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by: JosephWelusz
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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

Will pay for damages to your car from hitting another object, such as another car, tree, house or mailbox. This coverage is relatively expensive compared to the other coverages listed in your car insurance policy. Collision coverage is not required by law but may be by your financing or leasing company.

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.

Remember if you decide to have collision or comprehensive coverage you will also have to choose a deductible amount from zero to $2500. The deductible is the amount you are responsible to pay before the insurance company pays there portion.

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 buy a new car and take out a loan the lending company will most likely require you to have collision and comprehensive coverage as part of your car insurance. The reason for this is because your vehicle is collateral for the money you borrowed and if they need to repossess your vehicle they need to make sure it will be worth what you borrowed.

If you decide or are required to buy comprehensive and collision coverage you can reduce your cost by agreeing to higher deductible but remember that will be the amount you need to pay before the insurance company pays there share. As the car gets older many people choose to only have comprehensive coverage to protect themselves against other than collision claims. This will help them secure cheap car insurance on an aging vehicle.

About the Author

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