There are many types of auto insurance that drivers should consider purchasing. Comprehensive coverage and collision coverage are optional types of auto insurance coverage. Because they are optional, some drivers may wonder if they are really necessary.
For many drivers, however, the answer is yes. This is because they cover different things, and each offers very important protection against loss.
Why it pays to have comprehensive and collision coverage
To understand why comprehensive coverage and collision coverage are both good buys for most motorists, let’s take a look at the type of protection each offers.
Collision coverage pays for damage to the policyholder’s vehicle in the event of an accident that the policyholder is responsible for causing. Without collision coverage, a driver who caused an accident would be the only one to pay to repair their vehicle or to replace it if it was damaged beyond repair.
However, full coverage does not cover all damage caused by collisions. But it covers other types of damage that could occur to a car. And there are a lot of different things that could go wrong that comprehensive insurance would cover but collision coverage wouldn’t pay. This includes:
- Hail or hurricane damage
- Debris hits and crack your windshield
- Theft Auto
- Fire and explosions
- Violence caused by civil unrest
- Collision with a deer or other animal
Together, Collision and Comprehensive Coverage pay for most problems that can arise with a vehicle. If drivers do not have either type of coverage, they would be required to cover all costs themselves for any problem that is not caused by another driver who is held responsible for their losses.
When it comes to the amount of auto insurance coverage to get, most people should get both collision coverage and full coverage – especially if they can’t afford to pay out of pocket for one. new vehicle in case their car is a total loss and could be repaired.
There are a few exceptions, however. In particular, drivers who have a low value vehicle may not want to purchase these types of coverage. This is because they often come with deductibles, that is, money the driver has to shell out out of pocket before the insurance takes care of the rest of the losses.
If an insured’s car is worth $ 2,000 and there is a $ 1,500 deductible on the insurance policy, it may simply not be cost effective to purchase collision insurance or insurance. all risks. Even if the car were totaled, the covered driver would only receive $ 500 from the auto insurance company. Paying insurance premiums for months, if not years, to get that $ 500 might not make financial sense.
Of course, for those drivers who have a cheap car they can not afford a replacement if something does happen to it, it may be worth buying coverage anyway – and maybe even paying a little more to get a collision and a full plan with a low deductible.
Ultimately, each driver will have to decide whether it is worth paying for the repair or replacement of the vehicle out of pocket, or whether it makes sense to pay premiums to shift the risk of these losses to the insurer. . For most motorists, taking the risk is just not worth it and buying collision insurance and comprehensive coverage is the way to go.