What Are Comp and Collision in Auto Insurance?
Car insurance protects your car as well as other cars damaged by your car. All states require that automobile owners purchase liability insurance. Lienholders require that comprehensive and collision insurance also be purchased. Without comprehensive and collision insurance, automobile owners may be unable to afford to repair or replace vehicles that have been significantly damaged.
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Significance
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Comprehensive and collision insurance protects your car, whereas liability insurance protects any other cars that you may damage if a wreck occurs. Comprehensive covers damage caused by weather, animals, fire and flood. In addition, comprehensive insurance provides reimbursement for stolen vehicles. Collision insurance protects your car when involved in a collision with another car.
Considerations
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Loan companies require that automobile owners purchase comprehensive and collision insurance until the automobile has been paid off. At that point, comprehensive and collision insurance may be purchased as an optional type of coverage.
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Features
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Comprehensive and collision insurance always include a deductible. This deductible amount must be paid by the automobile owner before the insurance will cover any remaining costs needed to fix or replace the vehicle. Deductibles typically range from $500 to $2,500. Smaller deductibles have larger monthly premiums, whereas larger deductibles have smaller monthly premiums.
Expert Insight
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According to CarInsurance.com, most insurance companies only sell comprehensive and collision insurance together and not separately. If they do separate the coverages, the deductibles of each usually must remain the same.
Misconceptions
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According to CarInsurance.com, the term "full coverage" refers to a combination of comprehensive and collision insurance along with liability insurance. Thus, if a lienholder requests that a new car owner purchase "full coverage" insurance, then comprehensive, collision and liability insurance must be purchased.
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References
- Photo Credit Accidente image by quicolopez from Fotolia.com
