Buying auto insurance can be a big process. There are several types of policy options available. Before choosing, you will need to consider what type of protection is right for your vehicle.
Most people need liability insurance. This legally-required coverage protects other drivers. Most vehicle owners also need collision and comprehensive coverage. Let’s talk about the differences here.
What Does Collision Insurance Cover? 
Collision insurance is a form of car insurance meant to protect you from loss. It applies when your vehicle collides with something else. It applies when you cause the accident. Here are a few examples.
- You are backing up and hit a parked car. This policy covers damage to your vehicle.
- You collide with a solid structure. This could be a building or a tree.
- It covers damage to your vehicle when you collide with another person. Here, it only covers damage to your car. Your liability insurance pays for damage to the other person.
Collision insurance is optional. You should have it if and when you have a vehicle that is valuable. If repairing your vehicle after such a collision is expensive, this policy can help.
What Does Comprehensive Insurance Cover?
Another type of car insurance is comprehensive coverage. This policy provides protection for your vehicle. It protects against unintentional loss and unpreventable accidents. The policy is ideal for those who have valuable vehicles that would be hard to replace out of pocket. Here are some examples:
- Lightning strikes the vehicle causing a fire.
- Someone steals the vehicle. In this case, it may cover replacing the vehicle or repairing damage if you recover the vehicle.
- The car suffers damage such as vandalism from someone not living in your home.
Comprehensive insurance protects your investment in the property. If a fire occurred, could you pay to replace the vehicle out of pocket? If not, having this policy is very helpful.
If you have a lease or loan on your vehicle, the lender might require you to carry both forms of auto insurance. This helps protect their investment in the vehicle. Keep in mind that these policies provide coverage up to the stated maximum on the policy. There are also usually numerous exclusions and limitations. Work with your car insurance agent to ensure you get the right amount of coverage for your vehicle and protection.