Final answer:
Collision insurance specifically covers damages to your car resulting from an accident. It is one of several types of car insurance, which includes liability, uninsured motorist, and comprehensive insurance, each with its own coverage scope. When you purchase insurance, you pay premiums to protect against financial loss due to specified events.
Step-by-step explanation:
Insurance that covers damage to your car from an accident is called collision insurance. This type of insurance is designed to cover the cost of repairs to your vehicle if you're involved in a collision, regardless of who is at fault. Other types of car insurance include:
- Uninsured motorist insurance: Covers your costs if another driver is at fault in an accident and doesn't have insurance.
- Comprehensive insurance: Pays for damage to your car that happens due to events other than collisions, such as theft, vandalism, or natural disasters.
- Liability insurance: Covers the costs for injuries and property damage to others for which you are legally responsible in an accident.
Insurance policies are agreements where you pay premiums to an insurance company, and in exchange, the company pays for certain types of damage or loss as specified in your policy.