Learn About the Different Types of Car Insurance Before Buying
Auto insurance types can be confusing - you might think that if there's an accident or something bad happens to you in your vehicle, the company should just pay for whatever repairs or expenses you have and that would be the end of it. That is the way a policy used to work, in fact; the problem is that it was far more expensive than it is today. By splitting policies into different types of coverage and allowing consumers to choose a la carte providers can charge only what is required based on customer choice and not for protection they will not need.
Comprehensive pays for those incidentals that may happen outside of your typical automobile accident. If your car is stolen, comprehensive insurance will take care of it. If your vehicle is damaged, vandalized or destroyed while it is parked, that would fall into comprehensive coverage (assuming the policy of whomever damaged your vehicle didn't take care of it. Comprehensive is not required by any state laws, but if you are leasing your automobile or buying it on a loan, you may be required by your lender to purchase and maintain coverage.
Just like its name implies, collision coverage is your security blanket if you get into an accident and your car needs repair. Since state laws mandate that every auto on the road be taken care of by liability protection, the odds that you will need collision have gone down considerably, and therefore, so have the prices for this type of protection. Collision only kicks in to pay for your vehicle damage if you are at fault in an accident in another vehicle, (your liability pays for their repairs and expenses, while your collision will pay for yours), or if you are involved in an accident that is you're your fault and the other driver does not have a policy or you cannot collect from it for whatever reason. Collision is another type of add-on that is not mandated by state law, but may be required by your auto loan lender or auto leasing company.
Liability protection is required by state law for any driver or vehicle on public roads or highways. It covers, up to its limits, the medical expenses of those you are involved in an accident with if it is your fault and also pays for needed repairs to their vehicle or property. Driving without liability yields stiff penalties under the law if you are caught by the authorities, which becomes more likely every year as auto insurers are required to report a lapse in coverage to your state department of motor vehicles.