Comparing Comprehensive vs. Collision Auto Insurance

Finding the right car insurance policy can be a complicated process. There are multiple types of coverages that you can add to your policy. Your insurer will also assess multiple variables to help determine your rate. One of the most important decisions you’ll have to make when finalizing your policy is sticking to collision or adding full comprehensive coverage.

While liability insurance is considered the foundation of auto insurance policies, two other key components are comprehensive and collision auto insurance. Liability insurance covers you if you are responsible for causing property damage. Comprehensive coverage protects you when your car is damaged due to an accidental fire or inclement weather. You’re also covered if your car is stolen or vandalized. Collision coverage pays for your car’s repairs if it suffers damage due to an impact with another car or object. Generally, collision and comprehensive car insurance are offered as a package by auto insurance companies.

Policy Deductibles

Your insurance deductible is the amount of money you are obligated to pay towards a covered loss before your insurance takes over to cover the remaining balance. Collision and comprehensive policies both include deductibles. Any amounts you receive from filing a claim will be reduced by the amount of your deductible. Most deductibles are between $500 and $1,000. You have the option to increase your deductible to even higher amounts, which lowers your insurance premiums. However, setting a high deductible is not recommended unless you have financial stability. Be advised that some insurers offer diminishing deductibles to customers who practice safe driving habits. You can expect your deductibles to decline if you haven’t filed a claim in three years.

Maximum Payout

In regards to comprehensive and collision auto insurance, the maximum pay-out is the value of your car before it suffers extensive damage minus the deductible amount. An insurer may classify your car as totaled if it is no longer safe to drive and the repairs cost more than the total value of the car. If you have recently purchased a new car and it gets totaled, keep in mind that the new technology installed in these cars makes them expensive to repair.

Are Collision and Comprehensive Insurance A Necessity?

If you are leasing or financing a car, the company will likely ask you to purchase comprehensive and collision auto insurance. The lender will likely mandate that you purchase this coverage so you won’t default on your loan if your car is stolen or totaled. Once you have finished paying off the car, you’ll have the option of whether you want to keep comprehensive and collision auto insurance on your policy. Even if you aren’t required to add the coverages, they are still beneficial because they provide another layer of protection if an emergency arises. However, keeping comprehensive and collision coverage may not make financial sense as your car starts to age. Your maximum insurance payout decreases as your car gets older.

Possible Exclusions

While comprehensive and collision auto insurance covers a wide range of potential risks, there are still potential exclusions on your policy. Collision and comprehensive coverage won’t protect you if you suffer injuries in an accident. You’ll likely need to add medical payments insurance to cover you in this situation. The policies may also exclude protection if any of your personal items are stolen out of your vehicle. It’s recommended that you look through your home or renters insurance policy to see if your personal items are covered if something happens to them.

Consult With Jack Stone Insurance Agency

In most cases, adding comprehensive and collision auto insurance will benefit you in the long run. A potential emergency could arise at any moment, so it’s recommended that you are covered in all areas. If you have any questions, contact our Jack Stone Insurance Agency agents, who will assist you.

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