Collision insurance policy covers the policy holder's car in case of an accident. The accident can be of both natures, i.e. you hit someone or someone else hits your car. The repair of the car is paid and in case of a totaled car the cash value of the car is paid to you. The payment given to you is calculated with a deductible subtracted from it if you choose too. A tip here is \that if you want to keep the premium amount minimum than you should chose larger deductibles if you can pay out of your pocket. For old cars this coverage is not a good to purchase as it is limited to only the cash value of the vehicle.

Comprehensive

Comprehensive insurance policy covers the damages to the car due to weather, animals, fire, storms, or other incidents such as theft or vandalism. These are not included into accident category that is covered under collision policy. It also pays the damages minus the deductible that you choose just like in collision insurance policy.

Medical Payments

This coverage will pay the expenses of treatment for the injuries of passengers involved in the car accident.

Uninsured/Underinsured Coverage

It covers the damages if the fault party that has hit you doesn't have any insurance or it is not enough to pay for the damage. This is one of the important coverage to have because many motorists are either not insured or have small coverage.

Loan/Lease Payoff

It is also known as GAP insurance and it is used to fill the gap between the cash value of the car and the money that is left to be paid to the bank or the company that provided leasing. There is a significant decrease in the value of the car in a short time therefore it is a good coverage to have.

Car Towing Insurance

This insurance is for road side help in cases where car is out of gas, flat tiers, any mechanical or engine faults etc. most insurers will only include this service in the insurance package for the cars that are not drive able due to accidents. In other cases you will have to get the coverage.

Difference between Cancellation and Nonrenewable

There are two things that you will have to take into consideration before taking out any insurance. One is cancellation and nonrenewable. In case the insurance company decides that they don't want to give you insurance any more then they will cancel it. The second one nonrenewable is the one in which the insured neglects to pay the premium. It may happen because of too many claims, faults or road tickets in the last 3 to 5 years. In case of false information the policy can be cancelled so that should be the least thing to do. If the license gets revoked due to intoxicated driving etc then the policy can be cancelled by the insurance company. You spend a lot of money in purchasing a policy so be careful in taking care of both the above explained terms. The decision of buying the insurance is at your discretion. But our advice to you is that you should lay down your budget and requirements before choosing any type of coverage. The insurances coverage above are limited to the terms and conditions that are laid down in the policy so be careful to read the fine paper before buying the coverage.