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The Fundamentals of Car Insurance Coverage

Jan 19, 2008
Buying a car is not the end of the expenses related to the car. There are lots of other costs involved in maintaining the car that involves gasoline money, repairs required for the car, the regular maintenance of the car and of course, an insurance policy.

It is very important that you have insurance for your car. There are numerous types of car insurance coverage available today of which collision and comprehensive coverage are two of them. However, some states don't consider it necessary to carry this coverage on the insurance policy.

But there are some lenders who need this coverage till the car is paid off so that in case the car is totaled, the bank has the right to recover some of the amount that is lent to you. However if you have an old and beat up car, it may not be worth paying for the cost of collision and comprehensive coverage.

Collision coverage is the coverage that pays your medical expenses and property damage if you get involved in an accident where you are found to be at fault for the accident. The liability of the insurance pays for the other party. However if you have no collision coverage, you will have to pay all the expenses related to the damage incurred to you or the property, because of the accident.

In addition to this, collision coverage is useful if you get involved in a single car accident like running into a tree or going off the road. In other words, this coverage protects you in accidents where you are at fault for the accident.

The reason it is advantageous to have comprehensive coverage is because this coverage covers practically everything that is not covered by liability and collision coverage. Repairs incurred by vandalism, theft and other damage by hail can be made using comprehensive coverage. Such damages can be rather expensive, and this is why you should have comprehensive coverage in your car insurance policy.

There are different sets of levels of coverage you can choose from this insurance coverage. When choosing your level of coverage, you have to evaluate your needs. Depending on the worth of the car, the coverage usually spans from $50,000 to $250,000. Of course, the higher is the amount of money you expect the insurance company to pay you in case of an accident, the higher will be the premium amount you have to pay to the company.
In addition to the premium amount, you have to consider the deductible when choosing the level of coverage for your insurance policy. The deductible is the amount you will have to pay for damages before the insurance company pays the bills. The deductible amount may be as low as $20 or as high as $1,000; it all depends on your capacity. However remember that the higher is the deductible, the lower will be the premium amount you have to pay.

To sum it up, it is advantageous to have collision and comprehensive coverage included in your car insurance policy. With this coverage, you are sure you will receive protection in whatever type of accident you get involved in.
About the Author
Mark Robinson writes for Auto-Insurance.GuideFin.com. Visit his website for information about auto insurance.
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