Car Insurance Information: Coverage, Claims, and Rate Factors in 2026

Car insurance is one of those products most drivers buy without fully understanding — partly because the industry uses confusing terminology, and partly because the choices feel low-stakes until you actually need to file a claim. This guide walks through every standard coverage on an auto policy, the rating factors carriers use to set your premium, what to do when you have a claim, and how to think about coverage limits.

The six standard coverages on a car insurance policy

1. Bodily injury liability (BI)

Pays for injuries you cause to others in an accident you’re at fault for. State minimums are almost always too low — we recommend 100/300 ($100K per person / $300K per accident) at a minimum.

2. Property damage liability (PD)

Pays for damage you cause to others’ property. State minimums are usually $25K–$50K; we recommend $100K for most drivers.

3. Collision

Pays to repair your car after an accident, regardless of fault. Carries a deductible (usually $500–$1,000). Optional once your loan is paid off and the vehicle’s actual cash value is low.

4. Comprehensive (“other than collision”)

Covers non-collision losses: theft, vandalism, hail, fire, flooding, falling objects, hitting an animal. Pairs with collision; deductible usually matches.

5. Uninsured/underinsured motorist (UM/UIM)

Pays for your injuries and damages when the at-fault driver has no insurance or insufficient coverage. Critical in high-UM states (Florida, Mississippi, New Mexico, Michigan).

6. Personal injury protection (PIP) / Medical payments (MedPay)

Covers medical bills for you and your passengers regardless of fault. PIP is required in “no-fault” states (FL, MI, NY, NJ, PA, MA, others); MedPay is an optional add-on elsewhere.

What carriers use to set your rate

• ZIP code — the largest single rating factor in most states. Theft frequency, weather risk, and uninsured-motorist rates vary dramatically by ZIP.
• Age and driving experience — teens pay 2.3× the 35-year-old baseline. Rates drop steadily through age 25.
• Vehicle — make, model, year, trim, and theft history. Luxury and high-horsepower vehicles cost more.
• Driving record — tickets and at-fault accidents from the last 3–5 years.
• Credit-based insurance score — counts in every state except CA, HI, MA, MI.
• Continuous coverage — a gap of even 30 days raises rates with most carriers; six months without coverage adds 25%+.
• Annual mileage — under 7,500 miles/year typically qualifies for a low-mileage discount.
• Coverage choices — higher limits, lower deductibles, optional coverages (rental, gap, roadside).

What to do at claim time

1. At the scene — call 911 if anyone is hurt, photograph everything (vehicles, damage, license plates, scene), exchange info with the other driver(s), get the police-report number.
2. Within 24 hours — report the claim to your carrier via app or 1-800. Get a claim number.
3. Days 2–3 — adjuster contacts you; provide a recorded statement only after you’ve thought through what happened.
4. Days 3–14 — vehicle inspection, repair estimate, rental car assignment.
5. Days 7–30 — payout for total loss, or repair completion for non-total claims.

If your carrier delays or denies a covered claim, escalate to a supervisor first. If that doesn’t resolve, file a complaint with your state’s Department of Insurance — complaint ratios are public, and carriers track this closely.