COLLISION INSURANCE, COLLISION COVERAGE, COMPREHENSIVE AND COLLISION

COLLISION INSURANCE, COLLISION COVERAGE, COMPREHENSIVE AND COLLISION


Collision Insurance Collision Coverage Comprehensive And Collision.

If you’re shopping for auto insurance, you may consider collision coverage.

Collision Insurance Collision Coverage Comprehensive And Collision.

                                                           
But, do you know what it protects? Collision coverage helps pay to repair or replace your vehicle if it’s damaged or destroyed in an accident with another car, regardless of who is at fault.
That’s different from liability coverage, which helps buy damage to a different person’s car from an accident you cause.
After an accident, you are responsible for paying a specified dollar amount toward repairing your own car. That’s called a deductible, and for collision coverage, it can vary.
Once you’ve paid your deductible, your collision coverage will help pay to repair or replace your vehicle, up to its actual cash value.
If you owe money on your car loan or lease your vehicle, you are typically required by law to have collision coverage. But, if you own your car outright, it’s optional.
You may be thinking: If collision coverage is optional, why buy it? Consider this: If you get into an accident involving another car or object, would you want to pay out of pocket to repair your car– or even to replace it? If not, then collision coverage may be a good choice.
So, now you know that collision coverage can help pay for damages to your car after an accident involving another vehicle, regardless of fault.
After you’ve paid your deductible, collision coverage helps pay to repair or replace your vehicle up to its actual cash value.
Collision coverage is typically required if you owe money on your auto loan or if you lease your vehicle, but if your car is paid off, it’s optional.
People commonly asked a question

Should I carry comprehensive and collision coverage on my auto insurance as you can see here.
There are five major parts to an auto insurance policy and comprehensive coverage and collision coverage kind of work hand-in-hand as the fourth and fifth parts comprehensive and collision coverage together provide the physical damage coverage on your vehicle.
Now while these are both optional coverages if you finance your vehicle your bank is going to require you to carry both comprehensive and collision coverage until your loan is paid off.
So now let’s go over what comprehensive and collision actually cover and the best way to understand it.
To learn it backward collision coverage pays for damage to your vehicle from an accident whether it be just a two-car accident one car.
Where maybe you ran off the road and hit something damaged your vehicle or multivehicle accident anything like that is under collision coverage.
Comprehensive coverage is also known as other than collision coverage in some states.
It pays for damage to your vehicle for just about anything else examples include theft fire vandalism weather damage hitting deer things.
Like that they both pay for damages to your vehicle up to its market value- whatever deductible you now let’s dive into the question should carry comprehensive and collision coverage and this applies whether you already have comprehensive and collision coverage on one or more of your vehicles.
Or if you’re looking for a new policy and a vehicle to ensure the main thing to remember is that the coverage amount offered on both comprehensive and collision coverage will slowly drop over time.
As your vehicle depreciates of value and this leads to much debate about when is the right time to drop or pass on it.
Some suggestions you might hear people say is to drop it as soon as you’ve paid off a carload.
Some say when your vehicle reaches a certain age or whether your vehicle’s market value drops below a certain amount keep in mind there isn’t a right or wrong answer.
My suggestion is to do the math and decide for yourself and I’m going to help you with that before we get into doing the math.
It’s important that you understand how to duck tables work deductibles are your out-of-pocket expense whenever you have a comprehensive or collision claim let’s suppose for example that you have damage that costs two thousand dollars to repair if you have a 250 dollar deductible a claim would pay out $1,7502000 – the 250 same with the 500 adducts able a claim would payout 1500.
Or if you had a thousand dollar deductible the claim would pay out a thousand deductibles have an inverse relationship with the price the higher the deductible the lower the premium but of course, it also means more out-of-pocket money.
If you have a claim and vice versa the lower the deductible the higher the premium the best way to determine whether to keep or drop comprehensive and collision coverage is to simply do the math and decide for yourself.
In order to do that you just need to know three variables the market value of your vehicle what deductible you are carrying and also find out how much extra premium that you’re paying just on the comprehensive and collision parts and add those together.
So to do the math you simply take the cost of the premium for comprehensive coverage add that to the cost of the premium for collision coverage and compare the total with the market value of your vehicle minus the deductible this will allow you to answer two key questions.
Number one how long would it take of paying the extra premium to equal the market value minus the deductible on your vehicle.
Number two if you were to drop comprehensive and collision coverage could you afford to replace your vehicle.
If you were to total it and again there are no set right or wrong answers to this question this is something you need to decide for yourself. 
I hope this article has helped you understand the thought process of comparing whether or not it’s worth it to keep or drop comprehensive and collision coverage.
If you have any questions I’ll be happy to help you.

Post a Comment

0 Comments