Physical damage insurance is a type of insurance coverage that protects your vehicle from a variety of damages such as collisions, vandalism, fire, and theft. It is typically included in commercial auto insurance and is required by lenders for leases and loans. Physical damage insurance only covers physical damage to your own vehicle, up to the policy limits and under the policy terms. It does not provide coverage for bodily injury or for third-party losses. Insurance companies typically offer collision insurance and comprehensive insurance separately, but you can bundle your auto insurance coverages. Collision insurance provides protection in case of a collision, while comprehensive insurance insures against damage caused by something other than a collision, such as fire, theft, vandalism, falling objects, and weather events. Physical damage insurance policies provide coverage for actual cost value, which means that if your car is a complete loss, you may be reimbursed for the current value, minus the deductible, not the replacement cost. Physical damage insurance is optional if you have completely paid for your vehicle, but if you lease or secure a loan for your vehicle, your lender will likely require that you carry physical damage coverage.