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Auto Insurance Benefits of Collision and Comprehensive Coverage
Types of Auto Insurance Coverage
Excluding basic liability coverage the most carried types of car insurance coverage are Comprehensive and Collision coverage. In this article we will explain what is included in each type of coverage and what there differences are. So, when it's time to get free insurance quotes you'll be ready.
Collision Coverage
Will pay for damages to your car from hitting another object, such as another car, tree, house or mailbox. This coverage is relatively expensive compared to the other coverages listed in your car insurance policy. Collision coverage is not required by law but may be by your financing or leasing company.
If you have an old car and it is not worth at least $2000, you might want to consider not buying collision coverage. You will likely pay more for the coverage than you would get if you filed a claim. This is because insurance companies are only required to pay for the lessor of either what the car is worth or the costs to fix it. They might deem you vehicle worth less than what it will cost to fix.
Comprehensive (Other than Collision) Coverage
This coverage will pay for almost all other damages to your vehicle including, theft, vandalism, severe weather, flood, fire, the hitting of an animal and glass including your windshield. This coverage isn't as expensive as collision coverage and is chosen by many consumers. This coverage is also optional and not required by law.
Remember if you decide to have collision or comprehensive coverage you will also have to choose a deductible amount from zero to $2500. The deductible is the amount you are responsible to pay before the insurance company pays there portion.
Basically, deductibles reduce your premiums because you agree to deduct a set amount from the claim your insurer otherwise would have to pay. Insurance companies offer deductibles because they reduce the number of small claims, which are costly for them to handle.
If you buy a new car and take out a loan the lending company will most likely require you to have collision and comprehensive coverage as part of your car insurance. The reason for this is because your vehicle is collateral for the money you borrowed and if they need to repossess your vehicle they need to make sure it will be worth what you borrowed.
If you are required or choose to purchase collision and comprehensive coverage, the easiest way to get cheap car insurance is to request the highest deductible you can afford. Remember, you will be required to pay that deductible amount if you file a claim that is your fault before the insurance company will pay for the rest of the damages.
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