Auto insurance doesn't always cover every aspect of a collision. It depends on your policy and coverage options. Even when you think you know what your insurance will cover, it helps to know a little about how collision coverage works.

Liability Coverage Has Nothing to Do With Your Vehicle

If your insurance consists mainly of liability coverage, then your actual car doesn't have much protection. Liability covers property damage and pays medical bills if there's an accident. Your liability coverage will not repair your car, or replace it.

What are Your Optional Coverage Choices?

Having a car fixed or replaced usually comes with optional coverage. If you choose your auto insurance without looking too deeply at the coverage options, you may find you're lacking anything that deals with physical damage to your vehicle.

Alternatively, you may find that you have some coverage, but not as much as you thought. Look for "collision," and "comprehensive" coverage options.

Collision Coverage

Collision covers damage to your car if it's in an accident with another vehicle. It can also cover repairs if you accidentally hit a stationary object. The coverage is only for the repair of replacement of your vehicle. If you damage another car or someone's property, your liability insurance will handle it.

Comprehensive Coverage

Comprehensive coverage deals with damage to your car from things other than a collision. These are the types of accidents that are beyond your control. They can include

• fires,
• vandalism,
• natural disasters,
• and other things outside of your direct control.  

For example, if a storm causes some debris to hit and damage your car, comprehensive coverage will take care of the damage.

Some, All, or Nothing

Many insurance carriers offer comprehensive and collision coverage separately, or as a package. As with most forms of insurance, how much any of these options will cover depends on how much or how little coverage you pay for. Because of the optional nature of these coverage options, you have to evaluate if you even need it at all.

Insurance companies base coverage on the fair market value of your vehicle. So, if you have an older vehicle, you may end up paying more for the coverage over time than the vehicle is actually worth. If you have enough money to replace your older vehicle, you can save money on your insurance by leaving the collision coverage out.

If you are still paying for a car, or leasing one, you may have to add collision and comprehensive coverage whether you want to or not. To stay on the safe side, make sure you pay close attention to your coverage options. Speak to an auto insurance company about which options will work best for you.