What Is Car Insurance?
Learn how car insurance works and how it may help address financial exposure after a covered event.
Car Insurance Coverage
The structure of car insurance coverage
Car insurance coverage refers to the specific protections included in your auto insurance policy. These coverages describe what your insurance is designed to help pay for after an accident, theft, injury, or other covered event.
Most car insurance policies include a combination of:
- Coverage for damage to your vehicle
- Potential coverage for injuries to you and your passengers
- Liability coverage for damage you cause to others
- Protection from uninsured or underinsured drivers
- Optional add-ons that may provide additional coverage options
Understanding each coverage type helps you build a policy that matches your financial risk and driving needs.
Featured car insurance coverage
The Keeper®
This is our new-car replacement insurance. If you’ve purchased a new car and it’s severely damaged in a covered accident, COUNTRY will pay you for a brand-new car—same make and model—as long as the cost of the damages exceeds the price of a new car.1 Ask your insurance agent about The Keeper for more on how this coverage works.
Emergency Roadside Assistance
When you're stranded on the side of the road or you lock your keys in the car, your Emergency Roadside Assistance coverage can help. You’ll be reimbursed up to $100 total for towing, delivery of fuel, repair parts and labor charges.
Car insurance for teens
As if parenting a teenager isn’t difficult enough, things get even tougher when they start driving. We know it’s important to keep insurance costs down, but your main priority is to protect your teen on the road.
We have decades of experience providing car insurance for teens and can help you explore coverage options for your young driver.
Types of car insurance coverage
See how different car insurance coverage types help protect you, your car, your passengers and others on the road.
Protection for your car
- Collision coverage: Helps pay for car repairs after an accident. This includes accidents with other drivers, but can also extend to solo accidents—if you hit a tree or mailbox, for example.
- Comprehensive car insurance: Is designed to help pay for car repairs for damage caused by events other than collisions, such as theft, vandalism, weather and natural disasters.
Protection for you and your passengers
- Medical payments coverage (MedPay): This coverage helps pay the cost of medical expenses following an accident. It applies whether you caused the accident or not and is designed to help with costs such as medical and hospital bills for both you and your passengers.
- Personal injury protection (PIP): Offers the same coverage as MedPay, but goes further. Along with medical costs for you and your passengers, PIP can help with lost wages (if injuries leave you unable to work), rehabilitation and physical or occupational therapy.
Liability coverage for damage to others
Most states require drivers to carry liability coverage. If you are in an accident and are found to be at fault, liability insurance is designed to help address damage you may be responsible for, up to your policy limits.
- Bodily injury liability: If you cause an accident and injure someone else (aside from yourself or your passengers), this coverage is designed to help address the financial burden of their medical costs.
- Property damage liability: If you cause an accident and damage someone else's car or property, this coverage is designed to help pay for their repairs.
Protection from drivers who aren’t properly insured
If you are in an accident with someone who has little or no car insurance, these coverage types are designed to help address potential out-of-pocket costs.
- Underinsured motorist coverage: Is designed to help address physical and property damage resulting from an accident with another driver who has some car insurance, but not enough to cover the full costs of the accident.
- Uninsured motorist coverage: Covers physical and property damage resulting from an accident with another driver who has no car insurance.
Additional car insurance coverage types
These add-ons may allow you to tailor your car coverage based on your situation.
- Vehicle Rental and Trip Interruption Coverage: Helps if you have an accident away from home. Get reimbursed up to $800 for a rental car if you have a claim. If you have an accident more than 100 miles from home, this coverage also applies to travel expenses like transportation, lodging, and meals. These expense limits are different for each state, so ask your rep what this coverage looks like where you live.
- Personal effects coverage: If you have personal items stolen from within your car during a break-in, car insurance alone won't cover them. For that, you'll need personal effects coverage (also called "personal property coverage"), which is part of your home insurance policy.
- Windshield replacement insurance: Applies if your windshield, car windows or headlights are damaged and need repair.
- Umbrella liability insurance: While not specific to cars, umbrella insurance is an extra layer of liability coverage for both your home and your car. It is a separate product designed to help address liability exposure in the event of a catastrophic event or a high-value lawsuit.
What does "full coverage" car insurance mean?
“Full coverage” is not a specific policy type. It typically refers to a combination of:
- Liability coverage
- Collision coverage
- Comprehensive coverage
Some drivers also include uninsured motorist and medical payments coverage.
Full coverage usually protects both your vehicle and others if you are at fault in an accident. Requirements vary by state and lender.
Types of Auto Coverage Explained
Exploring your car insurance options may help you approach coverage decisions with more confidence.
Get more support from your insurance agent
Your COUNTRY Financial® insurance agent can help you explore your auto insurance coverage options and apply any car insurance discounts you may qualify for. To make the most of that conversation, consider having answers to these questions ready.
- How old is your car?
- What is the make and model of your car?
- Who drives the car/cars in your household?
- How old are the drivers in your household?
- How often and how far do you drive?
- What assets do you need to protect? This may help inform your approach to selecting a liability coverage amount.
Ready to start an auto insurance quote?
FAQs about car insurance coverage
The minimum car insurance coverage required depends on your state, but most states require drivers to carry liability coverage. Some states also require uninsured motorist coverage or personal injury protection (PIP). State minimums meet legal requirements, but they may not provide enough protection in a serious accident.
Collision coverage is not required by state law. However, if your vehicle is financed or leased, your lender will typically require collision coverage until the loan is paid off. Even when it is optional, collision coverage can help protect the value of your vehicle.
The difference between collision and comprehensive coverage is the type of damage they cover. Collision coverage is designed to help pay for damage to your vehicle caused by an accident involving another vehicle or object. Comprehensive coverage is designed to help pay for damage caused by non-collision events such as theft, vandalism, weather or animal impact.
Uninsured motorist coverage can protect you if you are injured or your vehicle is damaged in an accident caused by a driver who does not have insurance. It can also apply in some hit-and-run situations, depending on your policy and state regulations.
Car insurance may cover rental cars, but coverage depends on your specific policy. Liability, collision, and comprehensive coverage often extend to rental vehicles. Rental and trip interruption coverage can provide additional reimbursement for rental expenses after a covered claim.
1Restrictions and other guidelines may apply. See policy for details.
COUNTRY Financial® is a family of affiliated companies (collectively, COUNTRY) located in Bloomington, IL. Learn more about who we are.
Auto insurance policies issued by COUNTRY Mutual Insurance Company®, COUNTRY Preferred Insurance Company® and COUNTRY Casualty Insurance Company®, Bloomington, IL.
For product and service information, read our Terms & Conditions.
Discounts and availability vary by state.