There are typically three main forms of auto insurance, and while liability coverage is mandatory, the other options are not. There are also other optional coverage options available that are not covered below:
- Liability Coverage: Every motorist is legally obligated to carry a minimum amount of liability insurance. It covers you for any bodily injury or property damage caused to other parties due to an accident.
- Collision: This covers vehicles damaged in collisions. It is subject to a deductible and pays for the repair of a damaged vehicle or pays the cash value of the vehicle if it cannot be repaired. Although collision coverage is optional, you will probably have to buy it if you are renting a vehicle.
- Comprehensive: This is the most complete level of coverage. It is also subject to a deductible and covers vehicles damaged in accidents not deemed to be collisions. Examples of comprehensive losses include vandalism, theft, fire, and “acts of God,” which are events beyond human control, including hurricanes, floods, and tornadoes.
