Comprehensive and collision coverage

Two forms of auto insurance are optional for many drivers, comprehensive and collision insurance. As with liability car insurance, Member States do not require drivers to receive these coverage options.

Although extensive auto-insurance and collision insurance are often debated, they can be purchased jointly or individually. Please note that these coverages normally apply to rental cars, but do not include insurance if a friend has an accident. Typically, auto insurance follows the automobile, not the driver, but vehicles.

  • What is comprehensive?
  • What is collision insurance?
  • Comprehensive vs Collision
  • Do you need it?
  • Coverage limits
  • How much does it cost?
  • Savings and discounts
  • Filing a claim
  • Should you drop coverage?

Collision and comprehensive  coverage of "physical injury" is referred to as covering vehicle damage. Your lender would ask you to cover the financing or rental of your vehicle.

What is comprehensive auto insurance?

Comprehensive applies to auto insurance covering damage not caused by a collision to the car. According to the Merriam-Webster dictionary, the word "complete" means "total or broadly." It is understandable therefore that the purchasers of insurance companies will believe that "complete" means "complete coverage" or will refund them any harm to their automobiles - but this is not the case.

What does it cover?

Examples of comprehensive insurance-related products include losses caused by:

  • Windshield repair*
  • Damage caused by falling or airborne objects like hail, rocks or tree branches.
  • Theft
  • Vandalism
  • Fire
  • Natural disasters
  • Civil disturbances
  • Striking an animal (including deer) or bird

Most insurers generally bear 100% of the costs of repairing small cracks. Normal out of bag expense would be in the form of a deductible when your windshield needs to be replaced. Before your coverage, collision or extensive damage kicks in, the deductible is the sum you owe. At the beginning of your policy, you pick your deductible.

Comprehensive coverage does not pay for collision injuries, so the name "other than collision" is often known.

Comprehensive coverage natural disasters include hurricane destruction, tornadoes, wind and flood waters.

What is collision insurance?

Collision insurance covers damage caused to your car by the contact, including roll-overs, with another vehicle or object. Your car is covered by accident, irrespective of who is responsible for the damage.

What does it cover?

For example, damage caused by: objects covered under collision insurance:

  • Hitting a tree or telephone pole
  • Colliding with a building, for example the drive-through window at your bank
  • Rolling or flipping your car
  • Hitting a pothole or curb
  • Backing into another car
  • Being hit by another car

The collision coverage comes with a deduction, that means that some of the initial repair costs of your vehicle are your responsibility. Usually deductibles vary from $250-$1,000 and over (per event, not per year). You are going to pay D$500 and your insurer will pay $500 if your drive-thru incident causes $1,000 in injury.

If another driver is responsible for the loss to your car but you still owe the deductible to use your crash insurance for the claim. However, you can subrogate the car insurance company (try to recover your repair costs from the at-fault party). Your deduction will be reimbursed for you if it succeeds in its subrogation.

Comprehensive vs collision

The form of physical harm insurance, accident or comprehensive coverage can not always be apparent. Both policy forms are optional (from a legal perspective, though if your car is financed or leased, your lender will require them). These compensate for the vehicle's damages and they are deductible. However, the two coverages vary a lot, and it is best to buy both when you want sound security.

Generally, full auto insurance pays for accidents, for instance floods or mooring damage, when human beings have low or no control over the event. Collision can deal with the damages if a driver has more control over the situation - if you're rear ended, for example, or someone wipes you off in a car park.

How about hitting a tree as you miss a deer on the road? If you need to file it as a (comprehensive) lawsuit for animal damages or collision? Although the driver doesn't control the deer road, you control your vehicle. Although a suicidal deer caused the primary cause of the damage, its ultimate loss was caused by your vehicle being driven into the stationary tree. If you hit the deer instead, the claim will be covered by your full coverage. The following table lists some claims and which insurance forms apply.

A notable distinction between accident and full coverage is that it is more likely that the potential rate of auto insurance will be increased by collision claims than by all claims. It could be your fault to say collision and, if so, it may anticipate your rate would increase. In general, full claims are not "at-fault" cases, so premiums do not increase; certain government legislation provides safeguards from premium rises in relation to the full auto insurance claims.

Hit and run accidents

Hit-and-runs are a particular case and are unfortunately not unusual. About eleven percent of traffic incidents involve hit and run vehicles, according to the AAA Traffic Safety Foundation. If another driver enters your vehicle and exits the scene without sharing details, do your utmost to get a license number, the car and driver description - if you are present.

Collision insurance covered hit and run injuries, because it paid no matter who was responsible. To show, however, that you were not guilty of doing your best to write down, when you were present in the case, the license plate number and the car description that struck you and file a police report. There are important measures to show you don't attempt to file a false lawsuit.

The police report must be sent immediately. Larry Peyton from Farmers Insurance Incline Village, NV says you can increase your insurance premium if you fail to submit a policy report and describe your particulars. This is because the insurer does not know, or lies to protect yourself or a family member, whether another party has actually caused the damage.

The cause of damage will not always be evident when your car is damaged when it is parked and unattended. Find out whether or not any cameras caught the case.

Hit and run insurance can seem overwhelming, but we have all the resources to make you feel better.

Do you need comprehensive and collision insurance?

It doesn't only mean that these forms of car insurance are not necessary because comprehensive and crash covers are not legally obligatory. You don't have to wear a coat when it's 10 below zero, but most people will think this is a smart idea.

"The coverage is one of the greatest mistakes people make," says Peyton. "Because nearly every person cannot afford an unforeseen cost chooses, by dropping coverage, to try to save a little money."

You are vulnerable for all maintenance or the full replacement of your vehicle out of pocket without a comprehensive and accident insurance.

You probably won't have a solution if you financed your car and still owe a balance — your lender would almost definitely need comprehensive and  collision insurance (and even dictate how high a deductible you can choose). Many that have their vehicles directly must determine if this extra coverage makes sense to buy. It is a no-brainer, buy the coverage if you want your car covered from crashes and weather, fire and theft.

Local conditions may tip the balance in favor of buying insurance. If you live near a designated "open range," for example, cattle are not required to be fenced in. Not only are you more likely to collide with them, you can be held liable for damage to livestock. People who drive frequently in wooded areas may have a high risk of colliding with a deer. Your car's damages could be a comprehensive claim and damage to livestock would be a liability claim.

Penny Gusner, of CompareInsurance.com, warns that there are "a lot of uninsured drivers out there." "In all states, uninsured motor property damages are not given and the limits can be limited, including $2,500. In addition, a few states have low property liability caps, such as the $5,000 cap in California, and insurance covering a default party does not cover your entire loss. Coverage for collisions will help in these situations to completely recoup damage."

77 percent of assured drivers purchased an extensive package and 72 percent were covered by a collision insurance report from the Insurance Information Institute. Analysts in the Insurance Services Office (ISO) focus on those with comprehensive coverage:

  • 2.6% of people in 2013 lodged a lawsuit for full coverage.
  • The average claims were 1,621 dollars.

The state you live in could be an important factor in this decision on car insurance. For instance, your uninsured motor coverage would not protect your vehicle in the event of a hit and run in California, Colorado, Georgia, Illinois, Louisiana and Ohio. If you are also buying crash coverage, you are just covered.

Collision and comprehensive coverage can be insufficient if the car is financed. You can also consider a cover for distance (sometimes referred to as a payoff cover for lease/loan if you owe more than the value of the car). You will only pay up to the value of the car after the accident until the physical damages are paid; then gap insurance will pay the difference between that and the lender's liabilities. So, if the vehicle is $15,000 and $18,000 you owe, gap insurance will help cover the thousands of dollars you might otherwise have to pay out of pocket. You need accident and extensive insurance in your vehicle to get gap assurance.

Comprehensive and collision insurance coverage limits

Unlike liability coverage that comes with specific coverage limits, collision and comprehensive insurance tops out at the actual cash value (ACV) of your vehicle, minus your deductible.Your car’s ACV is its fair market value the immediately before a total-loss accident occurs.Thus, if your car is worth $20,000 and your deductible is $500, you could receive up to $19,500 for the car. You must still pay tax and charges when you buy your substitute vehicle because you need to pay similar charges.

If the vehicle has been damaged to ensure that the maintenance expense goes over the total loss threshold of your insurance company, you can collect an ACV of the car (under your premium level) instead of a reparation payment. The overall loss thresholds vary between 70% and 100% of ACV in general. Complete state loss levels are considered, but insurance firms may find out that vehicles are a total loss before repairs expense exceeds the threshold of the government. For example, in Colorado, the state threshold is 100% of the value of an automobile, but the internal directives of your insurer can say that you complete a vehicle when repair costs are 75% of the value of an automobile.

The ACV your insurance company offers you as a settlement may not match up to what you believe your car is worth.If that is the case, negotiate with your insurer by bringing proof that cars from the same model year, in the same condition of your pre-accident vehicle, are being sold for higher prices in your area.

Comprehensive and collision coverage won’t pay more than your car’s ACV.If you owe a lender more than the value of your vehicle, you should obtain gap insurance that covers the difference between the ACV paid by your insurer and what you still owe the lender.

If you have a collectible vehicle whose value is extremely high or hard to determine, explore a specialty car insurance policy featuring collision and comprehensive coverage with an agreed upon value for your vehicle.This allows a restored classic to be insured for its true worth instead of being compared to unrestored vehicles of the same age in a total loss situation.

If your vehicle doesn't have an overall loss, you can reimburse your compensation insurance provider, without your premium. So the insurance provider can pay $2,000 when maintenance costs are $2,500 and the premium is $500.

How much does comprehensive and collision coverage cost?

The cost of car insurance coverage depends on many rating factors, from your age, gender and driving record to your location and credit rating. Especially relevant for crash coverage rates is the type of car you drive and your driving record.

Insurance firms have internal claims information on your model vehicle, and if the rate of claims and/or repairs is high, you will have to pay extra for your coverage. If your car has a high theft risk, your comprehensive rate is likely to be a little higher.

Your driving record also shows what type of risk you are to car insurance providers. You can expect to pay more for your collision protection if you are accident-prone and have multiple past claims.

Location is also a big factor influencing cost, if you live in a congested, urban area you'll pay more than someone in a rural area. Just as someone in an area that is prone to hail storms (and thus hail claims) will pay more than someone who lives where weather claims are low.

Average costs for coverage vary by state, with the average being $596 per year for collision coverage, and $192 for comprehensive coverage, according to a rate analysis by CompareInsurance.com. Depending on the value of your vehicle, this can be quite inexpensive, considering that if your car is totaled in an accident, you should receive the actual cash value (ACV) for your vehicle, minus your deductible. The equality value of the vehicle before the occurrence (determination) of the accident is your car's ACV.

Saving on comprehensive and collision insurance

There are a few things you can do to pay less for comprehensive and collision insurance:

  • Bundle auto insurance with home insurance
  • Choose a car that's less-expensive to insure
  • Improve your credit score
  • Drive less
  • Improve your driving record
  • Increase your deductible
  • Drop your coverage

Peyton claims that combining the insurance of your car and landlord is by far the safest way to save the optional coverage of your car. Unique discounts are also recommended - healthy drivers and successful students.

You will reduce your premiums by increasing your deductible. How much you save varies between insurers, but is usually between $50 and $200 per year if you raise the deductible between $500 and $1000.

You pick a car that is a significant cost factor but can also save you. For safety features such as the airbags and antilock braking, many auto insurance companies give collision discounts. For anti-theft products, extensive discounts are offered. You can even receive a new car collision discount.

Certain occupations may qualify for discounts, including:

  • First responders
  • Doctors
  • Nurses
  • Military personnel
  • Engineers
  • Credit union employees
  • Scientists
  • Teachers/professors
  • Certified public accountants (CPAs)
  • Auto club members
  • Alumni association members
  • Certain professional groups

During 'low-risk' occupations, different insurers give goodies to a variety of drivers, but if you are not asking, you may not be entitled to a discount.

Filing a claim

You might wonder how much you should buy if you decided to buy comprehensive collision insurance. Actually, you cannot select what comprehensive and collision coverage you need for your purchase, the most your insurance will pay is the real amount of the car – just before the damage occurred, the value of the car was lower than the amount deductible you selected.

In the event of a total loss, you can negotiate your car's true cash value using the same car examples. The fees and taxes charged at the initial buying-point should be included.

You will be hesitant to make a claim for extensive or crash damages unless absolutely necessary because your rate will increase. However, when you make a claim, rates will not automatically rise.

It depends on the rules of your insurer, state laws, the situation and the forgiveness of accidents. Any of the considerations that can be taken into account are:

How serious is the damage? If you scratch your paint with vandalism, this will lead to an increase less likely than if your car is driven out of the cliff. More damage could lead to a higher rate.

If the damage is minor--a bumper needs to be replaced with $750 instead of an important one – the entire front end is removed and $5,000 will be charged – you may not be able to observe a rate increase since the claim hasn't passed the monetary threshold of your insurer which results in surcharge.

Who is at fault? In many cases, if the accident is your fault, but not the other driver is in fault, your car insurance rates will increase. However, certain firms will also raise the premium because you're statistically more likely to be involved in another accident. It could be a tough decision to file an insurance claim.

How badly does the insurer want to keep your account? For car insurance companies, safe drivers are cheaper to cover. You can accident forgiveness if you have been with the insurer for a long time, which means the first accident won't damage prices.

How many claims you've had. One collision or comprehensive claim  may never increase your rates, but you will probably increase your rates if you have made multiple claims of any kind, or if your policy is not renewed by the end. If you have several arguments, you prove to be too high a risk.

Usually, the auto insurance premiums do not increase on one or two comprehensive claims. These incidents are usually seen as non-fault and, because of comprehensive claims, certain States' laws prohibit insurers from raising rates. However, if you have three or more comprehensive claims, the number of claims (not type of claim) can cause your rates to rise.

For collision coverage, it's prudent to just make a claim for significant injury. If the claim is only over the deductible, pay out of pocket so you won't be using any insurance that you can afford to pay for yourself to avoid risking your insurer's surcharges for three or five years.

When should you consider dropping coverage?

Many consultants suggest that you drop your full coverage if the value of your car decreases to the extent that you cannot buy a lot of coverage. However, you should always take into account the effect that your vehicle may destroy or disappear completely. If you need a car to get to work and you are unable to buy another vehicle in financial terms, it may be a smart decision to maintain your coverage.

If your car is older, it might be time to lower the money you save on an account and purchase a new car if your current car dies.

First, examine the costs of the collision and comprehensive coverage; it is probably time to reduce the coverage if the premiums and deductible for that part of the auto insurance policy are higher or the same as your car's value. For example, you won't get much for your money if your car is worth 1,000 dollars and your plan costs 500 dollars a year plus a $500 deductible.

If your premiums do not meet your vehicle's worth completely, consider the law of 10 percent. Experts claim that you will choose to lose your physical injury insurance if your premiums reach 10% of your potential payout. The value of your car minus your deductible is your future payment.

For instance, you can only pay $2,500 if your car has a deduction of $3,000 and you can make a crash claim if you have your car totaled and have a €500 allowance. Using the 10 percent rule, it is time to think about dropping the coverage if the collision and comprehensive premiums cost $250 or more a year.

If your car is seriously damaged or robbed, assuming that it could be replaced, your next move would be to analyze how likely it is to happen. Every 11 years the average American driver goes into an accident. From tiny to full death, that's it. If you are 18 years old and want to imitate the Fast and the Furious scenes, or live where theft of cars is rampant, you could want your coverage to remain. On the other hand, if you do not reach the speed limit, maintain a vehicle in garaged and drive on Sundays, you might be at low risk if the optional coverage is forgotten.

While many insurers need their clients to jointly purchase collisions and comprehensive car insurance, complete insurance or collisional insurance can only be purchased. The prices vary with car insurance companies, but when choosing to buy or opt out of insurance, they are logical.

Get ready for a sound decision by getting your individual car insurance rates. But it is also an emotional choice — you must sleep at night.