Liability vs. Collision: What’s the Difference?

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There are many different types of commercial insurance, and it can be hard to tell them apart. Some types of insurance cover you, while some types cover other people. Some types offer comprehensive coverage, while some cover relatively niche circumstances. At Los Angeles Truck Insurance, we get questions every day regarding all kinds of insurance and what they do. One of the biggest questions we get is about liability insurance vs. collision insurance. These often get mixed up, but they do very different things. In this article, we’ll tell you just what the differences are and why both kinds of insurance are essential.

Who they cover

The most obvious difference between liability and collision insurance is in who they cover. Liability insurance covers third parties, i.e., the other person involved in an accident with you. It does not cover you or your truck at all. For this reason, liability insurance is a legal requirement for vehicles in the state of California. The state wants to make sure that no one is financially ruined because of a crash they’re not responsible for.

In contrast, collision insurance is for you. It covers damage to your vehicle in the event of a crash, no matter who is at fault. For companies, this makes collision insurance a must. While there is a legal mandate to obtain liability insurance, no such mandate exists for collision insurance. However, if you’re a business owner with commercial vehicles, collision insurance is a must-have.

How much do they cover

The other major difference in the liability vs. collision insurance comparison is in the extent of coverage. Liability coverage covers property damage, lost property, and even the medical bills of the other person involved in a crash. Liability comes with fairly comprehensive coverage overall. On the other hand, collision covers only damage to your vehicle. Collision covers physical damage to the vehicle itself, while liability covers everything. This is why we suggest med pay insurance, which covers your medical bills. That way, you’ll know that both you and your vehicle are covered in case of an accident.

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