There are two main types of coverages for auto insurance policy: Collision and Comprehensive. So what is the difference between the two?
This helps you pay for the damages caused by collision with another vehicle, collision with a stationary object such as a tree or street signs and a vehicle rollover. This protects you whether the car damage was your fault or not. If your car is being financed or leased, you are required to have the collision type.
Comprehensive coverage, on the other hand, helps you pay for damages and losses not caused by a collision. It covers damages caused by theft or vandalism, fire, blizzards, hail or wind and falling objects, such as a rock or tree. This type protects you from damages that do not involve other vehicles and other drivers, like in a car accident.
Both Collision and Comprehensive are subject to deductibles. Aside from what the policy covers, a factor that a first time car owner should consider is the premium or the base rate. The premium of the car depends on the car itself, the higher the car rating the more expensive the premium will be.
The Department of Insurance requires every motorist to own a policy so if it is your first time to own a car, you better take good care of it and purchase a good package that best suits your needs and budget.
Are there benefits to having comprehensive and collision coverage on my car?
If you still owe money on your vehicle or are leasing it, your lender will require you to continue physical damage coverage – meaning comp and collision – until the loan is paid in full or until you complete your lease term.
For everyone else, the general rule of thumb is: if your car is older than ten years, consider removing your collision coverage. But remember to decide for yourself by investigating the value of your car. Your car’s current market value is close to the amount you might receive if your vehicle is totaled. If you can leave that amount of money on the table and walk away if someone steals your car or if it is a total loss, you can consider your options and decide if you want to have comprehensive and collision coverage or if you feel comfortable not having coverage. Many people continue to carry full coverage long after a car’s 10th birthday.
Keep in mind, if you do carry optional glass coverage, dropping comprehensive coverage can mean losing that as well, and glass can be expensive to replace. That’s just one reason why going without physical damage coverage is a big decision to make only after careful consideration. Better yet, talk to Steven to discuss your insurance options so you can decide what coverage you want.
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