In general, legally required liability coverage makes up a large part of a car insurance premium. This part only protects other people and property on the road, not you or your car. You need to get additional insurance to go with the lowest coverage legally allowed to protect your losses. At this point collision and comprehensive coverage come into play.
To get paid for your losses when you collide with other cars and objects, including animals and traffic signs, you would need collision insurance coverage. Collision insurance would cover the insured whether or not they are at fault for the accident. It also provides for salvage, storage and scrap trucks if the car is badly damaged. It will generally cover the cost of repairs to the vehicle or its market value if totaled.
And fully comprehensive auto insurance covers any other losses your car may suffer. These are fire, theft, criminal damage, weather damage and other similar losses. In summary, comprehensive vehicle insurance covers everything except the collision. Comprehensive auto insurance typically does not cover acts of God, theft or vandalism by family members or employees, vehicle contents, tires, or damage due to improper maintenance.
Comprehensive auto and collision insurance are often offered as a package, although it is possible to purchase the two types of coverage separately.
In some cases, both parties may be required, particularly by auto loan providers. Auto loan providers basically like to get your money back if the vehicle is damaged in any way and will ask for insurance confirmation before advancing the loan. Plus, it will cover the borrowers, since the funds will be there to pay off the rest of the loan when the car is totaled.
Rates for those coverages are calculated in the usual way. The driver’s claims history, expected annual mileage, location and valuation of the vehicle will be considered. While new car owners might be encouraged to take these coverages, older vehicle owners should weigh the price of the insurance against the price of the car to conclude the viability of these insurances.