If you own a car, you most likely already have car insurance. In fact, in almost every state drivers are obliged to have at least auto liability Insurance coverage. However, since there are many different types of insurance coverage, I will show you what collision and comprehensive car insurance covers and what it does not cover. This way, you can make a smarter decision regarding the type of insurance you need for your personal situation.

Collision and comprehensive coverage are not mandatory, but if your vehicle costs more than $5,000 it may be worth it. Also, if you are buying a vehicle with a car loan or financing, the lender may oblige you to carry collision insurance until the debt is paid off. Even though collision and comprehensive coverage is generally sold as one, let's separate them for a moment so that we can take a closer look at what each one covers.

Collision insurance covers physical damage to your vehicle caused by a collision with an object or another vehicle. For example, if you are driving and you hit a fence, or a light pole and your car is damaged, collision insurance will cover the costs. If you crash into an animal, this type of insurance will not cover you. To be covered for impacts against animals, you would need comprehensive insurance. That's why these two types of insurance are generally sold together as one.

Comprehensive insurance covers damage to vehicles that are not considered collisions. For example, if you run into a deer, or any other animal, you would receive coverage from your comprehensive insurance. It also covers theft (or attempt of theft), weather-related damage (flood, tornado, storm, etc), vandalism, and fire.

Collision and comprehensive insurance is subject to a deductible, and is designed to cover the repair or cash value of the vehicle if it is damaged or totalled. If your vehicle is not worth much, it may be wise to skip this type of insurance since it will raise the cost of your insurance premiums. However, if your vehicle is new or expensive, it is definitely a smart idea to purchase collision and comprehensive coverage in addition to your auto liability coverage.

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Most insurance companies require you to purchase collision coverage together with comprehensive coverage, but there are some companies (very few) that will sell comprehensive only policies. So, while it is your decision to choose both types, or only comprehensive, it is advisable to choose both since it offers greater protection.

An easy way to remember what comprehensive and collision coverage covers is that collision covers impacts with non-living things or vehicles, whereas comprehensive insurance covers impacts with animals, damages you can't prove whose fault it was (theft, vandalism) and weather-related losses.

If you are renting a vehicle, it is necessary to purchase collision insurance for the rental period. This way you will avoid having to pay thousands of dollars in case of accident, and in any case, it is almost always required by car rental companies. Generally, the term for collision coverage used by rental car companies is CDW (Collision Damage Waiver) or LDW (Loss Damage Waiver) and it also includes comprehensive coverage. Some of the best credit cards offer free car rental insurance along with the credit cards, you can read more about the best credit cards for free car rental insurance here.

And of course, as with any type of insurance, it is very important to shop around to make sure that you get the best car insurance rates for the coverage you want. Here at GET.com, we've done the work for you and gathered all the best car insurance companies in the US for you. So, just enter your state in the box below to search for the best car insurance now!

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