What Are the Most Common Types of Car Insurance?

In order for you to legally drive your car on the road, you must have car insurance. While insurance requirements range from state to state, there is usually a minimum amount of coverage required for both property damage and medical bills. Therefore, you might be asking yourself what type of coverage is right for you. This starts with understanding the types of car insurance that are available. While there are numerous options for car insurance, there are three major types. They include liability only, collision insurance, and comprehensive coverage.

Liability Only

The cheapest form of car insurance is called liability only. First, it is important for you to remember that your insurance is only going to kick in if you are blamed for an accident. Liability only is the cheapest form of car insurance that you can have and still legally drive your car. In the event you are blamed for an accident, liability only will pay to fix the other person's car but not your own. Therefore, liability only is also a risky insurance policy. If you are blamed for an accident and your car is totaled, it's gone and your insurance company will not give you a check. On the other hand, this is the cheapest form of insurance.

Collision Insurance

One of the most common types of car insurance is called collision insurance. This is a basic policy that pays to fix all vehicles involved in the event you are blamed for an accident. For example, if you run into the back of someone and you have collision insurance, this policy will pay to fix both vehicles. While collision insurance generally covers all forms of accidents, it usually does not cover ancillary damage. This might include damage due to theft, weather, or natural disaster. For the average person driving on the road, this is enough; however, if you chase tornadoes for a living, you will want the next level of coverage.

Comprehensive Coverage

The highest level of coverage is called comprehensive coverage. Also called "Act of God" insurance, this policy usually covers all forms of damage barring insurance fraud. If you are involved in an accident on the highway, comprehensive coverage will pay to fix your car. If a tornado picks up your car and deposits it in the next county, comprehensive coverage covers it. If your car burns in your driveway due to a house fire, comprehensive coverage will cover the car. While this is the most expensive type of insurance, it also provides the most protection.

Find the Right Insurance Policy for You

These are only three of the numerous types of car insurance; however, they are also the most common. It is helpful to take a look at how, where, and when you drive your car. This will help you decide which car insurance option is right for you.