Comprehensive and Collision Insurance
Comprehensive and Collision coverage are the two most common types of coverage for your vehicle. These types of coverage are not mandated by the state but may be by your loan or leasing company. The only type of coverage mandated by the state is liability coverage. Liability covers any of the damage to others that you are at fault for, up to your policy limits.
Collision Coverage:
Collision coverage takes care of damage to your vehicle, resulting from a motor vehicle accident. This can be an accident between you and another vehicle or between your vehicle and fixed property. Your collision coverage is applicable regardless of who is at fault for the accident. If the accident is your fault, you will have to open a collision claim if you want your vehicle repaired by your insurance company. If the accident is not your fault, you have the option to open a collision claim if you want. Assuming the person at fault for the accident has a valid auto insurance policy; your damage can be covered under their policy as a property damage claim. However, if you want your company to take care of the damages, they can and will then get reimbursed from the adverse party’s company.
Comprehensive Coverage:
Comprehensive covers your vehicle from any damage not caused by a collision. Examples of when this type of coverage would apply are if your vehicle is stolen, if your vehicle catches on fire, if your vehicle sustains damage from wind, a hurricane or any other act of nature and other situations where there was no collision. Just like collision coverage, comprehensive coverage is not mandated by any state agency. Like collision coverage, it is required if there is a bank interest in your vehicle.
Deductibles:
A deductible is the amount of money you will be responsible for when filing a collision or comprehensive claim. Deductibles range from $0 to a couple thousand dollars. The higher your deductible is, the lower your premium will be. The most common deductible amount is $500. Make sure you select a deductible you can afford. If you file a claim, you will be responsible for your deductible before insurance starts paying out. For example, if you have a $1,200 repair and your deductible is $500, then you will be responsible for paying the first $500 of the repair and then your insurance policy will cover the remaining amount.
This content is offered for educational purposes only and does not represent contractual agreements. The definitions, terms and coverages in a given policy may be different than those suggested here and such policy will be governed by the language contained therein. No warranty or appropriateness for a specific purpose is expressed or implied.