Purchasing a car or motorcycle comes with more than just picking a model—you also need to protect it with the right automotive insurance coverage. Auto insurance is not only a legal requirement in most states but also a smart way to safeguard your finances in case of an accident or loss.

Below are the most common types of auto insurance coverages to consider:

1. Liability Insurance (Legally Required in Most States)

Liability insurance is the foundation of any auto insurance policy. It covers damage or injury that you cause to others in an accident where you’re at fault.

• Bodily Injury Liability: Covers medical expenses, legal fees, and lost wages for injured third parties.

• Property Damage Liability: Pays for damage to other vehicles, buildings, fences, or personal property.

💡 Tip: Most states have minimum liability coverage requirements. Be sure to check your state’s laws.

2. Collision Insurance

Collision insurance pays for repairs or replacement if your car or motorcycle is damaged in an accident, regardless of fault.

• Covers collisions with other vehicles, guardrails, poles, or other objects.

• Reimburses you up to the vehicle’s actual cash value (ACV) after a deductible.

This coverage is especially important for newer vehicles or financed cars.

3. Comprehensive Insurance

Comprehensive insurance covers non-collision damage to your vehicle. This includes events like:

• Theft or vandalism

• Fire or explosions

• Natural disasters (hail, floods, wind)

• Falling objects or animal damage

Lenders usually require comprehensive coverage if you have a loan or lease.

4. Personal Injury Protection (PIP) or Medical Payments Coverage

Depending on your state, you may be required to carry PIP or offered Medical Payments (MedPay) coverage. Both cover medical expenses for you and your passengers after an accident, regardless of fault.

• PIP may also cover lost wages, rehabilitation, and funeral expenses.

• MedPay is more limited and often used in non-PIP states.

5. Uninsured/Underinsured Motorist Coverage (UM/UIM)

If you’re hit by a driver who doesn’t have insurance—or doesn’t have enough—this coverage helps protect you.

• Covers medical bills, lost income, and vehicle repairs if you’re not at fault.

• Highly recommended, even if not required in your state.

6. Gap Insurance (For Leased or Financed Vehicles)

If your car is totaled or stolen, gap insurance covers the difference between:

• What your insurance pays (ACV), and

• What you still owe on your lease or loan.

This is especially important in the first few years of ownership when your car depreciates faster than your loan balance.

Final Thoughts

Choosing the right auto insurance coverage helps protect you, your vehicle, and your finances. Whether you’re driving a brand-new SUV or a used motorcycle, consider building a policy that includes:

• Required liability coverage

• Protection for your own vehicle (collision & comprehensive)

• Medical and income protection (PIP or MedPay)

• Extra peace of mind with UM/UIM and gap coverage