If you take out an auto loan or lease a vehicle, you’ll be required to have a full-coverage insurance policy with liability, collision, and comprehensive coverage. If you own your vehicle outright, you’ll have some flexibility when it comes to insurance coverage.
Depending on your circumstances, you might or might not want to include collision and comprehensive coverage in your policy.
What Is Collision Coverage?
Collision insurance will pay to repair your car if it strikes another vehicle, a tree, or some other object or if it gets damaged by a pothole. Those types of accidents can cause serious damage that can easily cost several thousand dollars to repair.
Collision coverage can shield you from large and unforeseen bills. If you’re involved in an accident, your insurance company will pay for repairs, no matter who is at fault.
Collision coverage is not the same as liability insurance. In most states, liability coverage is required by law. If you cause an accident, your liability coverage will pay to repair another driver’s vehicle or someone else’s property. If the crash injures someone else, your liability coverage will pay that individual’s medical bills.
What Is Comprehensive Coverage?
Comprehensive insurance coverage can provide financial protection in other scenarios. For instance, you might hit an animal, a tree might fall on your car, it might get damaged by fire or hail, or you might be a victim of vandalism. If you have comprehensive coverage, your insurance company will pay for repairs.
Should You Get Collision and Comprehensive Coverage?
Your car’s age will influence your decision. If you elect to include collision and
comprehensive coverage in your policy and you file a claim, the maximum amount the insurance company will pay your car’s actual cash value, minus your deductible. If you have a newer vehicle, full coverage can give you peace of mind since you won’t have to cover expensive repairs if your car gets damaged by a crash or by circumstances beyond your control. As your car gets older, its value declines, and the amount that you could receive for a claim goes down, you might decide that paying higher premiums for full coverage no longer makes financial sense.
How Much Does Full Coverage Cost?
Car insurance premiums are based on a long list of factors, such as the type of car you drive, your age, your driving record, and the deductible you choose. If you request quotes for full coverage from several insurance companies, you might discover that rates vary widely.
You might be able to save money by bundling your car insurance with other forms of coverage, such as homeowners insurance. You might also be eligible for discounts based on a safe driving record, your employer, a professional affiliation, or other factors.
