is uninsured, and it is inexpensive relative to what it protects.
Does comprehensive cover a cracked windshield?
Yes, in most policies, sometimes with a separate low or zero glass deductible depending on the state and insurer.
Related guides
PolicySaint is an independent comparison marketplace, not an insurer. Rate examples are illustrative and vary by state, driver profile and coverage. Sources include the Insurance Information Institute, the National Association of Insurance Commissioners and state departments of insurance. We update guides quarterly; see our editorial standards.