Let’s face it. Most of us would much rather be strapped to a dentist’s chair than shop for car insurance. It’s over a lot quicker, and what’s more you don’t have any decisions to make—that much is up to the doc’s expertise. Not so with car insurance, where the less you know about the different types of coverage, the worse off you are. Here’s a quick rundown of the most common coverage options offered by car insurance companies, and what they mean.
This is not legally required, but most lenders will require that you have collision insurance as a condition of your car loan. It always comes attached with a deductible, and covers damages up to your car’s book value.
This pays out damages against bodily injury or property damage that happens if you’re at fault for an accident.
This is important because of the high rate of people driving around without insurance. It covers medical bills for you and your passengers in the event that you’re hit by someone that doesn’t have insurance, or whose insurance isn’t enough to cover the damages.
This term is used to describe “everything else.” It covers damage to your car that didn’t happen as the result of an accident—such as fire, flood, earthquakes, high winds, vandalism, and even unexpected run-ins with animals (deer being the most often reported). Comprehensive also covers you against theft and, like collision insurance, comes attached with a deductible.