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Collision, Comprehensive and Liability Insurance

What You Need to Know

You've likely heard many different auto insurance terms thrown around: collision, comprehensive and liability, among others. Here's what you need to know.

If you're in the market for auto insurance or just reviewing your current policy, you may have heard many different insurance terms thrown around when discussing coverage. Collision, comprehensive, liability—are they all the same? How do they differ? What do and don’t you need?

Let’s say you’re in an accident. If you’re at fault, collision insurance covers the damage to your vehicle if you collided with another car or an object such as a guard rail, tree or fence. In the event of an accident that doesn’t involve other vehicles or objects, like a rollover, collision insurance covers that, too.

What about comprehensive auto insurance? It covers most things collision insurance does not, like fire, vandalism, theft, acts of nature or even falling objects (like a tree branch or power line). Comprehensive coverage pays for the repair or replacement of your vehicle if you experience any of the abovementioned events. It’s essentially an “other than collision” type of insurance. The combination of the two is sometimes referred to as “physical damage coverage.”

Liability Insurance

So, what happens when you’re at fault and the other vehicle was damaged or its driver hurt in the accident? Most auto insurance policies will include liability coverage, so the other vehicles and people are taken care of, too.

Liability insurance protects the insured against property damage or bodily injury claims in the event of an accident involving another person or property. It covers legal fees and payouts to the affected parties should the insured be found at fault.

What’s Full Coverage?

Full coverage means that your policy includes both physical damage coverage (collision and comprehensive), as well as liability. Most states require that you carry liability insurance at a minimum, and if you’re taking out a loan or leasing your vehicle, your lender will also require physical damage coverage. If you own the vehicle outright and could afford to repair or replace it in the event it was stolen or damaged, you could avoid the cost of comprehensive insurance all together.

To Recap:

  • Collision insurance covers damage to your car only when you’re involved in an accident.
  • Comprehensive auto insurance covers damage to your car caused by something other than a collision.
  • Damage to someone else’s vehicle or their medical expenses are covered only through liability (property or bodily injury) insurance.
  • Full coverage insurance includes physical damage coverage (collision and comprehensive) and liability insurance.

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