In early years of vehicle ownership, many young people may have very little knowledge about coverage options. Considering how expensive premiums can get for a novice, they may just get a basic liability policy that enables them to drive legally. Some people actually think that is all they need and it will pay for all their losses. Most motorists know or realize in time that Liability is only one component and they need to have additional physical damage car insurance to protect their own cars. This post will define it and its key components.
Once you have a valuable enough vehicle you would appreciate that you would stand to lose large sums should something happen to it. That is why you need to have additional coverage to safeguard the investment. There are plenty of solutions in the market because most people choose to arrange policies that combine three largest possible claims they may face.
About 72’% of the US motorists arrange full coverage that includes Collision and Comprehensive as well as Liability with decent limits. Then you would be protected against third party claims against you should you be at fault in an accident and have own damage auto insurance, regardless of fault. Generally, policies with at least these three parts are defined as “full” because this combination protects motorists from most common financial hardships as a result of vehicular losses.
Usually, these two optional components are designed to compensate you and sold together. Collision is there to pay for repairs or vehicle’s open market value if it is totaled following a crash, no matter who was at fault. Comprehensive protects the vehicle against other perils like fire, theft, storm, flood, vandalism and accidental occurrences like falling objects or tree branches, except collisions.
One thing you need to keep in mind is that they exclude deliberate harm by you or any of the family members. You cannot smash it with a bat and expect to be compensated. In other words, “own” doesn’t mean the damages you cause. It may happen due to your actions but it cannot be intentional.
Both of them come with deductibles, which is the out of pocket payment for each and every claim. So, you need to contribute each time before the vehicle insurer settles the remainder. You can always add things like Rental Reimbursement but not having wouldn’t result in financial ruin in most cases. Therefore, you may want to keep the premium as low as possible by keeping deductibles reasonably high and try not to overload the policy.
Generally buying a typical full coverage automobile insurance would be fairly cheap. Once you start customizing and including a few more protection the price starts picking up pretty fast. So, it is advisable to get a quote for a typical policy and another with extras. This way, you can see the premium difference and decide if they are good value.
Another advice would be to make sure you have sufficient Liability limits. Uninsured Motorists coverage is another popular solution against getting hit by one of them. It may be automatically required by your state. Otherwise, it is optional and a good idea to include. There is no harm in checking prices and then you can decide to leave them out or buy.