Last updated: September 2022

8 Types of Car Insurance Explained

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States require drivers to carry car insurance. Lenders require it as part of the loan agreement for a car. You may want it to better protect your own vehicle and finances. However, there’s not just one type of car insurance. From Liability coverage to comprehensive coverage and collision coverage, there are many different types of car insurance! Read about eight auto insurance coverages and services below to help you get the right policy.

Types of car insurance...

State Minimum Car Insurance

Required in most states.
Required in most states. Some states offer as optional insurance.

Bodily Injury Liability

Bodily Injury Liability Insurance

Bodily injury liability coverage pays for another person’s medical or funeral expenses (not yours) if you cause a car accident. It may also cover your legal costs to resolve a personal injury lawsuit if needed.

Property Damage Liability

Property Damage Liability Insurance

Property damage liability coverage pays to repair or replace another person’s property (not yours) if you’re responsible for a car accident. Typically, it covers damage to the other driver’s vehicle and someone else’s property.

Personal Injury Protection 

Personal Injury Protection

Regardless of who is at fault, personal injury protection, or PIP, helps pay for bodily injuries that you and your passengers incur in an accident. It can cover medical, hospital, and funeral expenses, lost wages, and childcare services.

Uninsured Motorist Coverage

Uninsured Motorist Coverage

Uninsured motorist coverage pays for your expenses if you’re hit by an uninsured or underinsured driver. Depending on the state, it may offer two types of protection; bodily injury to pay for medical bills, and property damage to pay for damages to your vehicle.

Car Insurance to Protect Your Car

*Often required by a lender or bank if car is leased or financed.
These coverages almost always include a deductible.


Collision Insurance

Collision coverage pays to repair or replace your vehicle if you collide with an object like a car, tree, or guardrail. It also covers your car if it overturns in an accident or is involved in a hit-and-run.


Comprehensive Insurance

Comprehensive coverage, also referred to as “other than collision coverage,” pays for vehicle damage not caused by a collision. For example, it can cover damage to your vehicle from weather conditions or natural disasters, falling objects, vandalism, fire, or theft.

Optional Car Insurance Coverages

*May be added to a car insurance policy for more financial security.

Medical Payments

Medical Payments

Medical payments coverage pays for you and your passenger’s medical costs, including ambulance bills, hospital bills, or funeral expenses in the event of a covered car accident, regardless of who is at fault.

Towing and Labor 

Towing and Labor

Towing and labor coverage added to a policy with comprehensive and collision insurance covers emergency towing costs due to a mechanical breakdown or an accident, and any necessary labor costs and services at the place of breakdown.

For more information about the types of car insurance you may need and to learn about our products and services, call 1-877-GO-DIRECT (1-877-463-4732) or find a Direct Auto store location near you to speak with a friendly Direct Auto Insurance agent.

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