Anyone who has ever been involved in an accident or an incident involving a vehicle can verify that having good car insurance is very important. A lot of people wonder why they would ever need insurance...after all, they're perfect drivers. All it takes is one costly incident for a person to change their tune quickly, however. On top of the fact that driving without insurance is illegal, getting into an accident without insurance can be very, very costly. Even a small fender bender can cause thousands of dollars in damage to each vehicle as well as considerable monetary damage to property around the accident scene.
Car insurance protects people from most liability in the event of an accident. There are liability limits, but for the most part, insurance will cover all damages, minus a driver's deductible. These limits are set by the driver when the policy is created, but for the most part, all damage will be covered in the event of an accident. When shopping for insurance, there are different policies a person needs to consider, though. Liability, comprehensive, and collision are the three main types of insurance coverage, and they all play an important part in protecting a driver.
Liability insurance is the only policy required by law. Liability covers any damage done to other people, vehicles, or property by a driver. It doesn't cover damage done to a driver's own car or property, but liability makes sure that no one else has to suffer financial losses due to neglect or carelessness of the insured driver. All states require that any licensed driver who uses a public road to have liability insurance, regardless of any other factors. Liability insurance covers both the property and medical bills of people involved in accidents with the insured driver.
Collision insurance covers damage done to a policyholder's vehicle in an accident. This is not required on all vehicles, but if a vehicle is financed, it is necessary to have collision insurance. Collision insurance covers any damage done to a person's vehicle, regardless of fault. Typically, the driver sets the deductible anywhere from $0 to $1000 depending on his / her financial situation, and this is all that has to be paid in the event of an accident.
Comprehensive insurance is a catch-all that covers any damage / destruction done to a vehicle outside of a wreck. Storm damage / break-ins / flood damage / etc are all covered by a comprehensive policy. This insurance is not required by law, but can come in very handy if something happens outside of an policyholder's control.
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