What Are Auto Insurance Comprehensive & Collision Coverage?

What are Collision and Comprehensive automobile insurance covers? Do I have to buy them or are they optional? Under what circumstances it is not wise not to have them? You will find the answers below.

Liability auto insurance covers the damages and injuries you may cause to third parties. Every state in the US requires a basic liabilities cover before a vehicle can be driven on the streets. If you want to cover the damages to your own vehicle regardless of who is at fault you would need to buy additional covers which are Collision and Comprehensive.

Collision Coverage; pays for damages sustained by the insured vehicle following a crash with other vehicles, stationary objects and properties. This could be accident repairs or open market value of the car in cases of total loss. Collision, as the name suggests, refers to damages out of a crash or a hit.

Comprehensive Coverage; pays for the damages to insured car due to unforeseen incidents like being hit by a falling brick, weather damages like flood and storm, fire, vandalism and auto theft. It covers most damages that can happen to your automobile, except collision.

They are optional as it is your own automobile you are insuring. If you insure you get paid for your losses. Otherwise, you would have to get your vehicle repaired out of your pocket. Considering that cars are fetching a fair sum these days potential losses can be tens of thousands of dollars. Many people may find it hard to deal with such financial losses without insurance.

When you buy a full coverage vehicle insurance these two covers would be included. They are usually sold together in bundle and have a deductible amount set for each of them. That means you would have to pay the deductibles first before you can ask the insurance company to pay the rest of damages. That is why many motorists may choose to ignore small damages and pay them out of pocket. This would work out better in the long term since your auto insurance premium would have otherwise gone up.

As a general rule, people with older cars may choose not to have these covers as their losses wouldn’t be big enough to worry them. Instead they may prefer starting to save for a new car whenever it is needed.

You would be required to buy these covers if you have a loan on your automobile. Also, you would be wise to buy them if you have a half decent car. You made an investment when you bought the car and Collision and Comprehensive Coverage is there to protect that investment.

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