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An Explanation of Collision and Comprehensive Coverage

May 27, 2008
It cannot be emphasized enough how important car insurance is. It is that layer of protection that protects you in the case you are in an accident with an uninsured driver or you are cited to be at fault for the accident. However, what it protects you from is being responsible for your own medical and property damage costs when the other driver is uninsured and also protects you from a lawsuit if you are judged to be at fault for the accident. There are two types of insurance that you will become familiar with and those are collision and comprehensive coverage.

Collision

Collision coverage covers you when your car hits another vehicle or is hit by another vehicle. It even covers you if you are hit by an object. For example: If something falls off the back of a truck in front of you on the highway and hits your car, you are covered under your collision coverage. You choose the deductible that you afford. The higher the deductible, the lower the premium, but you must make sure that it is a deductible that you can pay at anytime because you never know when damage may occur to your vehicle. If the car is an older car, then the coverage may be for the amount the vehicle is worth. If you have a loan on your car, then the lender will require that you have collision insurance.

The protection that is provided can be quite significant as long as the vehicle is not a total loss. Depending on what your state considers a total loss in damage to the car is going to depend on whether or not the insurance company is going to pay for the repairs. If they are, let's take for example damages that are $1,500 and you have a deductible of $500. This means that you will pay the $500 deductible and the insurance company will pay the $1,000 difference in the repairs.

As stated before, this coverage comes in handy if you have a loan on your vehicle. Even if you don't have a loan, if the car is newer, you may want to make sure you have collision coverage since the repairs can be costly on newer cars. However, this coverage may not be necessary for older cars.

Comprehensive

Comprehensive coverage covers your own vehicle and other vehicles that you may be driving when an accident other than a collision accident occurs. Basically what comprehensive coverage takes care of are theft, flood, fire, and even damages inflicted by animals. Just like with collision coverage, the higher the deductible the lower the premium is going to be. However, it is important to pick a deductible that you are comfortable paying if something were to occur.

The protection method works the same way as with collision. If your car sustains $1,500 in damage and your deductible is $500, then the insurance company will pay $1,000. Comprehensive coverage is not insurance that is required by the state, but it may be required by a lender if there is a loan on the vehicle. Even if you don't have a loan and the vehicle is fairly new, you may want to have this coverage since repairs for newer cars can be quite extensive. Thos with older cars or cars that are not in good running condition may not want to have this type of coverage.

Importance

So as you can see, having collision, comprehensive, or both can be quite important depending on your situation. Just make sure that you are in compliance with state law and have deductibles that make you comfortable.
About the Author
All our home, travel and car insurance products include standard coverages with options and deductibles that can be adapted to suit your needs. Visit us to receive your car insurance quote.
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