What Does Car Insurance Cover?

Car insurance can help pay to repair or replace your car, and it covers the costs if you injure someone or damage their property. What you’re protected for depends on the coverages you choose, and your state decides which ones are required. Below, we break down each Lemonade Car coverage, show where it’s required or optional, and walk through real scenarios.

How does car insurance work?

A car insurance policy is a bundle of separate coverages. Each one handles a different situation, and each has its own limit and deductible.

• A limit is the most your insurer will pay on a type of claim.
• A deductible is what you pay before your insurance does.

Here’s how limits work in Texas, where minimum bodily injury liability is $30,000 per person and $60,000 per accident. If you cause a crash, your insurer pays up to $30,000 for any one person’s injuries, and up to $60,000 total for everyone who’s hurt.

You build your policy, and you can change it whenever you want. In the Lemonade app, you can adjust your coverages, limits, deductibles, and start date, both while you’re getting a quote and during your policy term.

Say the neighborhood kickball game gets competitive, and your windshield takes the hit. It’s not a crash, but it’s still a repair bill, and the right coverage could help.

What does each type of car insurance cover?

Some coverages are required, and others are your call. Which is which depends on where you live, so watch how each one plays out state by state. A few aren’t available everywhere, either.

Going beyond the legal minimum usually costs more, but it can also save you a lot of money and stress when something goes wrong.

Liability coverage

Liability pays for the other side when you cause an accident. It has two parts:

• Bodily injury liability covers medical bills for people you injure, as long as they weren’t passengers in your car.
• Property damage liability covers repairs or replacement for someone else’s car or property.

Run a red light and hit another car, and the driver might end up with a mild concussion while their car takes serious damage. Property damage liability pays for the repairs, and bodily injury liability pays for the driver’s medical bills.

Every state except New Hampshire requires liability coverage, but what’s required varies. Florida, for example, requires property damage liability but not bodily injury liability. Even in New Hampshire, you’d still be on the hook for the costs if you cause an accident.

Here are the minimums where Lemonade Car is available:

State	Bodily injury liability (per person / per accident)	Property damage liability
Arizona	$25,000 / $50,000	$15,000
California	$30,000 / $60,000	$15,000
Colorado	$25,000 / $50,000	$15,000
Florida	Not required	$10,000
Illinois	$25,000 / $50,000	$20,000
Indiana	$25,000 / $50,000	$25,000
Missouri	$25,000 / $50,000	$25,000
Ohio	$25,000 / $50,000	$25,000
Oregon	$25,000 / $50,000	$20,000
Pennsylvania	$15,000 / $30,000	$5,000
Tennessee	$25,000 / $50,000	$25,000
Texas	$30,000 / $60,000	$25,000
Washington	$25,000 / $50,000	$10,000

These are minimums, and a serious accident can cost far more. Medical bills climb fast, so many drivers choose higher bodily injury limits.

Collision coverage

Collision helps pay to repair or replace your own car after an accident with another car or an object, like a guardrail or a highway divider. It applies no matter who’s at fault.

Clip a highway divider, and even with no one else involved, your car might need serious repairs. Collision pays for them once you meet your deductible.

No state requires collision coverage. If you’re financing or leasing your car, though, your lender could.

Comprehensive coverage

Comprehensive helps pay to repair or replace your car after damage that isn’t a collision. Think theft, vandalism, fire, falling objects, extreme weather, and hitting an animal.

Park on the street overnight, and strong winds could knock a tree onto your car. Comprehensive pays to replace it, minus your deductible.

No state requires comprehensive coverage. If you’re financing or leasing your car, though, your lender could.

Medical payments (MedPay) and personal injury protection (PIP)

Both help pay medical bills after a car accident for you, your family members who live with you, and certain passengers, no matter who caused it. They also generally protect you if you’re injured as a pedestrian or cyclist by a car. Depending on where you live, these coverages may be required, optional, or unavailable. 

MedPay can cover:

• Ambulance and emergency room fees
• Doctor visits, surgeries, and X-rays
• Health insurance copays and deductibles
• Nursing and rehabilitation services
• Funeral expenses

PIP covers all of that, plus:

• A percentage of lost wages if your injuries keep you from working
• Replacement services, like childcare or house cleaning costs while you recover

Some people call PIP “no-fault” coverage,  because your own policy pays first for your injuries, regardless of who was at fault. In no-fault states like Florida, PIP is mandatory for medical expenses and lost wages, though damage to vehicles and other property remains fault-based.

Picture swerving off the road and hitting a tree. You break your wrist and need an X-ray and a cast. PIP or MedPay would pay for your medical costs.

Which states require PIP?

Twelve states require PIP, including Florida and Oregon, where Lemonade Car is available. Here are the minimums:

State	Minimum PIP	Lemonade Car available?
Delaware	$15,000	No
Florida	$10,000	Yes
Hawaii	$10,000	No
Kansas	$4,500	No
Massachusetts	$8,000	No
Michigan	Varies	No
Minnesota	$40,000	No
New Jersey	$15,000	No
New York	$50,000	No
North Dakota	$30,000	No
Oregon	$15,000	Yes
Utah	$3,000	No

Which states require MedPay?

Three states require MedPay: Maine, New Hampshire, and Pennsylvania. Pennsylvania is the one where Lemonade Car is available, and its minimum is $5,000. 

In every other state, either PIP or MedPay are typically optional. 

Uninsured motorist coverage

Not everyone carries insurance. If an uninsured driver hurts you or damages your car, this coverage steps in so you’re not stuck with the bill. It has two parts:

• Uninsured motorist bodily injury (UMBI) covers medical bills and lost wages from injuries an uninsured driver causes.
• Uninsured motorist property damage (UMPD) covers repairs to your car after an accident with an uninsured driver.

If an uninsured driver makes an illegal right turn and dents your door, UMPD covers the repair.

Of the states where Lemonade Car is available, Illinois, Missouri, and Oregon require uninsured motorist bodily injury coverage. The minimum is $25,000 per person and $50,000 per accident. None of them require the property damage part. In the other states, it’s optional, and worth a look.

Underinsured motorist coverage

Sometimes the other driver has insurance, but not enough. Underinsured motorist coverage pays the difference, up to your policy limits. It also has two parts:

• Underinsured motorist bodily injury (UIMBI) covers remaining medical bills and lost wages.
• Underinsured motorist property damage (UIMPD) covers the remaining repair costs for your car.

Say an underinsured driver causes $20,000 in damage to your car, but their property damage liability limit is only $10,000. UIMPD covers the remaining $10,000.

Of the states where Lemonade Car is available, Illinois and Oregon require underinsured motorist bodily injury coverage, at $25,000 per person and $50,000 per accident. Neither requires the property damage part. In the other states, it’s optional.

Temporary transportation coverage

If your car’s in the shop after a covered claim, this helps pay for getting around. It can cover rideshares, rental cars, buses, and trains, up to your daily limit, for up to a month.

If your car needs repairs after an accident and you Lyft to work in the meantime, temporary transportation covers the fares, up to your limit.

No state requires it. You can add it when your policy includes both collision and comprehensive.

Extended glass coverage

Extended glass helps pay to repair or replace a damaged windshield, often with little or no deductible, depending on where you live.

A rock kicks up on the highway and cracks your windshield. With extended glass, you get it fixed with little or no deductible.

No state requires it. You can add it when your policy includes both collision and comprehensive.

Roadside assistance

Roadside assistance helps if your car breaks down. That includes towing, lockouts, flat tires, jumpstarts, fuel delivery, and winching.

Your battery dies on the way home. You request help in the Lemonade app, a roadside partner shows up, and you get a jump at no charge.

No state requires roadside assistance. With Lemonade Car, it’s included when you drive with the Lemonade app and your policy has both comprehensive and collision. In Oregon, it’s an optional add-on. 

Rideshare and delivery endorsement

A standard Lemonade Car policy doesn’t cover you while you drive for Uber, Lyft, or DoorDash. In select states, you can add a rideshare and delivery endorsement that does. 

Here’s why it matters. Rideshare companies cover you while a passenger is in the car. Between fares, coverage looks different, and the endorsement is meant to fill that gap.

With it, your collision and comprehensive coverage works whether you’re on a personal trip or in rideshare mode. Once a passenger is in your car, liability falls to your rideshare company’s insurance.

Skipping it is risky. If you file a claim and your insurer finds out you were driving for a rideshare company, it could deny the claim.

No state requires it. 

What car insurance do I need? How to choose the right coverage

If you’ve ever Googled “what car insurance do I need,” here’s a simple way to work it out. The right coverage combination depends on your car’s value, whether you’re financing it, how much you drive, and what you could comfortably pay out of pocket after an accident.

Start with your state’s requirements in the coverage sections above. Then find the profile that sounds most like you.

You’re financing or leasing your car

Financed car insurance requirements often go beyond your state’s minimum. Your lender could require collision and comprehensive until the car is paid off, because they have a stake in it too.

Right coverage combination: liability, collision, and comprehensive.

You own an older car outright

If your car is paid off and worth just a few thousand dollars, collision and comprehensive might not pay off. After your deductible, a claim could land close to what you’d spend on premiums.

Many drivers in this spot choose liability only and cover their own repairs. Comprehensive can still be smart if you live somewhere with lots of theft, hail, or flooding.

Right coverage combination: liability, plus comprehensive if your area is high-risk.

You drive for a rideshare or delivery app

Rideshare car insurance takes a little extra attention. Your regular policy won’t cover this kind of driving without the endorsement, so check that it’s available where you live before you take trips. See the rideshare section above for the details.

Right coverage combination: your usual coverages, plus the rideshare and delivery endorsement.

You drive infrequently or work from home

Car insurance for low mileage drivers can cost less, since miles on the road are one of the things we look at when pricing a Lemonade Car policy. If your car mostly sits in the driveway, you might pay less than someone who commutes daily.

Fewer miles don’t mean zero risk, though. Parked cars can still be hit by falling branches, hail, or thieves, so comprehensive may still be worth it.

Right coverage combination: liability, plus collision and comprehensive based on your car’s value.

You want maximum protection

Is full coverage worth it? It often is if your car is new, high-value, or on the road a lot. See the next section for what “full coverage” does and doesn’t mean.

Right coverage combination: liability, collision, comprehensive, MedPay or PIP, and uninsured and underinsured motorist coverage. Add temporary transportation and extended glass if you want more.

A simple rule of thumb

If collision and comprehensive cost more than 10% of your car’s current market value each year, they might not be worth it.

Coverage by driver profile at a glance

Coverage	Financing or leasing	Older car, paid off	Rideshare or delivery	Low mileage	Maximum protection
Liability	Required	Required	Required	Required	Required
Collision	Your lender could require it	Optional, often skipped	Consider	Based on car value	Yes
Comprehensive	Your lender could require it	Consider if high-risk area	Consider	Consider	Yes
MedPay or PIP	Check your state	Check your state	Check your state	Check your state	Yes
Uninsured and underinsured motorist	Check your state	Check your state	Check your state	Check your state	Yes
Extras	Gap coverage [confirm]	None needed	Rideshare and delivery endorsement	None needed	Temporary transportation, extended glass

What does “full coverage” mean?

It’s not an actual policy type, and it doesn’t mean you’re covered for everything. “Full coverage” is a nickname for a combination of coverages that protects you in more situations.

With Lemonade Car, that usually means liability, collision, and comprehensive. Many people add temporary transportation and extended glass.

Deductibles still apply to most of these, and you’re only covered up to the limits you set. A claim isn’t guaranteed to be approved, either.

What’s covered? Real scenarios

What happened	Covered?	What pays	Good to know
You hit a deer. No other cars are involved.	Yes	Comprehensive	File a claim in the Lemonade app, and call roadside assistance if you need it. If the deer is injured, call the authorities.
You hit a deer, then crash into another car.	Yes	Collision for your car, liability for the other car	File a claim in the Lemonade app.
Your car is broken into and stolen.	Yes	Comprehensive	Check your state’s rules on how long to wait after filing a police report before you can file a claim. Tell the police right away, since it helps them find your car.
You run into a highway divider.	Yes	Collision for your car, property damage liability for the divider	File a claim in the Lemonade app.
You rear-end someone, damaging both cars and hurting the other driver.	Yes	Collision for your car, property damage liability for theirs, bodily injury liability for the driver’s medical bills	File a claim in the Lemonade app.
A thief smashes your window and takes your car radio and a suitcase of clothes.	Partly	Comprehensive for the window and radio	Car insurance won’t cover the clothes, but renters or homeowners insurance could. File a claim with each if you have both.

What doesn’t car insurance cover?

Every policy has limits, so it helps to know what’s left out. A Lemonade Car policy can’t cover:

• Business use of your car, or rideshare driving, unless you’ve added the rideshare and delivery endorsement (available in select states)
• Intentional damage to your car
• Custom parts, like color-changing LED headlights
• Routine maintenance, like oil changes and tire rotations
• Normal wear and tear, including cosmetic issues like sun-damaged leather seats

If you file a claim and the adjuster decides the damage is wear and tear, you’ll cover the repair yourself.

What affects the cost of car insurance?

A few things shape your price:

• Your insurer
• The state you live in
• Your driving history and habits
• Your car’s make and model year
• The additional drivers on your policy
• The coverages, limits, and deductibles you choose

At Lemonade Car, how you drive matters. Mileage, driving behavior, and driving history all play a part in your price.

Ready to put your coverage together?

Start with what your state requires. Then add what fits your car, your budget, and the way you drive, like collision and comprehensive if you’re financing, or the rideshare and delivery endorsement if you drive for an app.

You don’t have to get it perfect on the first try. Get a quote, choose your coverages, limits, and deductibles, and see your price. You can change your policy whenever you want.

Car insurance coverage FAQs

Reddit asked, we answered

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A few quick words, because we <3 our lawyers: This post is general in nature, and any statement in it doesn’t alter the terms, conditions, exclusions, or limitations of policies issued by Lemonade, which differ according to your state of residence. You’re encouraged to discuss your specific circumstances with your own professional advisors. The purpose of this post is merely to provide you with info and insights you can use to make such discussions more productive! Naturally, all comments by, or references to, third parties represent their own views, and Lemonade assumes no responsibility for them. Coverage may not be available in all states.