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Auto Insurance Coverage

The most commonly recognized coverages, in addition to the basic liability are collision and comprehensive coverages also known as other than collision coverage. This article will explain the differences in coverage and what is covered so when you get free insurance quotes you will be well informed.

Collision Coverage

Collision coverage will pay for damages resulting from an automobile accident where you collide with another object, such as another car or tree. The coverage is comparable expensive when compared to the other coverages included in a car insurance policy. Collision coverage is optional and isn’t required by law, although a leasing are finance company my require it.

If you have an old car and it is not worth at least $2000, you might want to consider not buying collision coverage. You will likely pay more for the coverage than you would get if you filed a claim. This is because insurance companies are only required to pay for the lessor of either what the car is worth or the costs to fix it. They might deem you vehicle worth less than what it will cost to fix.

Comprehensive (Other than Collision) Coverage

Comprehensive coverage pays for damage to your auto from almost all other causes, including fire, severe weather, vandalism, floods, theft and hitting animals. Comprehensive coverage also will cover broken glass, such as windshield damage. Comprehensive coverage is less expensive than collision coverage and many consumers choose to carry it. However, remember it is your choice; you are not required by law to carry comprehensive coverage.

When considering collision and comprehensive coverage, you should consider your deductible. A deductible is an amount of money you agree to pay as part of a claim before the insurer is committed to pay the rest of the claim. For example, if you carried collision coverage with a $200 deductible and you had a $500 loss, you would have to pay $200 and the insurance company would have to pay the remaining $300.

Having a deductible lowers the amount you have to pay for insurance because you are agreeing to take on part of the risk. The insurance companies also likes this because it reduces your chance of filing small claims, which are costly for them to process.

If you lease or purchase a new car and have a loan, the lending company will might insist you have collision and comprehensive coverage with deductibles no higher than $1000 each. The reason the require this coverage is to make sure the car is worth something in case you default on your payments and they have to resell your car to recoup there money.

If you decide or are required to buy comprehensive and collision coverage you can reduce your cost by agreeing to higher deductible but remember that will be the amount you need to pay before the insurance company pays there share. As the car gets older many people choose to only have comprehensive coverage to protect themselves against other than collision claims. This will help them secure cheap car insurance on an aging vehicle.