What is the difference between liability coverage and collision coverage?
The basic difference between these two major types of coverage is that while liability coverage takes care of damages that you exact on another party, collision coverage will pay for damages to your own vehicle. If you are in an accident in which you are at fault, your liability coverage will pay for the other driver’s medical bills as well as any damages to their vehicle. Your collision coverage, if you have any, will pay for the damages to your own vehicle. Another important difference between the two is that while liability coverage is mandatory in New Mexico, collision coverage is not.
