Car accidents are one of the leading causes of financial loss in the United States. In fact, in 2020, the average cost of a car accident was over $9,000. That’s why having the right car insurance coverage is essential.
When it comes to choosing the right insurance coverage, many people get confused about the differences between liability, comprehensive, and collision coverage.
In this article, we’ll take a closer look at these types of insurance coverage and help you understand which one is right for you.
What is liability insurance?
Liability insurance is a type of auto insurance that covers the cost of damage or injury you may cause to another person or their property in an accident where you are at fault.
For instance, if you cause an accident and the other driver’s car is damaged, liability insurance can help cover the cost of repairs. Similarly, if you cause an accident that results in injuries to the other driver, their passengers or pedestrians, liability insurance can cover the cost of their medical expenses, lost wages and other damages.
It’s important to note that liability insurance does not cover the cost of damage to your own vehicle or injuries you may sustain in an accident. To protect your property, you’ll need other types of coverage, such as comprehensive and collision protections.
What is Comprehensive Coverage?
Comprehensive coverage is a type of auto insurance that covers damage to your vehicle that is not caused by a collision with another vehicle or object. Comprehensive coverage is also sometimes called “other than collision” coverage. Some examples of incidents that would be covered under comprehensive coverage include:
- Your car is stolen from your driveway
- A tree falls on your car during a storm
- Your car is vandalized
- Animal damage (such as hitting a deer)
The cost each month for comprehensive insurance varies from driver to driver. It also typically has a deductible, which is the amount you are responsible for paying out of pocket before your insurance coverage kicks in.
What is Collision Coverage?
Collision coverage is a type of auto insurance that covers damage to your vehicle that is caused by a collision with another vehicle or object. Some examples of incidents that would be covered under collision coverage include:
- Collisions with objects (such as hitting a tree or a building)
Like comprehensive coverage, collision coverage typically has a deductible.
What’s the Difference Between Comprehensive and Collision Coverage?
The main difference between comprehensive and collision coverage is the type of incidents they cover. Comprehensive coverage covers damage to your vehicle that is not caused by a collision with another vehicle or object. Collision coverage covers damage to your vehicle that is caused by a collision with another vehicle or object.
Another difference between the two types of coverage is the cost. Comprehensive coverage is typically less expensive than collision coverage. This is because comprehensive coverage covers a wider range of incidents, but they are generally less likely to occur than collisions.
Which Type of Coverage Do I Need?
The type of coverage you need depends on a variety of factors, including the age and value of your vehicle, where you live, and how you use your vehicle. If you have a newer vehicle or a vehicle that is worth a significant amount of money, you may want to consider both comprehensive and collision coverage. This will provide you with the most comprehensive protection for your vehicle.
Some lenders may even require you to have both coverages if you have a car loan or lease. This is to protect their investment in the vehicle.
If you have an older vehicle or a vehicle that is worth less money, you may be able to get by with just comprehensive coverage though. However, it’s important to remember that if you are at fault for an accident, you will not be covered for the damage to your own vehicle unless you have collision coverage.
How Do I Choose the Right Coverage?
When it comes to choosing the right coverage, it’s important to consider your specific needs and budget. You should also take into account any requirements from lenders or leasing companies.
A YourPolicy agent can help you determine the right level of coverage for your needs. They can also help you find discounts that may be available to you, such as multi-car discounts, good driver discounts, or discounts for safety features like anti-theft devices or anti-lock brakes.
In conclusion, understanding the differences between liability, comprehensive, and collision insurance is essential when choosing the right car insurance coverage for your needs. Liability insurance covers damages to other people and their property, while comprehensive and collision insurance cover damage to your own vehicle.
Depending on your vehicle’s age, value, and how you use it, you may need both comprehensive and collision coverage. It’s important to work with a YourPolicy agent to find the right coverage for you and your budget. Don’t hesitate to reach out to us at (866)236-0203 if you have any questions or need help finding the right coverage for your vehicle.