Car insurance can be confusing, a lot of the terms are written by lawyers to protect the company from having to pay out on claims because of in accurate wordings. However, for the average person trying to navigate their own policy and know what they’re paying for, it can be incredibly hard to decipher. Basically, there are three sections to your coverage, each of those can be broken down further, but there is liability, comprehensive, and collision car insurance coverage.
Liability Covers What You’re Responsible For When It’s Your Fault
When driving your car you can damage property, other cars, injure people in other cars, and injure people in your car. Liability basically covers all of those scenarios, each part has a different name and some states have slightly different rules, but in general that’s it. However, your own car’s physical damage is not covered under liability, unless another person hits you, then their liability property damage will repair your car.
Comprehensive Car Insurance Covers The Physical Damage To Your Car
Comprehensive will cover almost any type of loss to your car that isn’t caused by an accident. That would include hailstones, water damage from floods, vandalism, theft, theft of your stereo, window damage, fire damage and nearly any other type of damage. But, it won’t cover anything that looks like an accident, whether your car was hit by a phantom driver in the night, or you run into your garage door, accidents aren’t covered under comprehensive.
Finally You Get To Collision Car Insurance Coverage
This is designed to cover your car in the event that you have an accident that is your fault. It doesn’t matter if you hit another car, a wall or the ditch, collision is what covers you. This is a fairly expensive part of your insurance, and it gets more expensive based on how expensive your car is to fix. Cars that are newer, more expensive to buy, imported cars, fiberglass body cars, and other special types are more expensive to insure because repairs are more expensive.
In addition, some cars pay a surcharge on collision because they are involved in more accidents than normal. Sports cars, high performance cars, and other popular specialty cars all pay more for collision coverage. If you raise your deductible, you can absorb some of the risk yourself and pay a lower rate on a monthly basis. But, if you have an accident with a $1,000 deductible, you’ll pay the first $1,000 of any repairs needed.
Understanding your car insurance coverage is important so that you know what you’re paying for and aren’t surprised when you go to file a claim, only to find out it’s not covered. If you have questions you should always have your agent explain everything to you, about once every six months to stay on top of any changes.