Article 5 of 11 in Understanding Your Car Insurance Policy
Your auto insurance policy may also include collision and/or comprehensive insurance coverage that pays for damage to your car that occurs as a result of an accident, collision, vandalism, or other incident. You do not have to buy either collision insurance coverage or comprehensive auto coverage; it is optional. If you elect to purchase this type of car insurance, then you will pay an additional amount in your premium payments to get the type of insurance you want.
TIP: When shopping for car insurance, you have control over how much, if any, of collision or comprehensive coverage you want to purchase. If you want a cheaper premium payment then you can choose less coverage for damage to your vehicle.
While reducing collision and comprehensive coverage is an opportunity to save money on premium payments, be aware of the fact that if you choose eliminate or reduce your comprehensive or collision coverage in order to save money then you WILL NOT be covered for vehicle damage in the event of a car accident. While low premium payments are important, not having coverage for your car damage after an accident can be a very difficult situation that leaves you without a car to drive. Find the right balance between low premium payments and enough coverage to protect you and your car in the event of an accident.
If you purchase comprehensive and collision auto insurance coverage, you will be required to select your deductible payment. Your deductible payment will influence both your regular premium payments and how much your insurance company will pay in the event your car is damaged. A deductible payment is the amount you will have to pay towards repairs on your car before your insurance company will pay.
EXAMPLE: If you select a policy with a $500 deductible payment, and your car sustains $1000 in damage, you will pay $500 and your insurance company will cover the remaining $500. If your deductible is lower, say $100, then you will pay less to repair your car, but will likely have a higher premium payment on your insurance plan.
Types of Loss Coverage
Before you make a decision, you need to know what your options are:
TIP: Regardless of what type of loss coverage you select, your car insurance policy will NOT pay more than the value of the car, or make repairs beyond what is necessary to restore it to the condition before the accident. If you have an old and inexpensive car, then comprehensive and collision coverage protecting your car from damage may not be worth it because it may cost more than the value of the car to repair it. SAVE MONEY ON CAR INSURANCE by knowing when to buy loss coverage and when to pass on it.
Excluded from Comprehensive and Collision Coverage
As with any type of auto insurance coverage, your comprehensive and collision coverage will have exclusions that you need to be aware of. While each policy is different, a typical car insurance policy will not provide coverage for the following:
These common limits on loss coverage are ones you will need to know when you make the decision to include it in your policy. You will also need to know of any specific limitations included in your policy.
TIP: When you get a quote for car insurance, and include loss coverage in your estimate you need to know what that coverage will not pay for before making a purchase.
Recovering Money Under Comprehensive and Collision Coverage
If you file a claim after your car was damaged or stolen, the insurance company may choose which of three ways it will pay:
If you and your insurer don't agree on the value of the vehicle, you or the insurer may demand an appraisal as a means of resolving the dispute. If you are faced with a collision or comprehensive coverage claim dispute, then you may want to take advantage of a free consultation with an experienced attorney. An attorney can help you understand what you are owed under your loss coverage policy, and work to get you the money that you are owed.
TIP: If your insurance company is making it difficult for you to settle your claim, then you can take the opportunity to shop for a new insurance policy. Click Here to visit the Free Advice quote center if you would like to find a new car insurance policy
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