Car insurance is vital. This cannot be stressed enough. It provides protection in the event that you are involved in an accident with uninsured drivers or are found to be responsible for the accident. It does not protect you from being held responsible for medical and property damages if the other driver isn’t insured. If you are found to be negligent, you can also sue the insurance company. You will be familiar with two types of insurance: collision and comprehensive.
Collision
Collision coverage protects you if your vehicle is struck by another vehicle, or hit by another vehicle. You are also covered if your car is struck by an object. Your collision coverage covers you if something falls from a truck in front you and hits your car. The deductible you can afford is up to you. You can choose the highest deductible to get the lowest premium. However, you should make sure it is one you can afford. The coverage might be limited to the value of the vehicle if it is older. Collision insurance is required by lenders if you have a car loan.
As long as the vehicle does not become a total loss, insurance can provide significant protection. The insurance company’s willingness to pay for repairs will determine what your state considers to be a total loss. Let’s say that damages exceed $1,500, and the deductible is $500. This means you’ll pay the $500 deductible, and the insurance company will cover the $1,000 difference.
This coverage is useful if your vehicle has a loan. Even if your car doesn’t qualify for a loan, it is worth having collision coverage. The repairs on older cars can be expensive. This coverage might not be necessary for older vehicles.
Comprehensive
Comprehensive coverage protects your vehicle as well as any other vehicles you might be driving in an accident other then a collision. Comprehensive coverage covers theft, flood, fire and damages caused by animals. The premium will be lower if the deductible is higher than for collision coverage. It is important that you choose a deductible you can afford to pay in the event of an accident.
The protection method works in the same way that collision. The car insurance will pay $1,000 if your car is damaged by $1,500 and your deductible exceeds $500. Although comprehensive coverage is not required by the state, it may be required by lenders if the vehicle is being financed. You may need this coverage even if the vehicle doesn’t have a loan or is relatively new. This coverage can help you avoid costly repairs that could be required for older cars. This coverage may not be necessary for older vehicles or cars in poor running condition.
Importance
As you can see, collision, comprehensive or both can be very important, depending on your particular situation. Make sure you comply with all state laws and that your deductibles are reasonable.
