What’s the Difference Between Liability, Collision, and Comprehensive?

What’s the Difference Between Liability, Collision, and Comprehensive?

Shopping for auto insurance in NM? Understanding the basic components of a vehicle policy can help you choose the best type to meet your needs. Here’s a quick breakdown of liability, collision and comprehensive coverages, along with what types of claims each one usually handles.

Liability: An Insurance Basic

The liability component of your policy pays for damages related to third-party personal injuries, death and property damage resulting from an automobile accident. For vehicular insurance in NM, the state has set down the following minimum coverage requirements:

  • $25,000 for death or bodily injury of one individual
  • $50,000 for bodily injury to or death of two or more people
  • $10,000 for property damage in a single accident

Collision: An Essential for Auto Repairs

The collision portion of your policy repairs damage to your vehicle caused by an accident. If the havoc wreaked on your vehicle is deemed serious enough, it may reimburse for a replacement. While this is optional for people who own their vehicles outright, individuals paying on a loan or lease are required to carry collision coverage.

Comprehensive: Beyond Auto Accidents

If your car is stolen or damaged by vandals, fire, water and other kinds of severe weather, your comprehensive coverage will usually foot the bill. Should you have the misfortune of going bumper-to-bumper with an animal, comprehensive kicks in for those repairs as well.

Selecting a full-coverage package for auto insurance in NM is essential, especially if you’re still paying for your vehicle. A trustworthy agent can guide you to your best, most cost-effective options.

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