1. Liability: Liability coverage is the most important part of your insurance because it is the only type of coverage required by law. Liability coverage protects you by paying for damage to other people's car and property if you are in a car accident and found to be at fault. Also included are any medical bills incurred by others, which resulted from the accident, as well as any "pain and suffering" the accident caused them.
2. Collision: This type of insurance coverage is often required by lenders or dealers if you are leasing or financing a new or newer model car. Collision coverage pays for repairs to your car, up to the book value, regardless of who is at fault in the accident.
3. Comprehensive: This type of coverage protects you by paying for the repairs of any physical damage done to your car that is caused by anything other than a collision such as fire, vandalism or theft.
4. Medical: This type of coverage is also known as personal injury protection. This type of coverage pays for the medical bills for you and your passengers, unlike liability coverage, which only pays the medical bills of those in the other car or cars involved in the accident.
5. Uninsured and underinsured driver: This type of coverage protects you by covering damages done to you, your passengers and your car, which are caused by an uninsured or underinsured driver. This includes "hit and run" and other accidents caused by an unidentifiable driver.

There are some general car insurance terms and phrases you should become familiar with before buying car insurance, such as:
- Deductible: This is the amount of money you are willing to pay out of your own pocket before the insurance begins to pay. The higher the deductible amount means the lower your monthly insurance bill is. Here is an example of how deductibles work: You have comprehensive collision insurance with a deductible of five hundred dollars. You are backing your vehicle up rather quickly because you missed your turn and back into a telephone pole causing six hundred dollars in damage to your car. You will now have to pay the deductible of five hundred dollars and your insurance will pay one hundred dollars to have the damage repaired.
- No Fault: This is a term used when a car accident occurs and no one is found to be at fault of causing the accident.
- At Fault: This term is used if you are found to be responsible for an accident according to the law. If you have 51% or more of the blame according to your state's traffic code, you are at fault.
- Umbrella Policy: This is an insurance metaphor for a general insurance policy that covers all of your property, such your car, home, etc.
- Minimum Liability Coverage: An insurance company must be willing to pay up to certain amount of money when an accident occurs, this is called the minimum liability coverage. For example if you are hit by a car and the driver's liability coverage is for ten thousand dollars, the driver's insurance company will then only pay your bills up to this amount.