There are so many types of car insurance that it can sometimes be really confusing to figure out which type of car insurance covers what. Collision car insurance and liability car insurance are two similar coverage options that may be posing you some problems.
Liability car insurance covers your boo-boos to someone or something else, like if you run into somebody’s back end or hit someone while turning left when they had right of way. It also covers the poor stop sign that was standing at the street corner begging you not to hit it and the guard rail that was just trying to keep you from falling into a ditch somewhere. Liability car insurance also takes care of some payment for bodily injury.
Liability insurance, however, does not cover any damage to your sweet car. Poor baby.
Collision car insurance covers your car whether or not the accident is your fault. However, collision car insurance probably doesn’t pay for your medical bills, the innocent stop sign, or the ambulance ride to the hospital. Auto insurance providers vary on this a little, so it’s important to find out exactly what their collision car insurance does or does not cover.
Liability insurance is required in most states but is still a good idea to have even if your state doesn’t require it. Liability will help you out if you get sued as it does cover your legal defense costs.
Collision car insurance is not required in any state and is instead optional. It covers only the cost of your vehicle minus the salvage value. So, if your car is worth $5,000 and can be salvaged for $400, your collision car insurance only needs to cover $4,600. With collision car insurance, you’ll still have to pay for the damage you cause to any inanimate objects, but it’ll really help you out if financing a new vehicle is your only option.
Liability car insurance is really something everyone should have–not matter how good of a driver you are. Collision car insurance is a great backup plan, especially if your vehicle is not a hunk of junk. If you find that you are not a very focused driver, are getting older and have a slower reaction time, or if you tend to fall asleep at the wheel (or have a job that requires enough driving that you might do so), I highly recommend collision car insurance.