Auto insurance comes in a few different categories of coverages, which can sometimes be difficult for the average consumer to understand. This guide is a quick explanation of what collision coverage is and what comprehensive coverage is.
First, it is important to understand what collision and comprehensive coverage are not. The main type of car insurance that drivers are required to have by law is liability coverage, which is insurance to cover any damage to other property or people that is caused by your vehicle. However, liability coverage does not insure your car against damages done to it, or to you. This is where comprehensive and collision coverage comes into the picture.
The point of collision coverage is to insure your vehicle for repairs needed due to collisions. Therefore, if you get into an accident of any kind, whether with a pole, another car, your fault, or not, you can use your collision coverage to make repairs to your vehicle.
When you make repairs, you will have to pay the deductible unless you are determined by the insurance company to not be at fault at all (often the case if your vehicle was not moving at the time of the impact), and the deductible amount can range from $50 to $1000. The lower your deductible is, the more your collision coverage will cost you in monthly premiums. The general rule of thumb is to set your deductible at the highest amount you are willing to pay out of pocket.
This is an added headache as collision coverage needs to be avoided at all costs so try to make you deductible cost high so that the damages can be recovered without monthly premiums as cheap non-owner insurance policy including sr22s don’t really have it in them for managing repair costs.
Another element of collision coverage to consider is uninsured motorist insurance. This will cover anything that the other driver’s liability insurance should have covered after an accident if it turns out that driver is breaking the law by not holding liability coverage.
Comprehensive coverage will also pay for repairs to your vehicle, but in this case, for damages that are due to external forces other than collisions. These would be things like hailstorms, theft or vandalism, and other similar causes. Check your policy to see if large disasters such as hurricanes and floods are covered by your comprehensive policy. Similar to collision coverage, you will pay a deductible when you have car repairs done using your comprehensive coverage.
With both collision and comprehensive coverage, you should also consider getting insurance to cover car rentals, especially if you rely on your vehicle as transportation to work and do not have another household vehicle you could use. This coverage will pay for the use of a rental car during the whole time your car is in getting repairs under your insurance coverage.