Understanding Auto Insurance: liability, comprehensive, and collision

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Understanding Auto Insurance: liability, comprehensive, and collision

 There are many terms the car owner needs to know; for example, just what exactly is a head gasket and why should one care?  However, there are none perhaps more vital to the security of the pocketbook than the language surrounding auto insurance. There are three words one must understand: Liability, Comprehensive, and Collision.

 Liability: Liability is one’s protection against being sued and sustaining personal injury and loss for the outcome of an accident.  This is the protection for the driver that covers both medical care for injuries sustained in an accident as well as legal protection from being sued. 

 Comprehensive: Comprehensive coverage protects the insured’s vehicle from loss when the car is not in motion.  For example, comprehensive coverage includes losses sustained due to fire, theft, vandalism, falling objects, and the rock that hits and cracks the windshield. 

 Collision: Much as instinct tells one, collision insurance covers the car and driver when the car causes damage while in motion.  Damage sustained due to a loss while driving would be covered over the policy deductible.  For example, if $4000 damage has been sustained, then the driver with a $500 deductible would receive payment of $3500 to repair the car: $4000 – $500. However and here again, do check with the broker as to how comprehensive the policy actually is.

 All drivers want to have liability coverage and protections whereas comprehensive and collision coverage depend on the value of the vehicle.  In other words, people are always worth insuring from harm, but some cars are not worth the investment of collision and/or comprehensive automobile coverage.

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