What is Liability and Collision Insurance?

So you know you need to take out insurance for your car – even if you think that you are the best driver in the country, there are other drivers out there who are not a brilliant on the road as you are – and you need to be protected right? So now, you have been hearing all these insurance terms – liability insurance, collision insurance, when all you want is straightforward car insurance… No wonder you have a splitting headache! No need to worry, it is pretty straightforward and soon you will be the one intimidating insurance salesmen and not the other way around.

What is Liability Insurance?

Let’s start with liability car insurance, or simply, liability insurance. Liability insurance covers you for claims that arise out of situations or accidents where there is bodily damage or damage to property. There are normally three main parts of any liability car insurance policy and they are: liability coverage for damage to property, bodily coverage and uninsured coverage. Liability coverage for damage to property will cover you for any damage to property that you make while you are in the insured vehicle and involved in the particular accident – you run into someone’s wall after you swerve for whatever reason and now need to cover for the repairs to the wall, for instance. Bodily damage will cover you for any injuries sustained during the accident – you might have a broken arm or need to be treated for concussion, you might lose wages as a result of the accident– no one likes unnecessary medical bills or being unable to support yourself and this is where bodily coverage comes in and takes care of things. Uninsured coverage protects you in cases where you are not necessarily at fault but the person who is does not have insurance – you are still covered for any damages or losses as a result of the accident.

What is collision car insurance?

When you were reading about liability car insurance you might have been thinking, “But what about fixing my car?”. That is where collision car insurance comes in. Liability insurance does not cover you for damages to your car, but collision insurance does. Collision car insurance covers you in cases where you are in a collision with another object. This could be another motor vehicle or you could need to make use of some of your liability insurance and collision insurance if for whatever reason, you end up driving into a wall and need to the repair the wall and your motor vehicle. If you are buying a new car or are making payments to a financial institution in order to finance your car, you definitely need to add collision insurance onto your car insurance.

The last thing you want is to have spent all that money buying that brand spanking new Mercedes only to end up in an accident – now you are without a car and just lost a lot of money. You also do not want to end up in a situation where you owe a financial institution a large sum of money for a car that you no longer have due to an accident that happened. Getting car insurance that is right for you is crucial these days – times are tough and no one wants to be put in a tougher position. Take your time when deciding what type of car insurance to get.