1What is the difference between comprehensive coverage and collision coverage, and do I need it?
When purchasing auto insurance, you are usually doing it because it’s required by your state in order to register a vehicle. It’s also great coverage to have in order to protect you, though.
Everyone makes mistakes, even you. Of course you always hope to be the one not at fault in an accident because then it’s on the other person’s insurance or the other person has to pay for your damages, but mistakes do happen.
In addition, you could end up in a no-fault situation like driving on icy roads or in a parking lot, and the insurance might assign 50/50 blame on both parties. In this case, you want to be sure that things are still covered for your own vehicle.
You purchase insurance as peace of mind. You hope you never have to use it, but if you do have to use it, you want to have enough to cover yourself. You are going to want to keep your premiums as low as possible, though, while also being sure that you’re completely covered. Here are questions you should ask yourself and your insurance company before purchasing a policy.
1. What is the difference between comprehensive coverage and collision coverage, and do I need it?
Comprehensive insurance covers you from things like acts of God (i.e. floods, a fallen tree, or hail) or theft. Collision covers the damage to your vehicle if you hit someone or someone hits you. This is strictly coverage to take care of your vehicle if it’s damaged.
If you have a loan on your vehicle or you are leasing it, then chances are you’re going to be required to have comprehensive and collision coverage on your policy. This is for the lienholder’s piece of mind, but at the same time it just makes good sense if you have a vehicle that’s valued at $20,000 or more.
As your car gets older and depreciates in value to something like $3000, it might not be necessary to have comprehensive and collision coverage on that vehicle. Your premium costs will just be too great over the course of 1-2 years to justify that expense.
If you’re unsure of the value of your car, you can check online with sites like Kelley Blue Book or NADA to help you determine if this is a necessary coverage for you.