All 50 states except for New Hampshire require vehicle owners to have liability insurance if they ever drive the automobile. Additional options include collision and comprehensive coverage. Many people opt out of comprehensive. They believe the odds are slim they will ever experience an incident that this insurance covers. It's important to consider this decision carefully because opting out of comprehensive carries the risk of a major expense.

Collision Coverage

Collision car insurance pays for repairs to the policyholder's vehicle when this person is responsible for the incident. In insurance terms, the definition of a collision includes two kinds of scenarios. One involves two or more moving vehicles in an accident. The second is the driver striking a motionless object. That might be a fence, utility pole, building, or another automobile. If the driver skids off the highway on a sharp curve and strikes a tree, the collision insurance pays for repairs.

Comprehensive Coverage

Comprehensive insurance is for damage that the owner did not cause, although it does pay for one type of collision. That would be a collision with a deer or other large animal. Insurers view the animal as the cause rather than the driver.

Several other situations can cause damage. Examples include vandalism, a tree falling on the automobile, and hail that leaves dents.

If somebody steals the vehicle and it cannot be located, comprehensive insurance pays the policyholder the fair market value. Typically, the insurer makes the payment after 30 days. After that time frame, the company assumes the car will never be recovered.

Full Coverage

When financing a vehicle purchase, the lending company always requires the buyer to have liability, collision, and comprehensive insurance. This is known as full coverage. If the automobile is stolen or declared a total loss, the owner is still responsible for making those financing payments. Comprehensive coverage would help pay off the loan. Whether financing or not, the owner will be out a substantial amount of money if a serious situation occurs.

People sometimes opt out of comprehensive coverage to keep their premiums lower. It's important to be fully aware of the risks involved with this decision. The owner must pay for repairs in the event of a severe storm or a serious vandalism incident. Damage can be severe enough that the car is unsafe or impossible to drive. If the vehicle is stolen, the person has to buy another one with no money from an insurer. Consumers may consult with an auto insurance agent to learn more.