Liability Insurance:
Coverage: Liability insurance covers bodily injury and property damage that the policyholder is legally responsible for in the event of an accident.
Description: This is a mandatory coverage in many jurisdictions. It helps pay for the medical expenses, property damage, and legal fees of the other party involved in an accident if the policyholder is at fault.
Collision Insurance:
Coverage: Collision insurance covers the cost of repairing or replacing the policyholder’s vehicle if it is damaged in a collision with another vehicle or object.