Auto Insurance is a mandatory requirement for any automobile on road in USA. In most states, the liability coverage is mandatory and the rest of the choices are left to the drivers of the automobiles. There are different types of insurance coverage that offer different degrees of protection to the vehicles. The total amount the insurance company provides at the time of an accident completely depends upon the regular payment of the monthly premium and deductibles.
People often get confused between the auto collision insurance and comprehensive insurance. A brief overview of collision and comprehensive insurance is given below, to make the concepts clear:
Collision Auto Insurance:
True to its name, auto collision insurance covers the automobile when there is any kind collision. The highlights of this insurance coverage are listed below:
- It covers collision of the vehicle with other vehicle involved in accident irrespective of anybody’s fault.
- It also covers the repair and replacement of parts of vehicles even if the other driver involved in the accident does not have liability insurance.
- It covers collision of vehicle with lamp posts, trees or any such accidental collisions.
- The rates of collision insurance can be reduced by increasing the amount of deductible. The standard deductible for collision insurance in most insurance companies is around $500.
- It can be combined with comprehensive insurance or liability insurance to get cheaper rates.
- Usually, this coverage is not beneficial for older vehicles or vehicles in poor condition, as the deductible is high and the value of the vehicle is low.
Collision insurance is an important coverage that all drivers must consider taking, especially if the vehicle is newly purchased.
Comprehensive Auto Insurance:
Comprehensive insurance on the other hand covers all the other factors that do not come under collision insurance. To have a robust insurance plan for the newly purchased car or if the driver is new, purchasing comprehensive and collision insurance as a package may work out to be the best deal. The highlights of comprehensive coverage are list below:
- It covers the loss of vehicle in the circumstance of vehicle being stolen.
- It covers damages caused to vehicle due to natural disasters like fire, floods, earthquakes, hurricanes and tornadoes.
- It covers vehicles damages caused by an act of vandalism, excluding acts of vengeance by employees or family members.
- Collision of vehicle with an animal is covered by comprehensive and not collision insurance.
