Car Insurance: Does it Cover the Car or the Driver?

This can be a confusing question for most people, and you’re not alone if you find yourself struggling to answer.  In essence, both are correct.  Generally, people would like to say that car insurance is exactly that – insurance for the car.  However, it’s a little more complicated than that.  There are, for example, portions of your policy designed to cover the auto, and coverage designed specifically to protect the driver.  An auto policy can be tailored to your own specific needs or priorities and/or state requirements.  Here, we discuss a little about the different types of coverage:

Car Coverage:

I think most of us are familiar with the term “comp and collision”, but not everyone understands what they mean, exactly.  Comprehensive (comp) coverage will help cover the cost of damage to your vehicle caused by something other than a collision.  For example, theft and fire, vandalism, falling rocks and debris, etc. Comprehensive coverage is also what you would rely on to repair or replace your vehicle if you hit an animal with your vehicle.  Collision insurance is designed to help cover the costs associated with damage to your vehicle caused by a collision, whether it be crashing into another car, building or object.   The comp and collision portions of your car insurance “follow your car”, meaning your car is protected if you loan it to another licensed driver.

Driver Coverage:

The liability portion of your policy helps to pay for any injury or damage that arises from an accident that you cause.  This is the insurance that most states require drivers to carry (whereas comp and collision are optional).  When you cause an accident or do damage to another person or their property, you’ll be held liable for those damages. The costs associated with injuries and property damage can be extremely expensive.  In order to fully protect yourself, you should carry enough liability insurance to protect your own personal wealth and assets.  Liability insurance also helps to cover your legal fees in the event of a lawsuit.  Liability insurance also protects you when you drive another person’s vehicle, or a rental car.  The liability insurance portion of your policy “follows you”.

For more information about auto insurance, or to have your specific questions answered, contact me today.

Content provided by:  DMV.org; Enhanced Insurance