Insurance in general can be confusing and not everyone has the time to dig for answers. So when it’s time to review or renew your auto insurance you should know what is covered and what is not.
This guide will help you understand comprehensive and collision auto insurance and give you the confidence to ask your agent the right questions. After all, the most important thing is being covered, right?
No one wants to discover that his/her policy only covers a portion of the costs after an accident occurs. Here are the questions you might be asking and the answers you need to find the right coverage for you.
How is comprehensive and collision auto insurance different than liability coverage?
Having full comprehensive auto insurance paired with collision insurance provides you with coverage for damage to your vehicle whether or not you are at fault.
Liability will only cover damage to other vehicles and their passengers that you are responsible for, and does not provide coverage for your car.
What does it cover?
When you have comprehensive insurance and collision coverage, your personal vehicle will be covered for theft, vandalism, hail and windstorms as well as damage when in an accident.
How is the cost for coverage determined?
The cost is determined by the age and value of your vehicle as well as the safety rating of your vehicle. They will also take into consideration your driving record and previous accident history.
Is comprehensive and collision coverage required?
It is not mandatory to carry comprehensive and collision insurance, unless you are still making payments towards the purchase of the vehicle. You may also discover that carrying the additional coverage for comprehensive and collision insurance may not be prudent based on the Blue Book value of the car itself.
Is there a deductible for comprehensive auto insurance?
Yes, there is a deductible, however, you set the amount based on the cost of the insurance itself versus the benefit.
Consider this scenario
You have just paid off you new car, and after 3 years of payments it is all yours. You are driving to the market after dinner to get snacks for your child’s classroom the next day, and you get momentarily distracted by your 6 year old in the backseat. When you turn back around, you find yourself accidentally driving over the medium, and completely damage the front end of your car, bend the front axle and destroy the rim and tire on the driver’s side.
There are no other vehicles involved and you get three (3) estimates that average $8,500.
Without comprehensive and collision coverage, you would be looking at 100% of the cost to repair the car. This money would be needed before any repairs can even begin. Do you have $8,500 available to you?
With comprehensive and collision coverage, you might have a $500 deductible, which would be the amount you would need to get your car fixed, and possibly, depending on the coverage you purchased, also provide you with a rental car for the week and half it would take to complete the repairs. These are the moments that separate an innocuous event from becoming an overwhelming financial burden.
3 tips for choosing Comprehensive & Collision Auto Insurance that meets your needs
(1) Consider the value of your vehicle. Remember that if a car is totalled, an insurance company would only pay out the Blue Book value of that car, based on the condition at the time of the accident. If the annual cost to add comprehensive and collision coverage is more than the value, do not purchase the coverage.
(2) You can have separate deductible amounts for both comprehensive and collision. These deductibles should be determined based on your financial needs. The lower the deductible, the higher the premium, however there is an amount that makes sense based on your needs and expenses.
(3) All finance companies differ, and may have restrictions as to the amount of deductible you must carry. Always check with your lender prior to purchasing comprehensive and collision coverage.
Still have questions?
No worries, our team is here to help. Give us a call and request a review of your auto policy now at (702) 897-4400 to discuss your needs.