Wednesday, April 30, 2008

Car Insurance Benefits of Collision and Comprehensive Coverage

Car Insurance Coverage

The most commonly recognized coverages, in addition to the basic liability are collision and comprehensive coverages also known as other than collision coverage. This article will explain the differences in coverage and what is covered.

Collision Coverage

Collision coverage will pay for damages resulting from an automobile accident where you collide with another object, such as another car or tree. The coverage is comparable expensive when compared to the other coverages included in a car insurance policy. Collision coverage is optional and isn't required by law, although a leasing are finance company my require it.

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 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.

When considering collision and comprehensive coverage, you should consider your deductible. A deductible is an amount of money you agree to pay as part of a claim before the insurer is committed to pay the rest of the claim. For example, if you carried collision coverage with a $200 deductible and you had a $500 loss, you would have to pay $200 and the insurance company would have to pay the remaining $300.

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 purchase a new car with a loan, the financial institution that loaned you the money might require you to purchase comprehensive and collision coverages. This is because they see your car as collateral for the loan, and they want to make certain it is worth something if they need to repossess it.

In the event you have to buy, or decide to buy, collision or comprehensive coverage, you can save money by agreeing to the highest deductible you can afford to pay in the event of an accident. However, because comprehensive coverage is usually cheaper than collision coverage, many people save money by dropping the collision coverage and keeping the comprehensive coverage to protect against natural perils, theft and glass breakage.



Joseph Welusz has written about numerous insurance issues. He is a licensed insurance professional that tries to help people find ways to save money on Car Insurance. He recommends getting insurance quote comparisons from QuoteMatcher.com click Cheap Car Insurance to go to QuoteMatcher.com.

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