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Liability Insurance vs Collision Insurance – Compare Them Both

Liability auto insurance covers damages to the other party that resulted from an accident in which you are at fault. This type of insurance mandatory in all states although the minimum coverage limits vary depending on which state you live. If you are ready to get car insurance quote, know that liability insurance includes two kinds of coverage.

new1 - Car-Insurance-QuotesBodily Injury and Property Damage Cover

Bodily injury liability coverage helps in paying the costs if there are people injured or killed during a covered accident that you caused. This is likely to include income loss, medical expenses and even legal fees in case you are sued. Meanwhile, liability coverage for property damage pays for the property of other people because of a covered accident. It can help in covering the expense of replacing or repairing a fence, vehicle or other property that is damaged during an accident.

Liability Coverage Limit

The minimum limit on car liability insurance is likely not to give enough coverage. These limits refer to the amount your insurance is likely to pay every event. For instance, if your property damage limit is $10,000 and you can damages worth $15,000 in an accident, you will have to pay the excess $5,000. The amount of insurance you purchase more than the legal minimum will depend on your assets and finances.

Collision Auto Insurance

Collision car insurance protects you against vehicular damages caused by a collision. When an automobile collision takes place because of contact with another vehicle, any object or animal, collision insurance covers the damages. This kind of insurance pays the repair costs for your vehicle that includes all damages inflicted on the appearance and functionality of the vehicle. Although collision insurance may not be a law requirement, it is a good coverage for car owners. Also, the majority of car dealerships and banks require this type of coverage for leased or financed cars.

Which Coverage You Should Choose

If you choose to buy liability auto insurance alone, be aware that although you are legally covered the damage to you own car is not. You may have to spend thousands to replace or repair the car you depend on a daily basis. Collision coverage is likely to help in paying for damages to your car should coverage apply. The combination of collision coverage and liability insurance will help in minimizing the risk of paying for repairs using your own money in some vehicular accidents following your deductible payment.

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By Smit Sanghvi