Collision Versus Comprehensive Auto Insurance
In an effort to reduce monthly expenses and adhere to a stricter budget, you may be in the process of shopping for auto insurance and looking for money saving tips. During this process, it is important to understand auto insurance by knowing the differences in collision versus comprehensive insurance, which are the two most misunderstood types of auto insurance coverage.
Collision Vs. Comprehensive Insurance:
Collision insurance coverage up to its name: it covers the cost to repair your car after you collided with another car, an object such as a fence, or if you hit a deep pothole and caused damage to your car. Your insurance coverage applies even if you are at fault, and deductibles can range between $250 to $1,000. To save money, you can opt for a higher deductible, which will lower your premium.
In the event you were not at fault, you can file a claim with your auto insurance company, but this will require you to pay the deductible first. Your insurance company will then work to recover from the other insurance company, the amount they paid you to repair the car. When this goes through, they will reimburse you for the deductible you paid, but it could take some time. The other option is to work directly with the insurance company of the person at fault. As long as they do not contest the aspect of who was at fault, their insurance company should reimburse you for repair costs directly and in a relatively short amount of time.
Requirements to carry collision insurance varies by state, but it may be required as part of the car loan provided by your creditor. When renting a car, it's important to know that you may be able to use your existing collision insurance to cover damages to the rental car. But-the rental car agency may require you to pay a "loss of use" period, which is their lost income during the repair time when the car cannot be rented. Purchasing a collision damage waiver from the car rental agency will cover that cost and prevent you from paying out-of-pocket.
This type of auto insurance coverage comes into play if your car is damaged in a way other than a collision with another car or object. This includes weather related damage such as hail, flood, and tornado, along with earthquake, fire, falling objects, or an explosion. It also covers damaged due to vandalism, along with reimbursement for loss due to theft.
It can cover the cost to repair a cracked or shattered windshield, so if you often travel on the highways, this is good to know. Another tip to save money is to see if the auto insurance quote states whether glass coverage comes with or without a deductible.
Comprehensive insurance has a lower deductible versus collision insurance, and typically ranges between $100 and $300 dollars. Again, the higher the deductible, the lower the premium.
Like collision insurance, the requirement to carry comprehensive varies by state, so ask your insurance agent. Also be aware that if you choose to rent a car and opt out of comprehensive coverage in lieu of using coverage from your existing auto insurance policy, that you calculate the difference in value of each car. For example, if your car is valued at $10,000 but you rent a new Toyota worth $30,000, your auto insurance coverage may not carry over to the rental car. It is best to consult with your agent and know your options before you're standing at the rental counter.
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