Physical damage coverage is a category of auto insurance that may help pay for covered damage to your own car. Unlike liability coverage, which helps pay for injuries or property damage you cause to others, physical damage coverage applies to your own vehicle after certain covered events. It generally includes two types of coverage: Collision and comprehensive.
Understanding what physical damage coverage is can help drivers better understand how repairs to their own vehicle may be handled after an accident or other covered loss.
What does physical damage coverage include?
According to the Insurance Information Institute, a basic auto insurance policy is made up of several types of coverage that are priced separately. Physical damage coverage refers to the portions of a policy that may help pay for damage to the policyholder's own vehicle.
- Collision coverage: May help pay for damage to your vehicle if it collides with another vehicle or object, regardless of who is at fault.
- Comprehensive coverage: May help pay for damage caused by events other than a collision, such as theft, fire, hail, flooding, vandalism, or striking an animal.
Each of these coverages typically has its own deductible, which is the amount the policyholder pays before the insurance coverage begins paying for a covered claim.
Is physical damage coverage required?
Physical damage coverage is generally not required by state law. However, if your vehicle is financed or leased, the lender or leasing company may require both collision and comprehensive coverage until the loan or lease agreement ends.
Once the vehicle is paid off, keeping physical damage insurance is typically optional. Some drivers continue carrying collision and comprehensive coverage because it may help pay for damage to their own car if a covered event occurs.
How does physical damage coverage differ from liability coverage?
Liability coverage and physical damage coverage serve different purposes within an auto insurance policy. Liability coverage may help pay for injuries or property damage you cause to others in an at-fault accident. Physical damage coverage, on the other hand, may help pay for covered damage to your own vehicle, subject to your policy's terms, limits, and deductible.
To learn more about how these coverage types compare, read the difference between liability, collision, and comprehensive coverage on the Infinity Insurance Agency, Inc. (IIA) Knowledge Center.
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Whether you're looking for physical damage coverage, liability coverage, or a policy with collision and comprehensive coverage, IIA can help you explore your options. IIA works with over 20 insurance carriers, offering a variety of coverage choices, flexible payment options, and carriers that accept alternate forms of identification, including a matrícula consular, and foreign licenses. Our experienced Spanish-bilingual agents are available to answer your questions and help you find coverage that fits your needs and budget.
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