Collision and comprehensive coverages, which are known as physical damage coverage, pay for repair or replacement of your auto regardless of who is at fault.
Collision coverage pays if your auto collides with an object, including another auto.
Comprehensive coverage pays for damage to your auto from almost all other causes such as fire, vandalism, water, hail, glass breakage, wind and falling objects. It also pays if your auto or parts of the auto are stolen. However, there are usually some restrictions regarding coverage for electronic equipment and personal property or other vehicle modifications.
These coverages pay the actual replacement value of your auto if it is stolen or destroyed. Generally, this means that you will be paid only the current market value for your vehicle in pre-loss condition. The company will not pay the cost to replace your auto with a new, current model vehicle of similar quality and equipment. The company is not required to find you another vehicle.
If you finance an auto, the lender generally requires you to have this coverage until the loan is repaid.
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