How Collision & Comprehensive Car Insurance Coverages Benefit You

By Joseph Welusz in Auto Insurance on February 15th, 2008

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by Joseph Welusz

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

It can also be known as other than collision coverage and it pays for almost all other damages to your vehicle. Coverages include vandalism, theft, hitting of animals, fire, severe weather and floods. It will also cover damage to your windshield or windows. It doesn’t cost as much as collision coverage and is also optional and not required by law, although it may also be required by your financing or leasing company.

An important thing to consider when purchasing collision and comprehensive coverage is your deductible. Many companies offer zero dollar to $2500 deductibles. The deductible is the amount of money you will pay if you file a claim before the insurance company pays there share. For example, if you have a $500 comprehensive deductible and file a claim for $1300, you pay $500 and the insurance company will pay the remaining $800.

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 lease or purchase a new car and have a loan, the lending company will might insist you have collision and comprehensive coverage with deductibles no higher than $1000 each. The reason the require this coverage is to make sure the car is worth something in case you default on your payments and they have to resell your car to recoup there money.

If you are required or choose to purchase collision and comprehensive coverage, the easiest way to get cheap car insurance is to request the highest deductible you can afford. Remember, you will be required to pay that deductible amount if you file a claim that is your fault before the insurance company will pay for the rest of the damages.

About the Author:

The above article submitted by Joseph Welusz is another way he is trying to help you get Cheap Car Insurance. Save up to 30% on Car Insurance at QuoteMatcher.com