Step 1 COMPREHENSIVE INSURANCE: Comprehensive insurance covers loss from incidents such as collision, theft, flood and accidental hit.
Not only does this insurance cover all the damage of your vehicle but it also covers the damage on the object that you hit.
Likewise, this insurance pays for the damage your vehicle gets when accidentally hit by someone else.
This insurance is considered the best coverage and usually required by most lenders when you are still in the payment process for your car.
Step 2 COLLISION: Collision covers for the damage your car gets from an accident, whether from hitting another object or being hit by another object.
Terms for this type of insurance may not include damage from flood or loss from theft.
Step 3 LIABILITY COVERAGE: This type of insurance is the least expensive.
When involved in an accident where you are held liable, this insurance will pay for the damage of the other vehicles involved.
It will also cover law suit legal defense in case the other party sues from the accident.
This type of insurance may not be purchased if you are still in the payment process for your car since most lenders often want the comprehensive insurance until the car is paid off and there is no remaining loan balance.
Step 4 DEDUCTIBLE: Deductible is the amount or portion of the insurance that you have to pay.
This amount must be paid before the insurer pays the insurance claim.
The higher the deductible, the lesser will the insurance cost be.
Step 5 UNINSURED OR UNDER INSURED MOTORIST: This may apply to any of the above mentioned insurance policy types.
This covers the damage you get from an incident wherein the motorist has no insurance, has an expired insurance or does not have enough money to pay you for the damages.
This may cover hit and run damage in some states.
This is very much preferred considering a lot of chances there may be for accidents involving motorists without enough coverage to pay for damages.