The Difference Between Liability and Collision Insurance Coverage

There is such a wide variety of car insurance coverages that it can be difficult to figure out what covers what. Two coverages that can be difficult to differentiate between are liability and collision. Here are the main differences between the two:

Liability Car Insurance

Guardrail CrashThis insurance covers damage that you might cause to other people and/or inanimate objects. For example, if you hit someone’s car while turning left when they had right of way, liability insurance has got you covered.

Liability also covers the stop sign that was begging not to be hit as well as the guardrail that was just trying to keep you from falling into a ditch. Liability car insurance also covers some payments for bodily injury. On top of that, it also covers costs for legal defense if you are sued due to a vehicle related accident.

Liability insurance, however, does not cover any of your own injuries or damage to your vehicle.

Collision Car Insurance

Collision car insurance covers your car whether or not the accident is your fault. However, collision car insurance won’t pay for your heaping medical bills, the general damage to signs or guardrails, or the ambulance ride to the hospital. Auto insurance providers vary somewhat on their coverage, so it’s probably a good idea to find out exactly what is covered by their insurance plan.

It’s also important to note that collision covers only the cost of your vehicle minus the salvage value. So, if your car is worth $10,000 and can be salvaged for $1,000, your collision car insurance only covers $9,000. With collision car insurance, you’ll still have to pay for the damage you cause to any inanimate objects (such as helpless road signs), but it’ll really help you out if financing a new vehicle is your only option.

In Conclusion

Liability car insurance is something everyone should have–not matter how good of a driver they are. Collision car insurance is a great backup plan, especially if your vehicle is not a hunk of junk and you find that you are especially susceptible to crashing…