Types of Insurance: What You Need, What You Don’t and How to Compare
The main types of insurance explained — health, auto, home, renters, life, disability and umbrella — who needs each and how to compare policies fairly.
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Auto Insurance
The coverage you need behind the wheel and how to pay less for it.
The main types of auto coverage
| Coverage | What it pays for |
|---|---|
| Bodily injury liability | Injuries you cause to others |
| Property damage liability | Damage you cause to others’ property |
| Collision | Damage to your car from a crash, regardless of fault |
| Comprehensive | Theft, fire, weather, vandalism, hitting an animal |
| Uninsured/underinsured motorist | Your costs when the at-fault driver lacks enough insurance |
| Medical payments / PIP | Medical costs for you and passengers (PIP required in some states) |
Nearly every state requires liability insurance, and required minimums vary by state.
How premiums are set
Insurers consider your driving record, claims history, vehicle, where you live and park, how much you drive, your coverage and deductibles, and — in many states — a credit-based insurance score. Rules on which factors are allowed vary by state.
Ways to lower your premium
- Compare quotes from several insurers every year or two, using identical coverage.
- Raise your deductible if your emergency fund can cover it.
- Bundle auto with home or renters insurance.
- Ask about discounts — safe driver, good student, multi-car, low mileage, anti-theft and paid-in-full.
- Drop collision/comprehensive on an older car worth little, if you can absorb the loss.
Learn how auto coverage fits with other policies in our types of insurance guide.
Frequently asked questions
Is the state minimum auto insurance enough?
Often not. Minimum liability limits in many states are low compared with the cost of a serious accident, and you can be personally responsible for costs above your limits. Many drivers choose higher limits to protect their savings and income.
Do I need collision and comprehensive coverage?
If you have an auto loan or lease, your lender will usually require them. If you own the car outright, consider whether you could afford to repair or replace it yourself.
Why did my car insurance go up?
Premiums can rise due to claims or violations on your record, changes in your area’s accident and theft rates, higher repair and medical costs, or a change in the insurer’s pricing. Shopping around at renewal can help.
Part of our Insurance hub and our complete personal finance guide. Read our editorial standards.
Auto Insurance guides
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