We never know what will happen in the future, but we can prepare for this possibility by having insurance. If you recently bought a vehicle, it is important to insure it. You can choose collision or comprehensive insurance. However, do you know what collision and comprehensive insurance covers?
Definition
To provide a clear understanding of this topic, please refer to the meaning of the following two types of insurance:
Collision Insurance
This type of insurance will provide compensation or coverage if your car is damaged due to an accident. Other objects can cause the accident, for example, hit by a tree, fence, or building.
Generally, collision insurance that you choose yourself is only intended for cars that have been paid off. The lender will ask for collision protection if you’re still renting or leasing.
Insuring a car will give you peace of mind because if a disaster or accident occurs, you will not be confused about the cost of repairing the car. As we know that car repair costs a lot of money.
Comprehensive Insurance
This type of comprehensive insurance also provides protection for the vehicle. However, this insurance does not provide coverage for accidents. The coverage provided is if the vehicle is damaged due to vandalism, falling objects, fire, or theft.
This vehicle protection is an option if you have purchased it in full. However, if the car is still leasing, the lender needs this comprehensive insurance.
Insurance Coverage
Are you wondering what collision and comprehensive insurance cover? To get the answer, let’s have a look at the following information:
Coverage of Collision Insurance
Collision insurance will provide compensation when your car has an accident. This coverage covers single accidents as well as accidents caused by other vehicles. Several kinds of damage will be covered by collision insurance, namely as follows:
- Your car hit another vehicle while driving, or your car was hit by another vehicle while parked.
- Hit and run; this term applies if the driver who crashes into your vehicle is not insured.
- The car flips over.
- Hit stationary objects like poles, trees, lights, and road dividers.
- The vehicle hits a pothole or ditch.
Collision insurance policyholders have a deductible. You will incur this deduction before the insurance covers losses due to an accident. You can set the amount of this deduction when buying an insurance policy.
Make sure to consider it in detail and thoroughly so you can choose the right monthly premium and get the benefits. The deduction fee will be higher if you choose an affordable monthly premium. Conversely, if you pay a higher monthly premium, the deduction fee will be lower.
Coverage of Comprehensive Insurance
Although both are car protection products, comprehensive insurance covers different types of damage. Typically, more damage is due to “acts of God” than human negligence. What is included in the damage of “acts of God”?
- Natural disasters include hailstorms, earthquakes, hurricanes, and hurricanes.
- Explosions, fires, and riots.
- Collision with wild animals.
- Falling objects.
Apart from that, other damages will be covered by comprehensive insurance, such as the following:
- Theft
- Vandalism
- Terrorist acts
- The windshield of the car and broken windows.
Similar to collision insurance, comprehensive insurance also has deductions. The amount of deduction depends on the monthly premium you pay.
Have you started to understand what collision and comprehensive insurance coverage mean?
Advantages of Collision and Comprehensive Insurance
It’s incomplete if you don’t know the benefits of buying insurance for a vehicle. Here are some of the benefits:
Advantages of Collision Insurance
If you have an accident and the car is badly damaged, you do not need to spend too much money. This is because the insurance will cover the repair costs. This is the main benefit, especially if you can’t afford to pay the total cost of the repair yourself. Therefore, insurance provides protection for vehicles and peace of mind.
The next benefit of collision insurance is compensation due to a hit-and-run. The insurance company will cover you even if the driver who hit your car does not respond to your call.
The repair process after an accident is usually done quickly. In addition, if you want a quick fix, you can submit a claim which is the responsibility of the driver who crashed. As a result, insurance will provide reimbursement automatically.
The last benefit of collision insurance is that you can directly ask for coverage from your insurance company. This, of course, will be more economical when compared to taking care of other insurance companies.
Comprehensive Insurance Advantages
After knowing what do collision and comprehensive insurance cover? You also need to know the benefits of comprehensive insurance.
Comprehensive insurance is beneficial if you live in an area prone to natural disasters because the insurance company will cover the damage. In addition, this insurance is also the best choice if the area where you live has high cases of vehicle theft.
Therefore, comprehensive insurance provides substantial damage coverage. The insurance company will not cover minor damage outside of an accident, such as minor vandalism or a cracked bumper.
Should You Purchase Both Collision and Comprehensive Insurance?
If you own your vehicle and it’s already paid for, it’s best to consider protecting it with both collision and comprehensive insurance. Thus, you will get complete protection against minor and major damages.
Even though your vehicle is still leasing or renting, it never goes wrong to provide comprehensive collision insurance coverage. Car damage due to collisions or natural disasters should be the driver’s responsibility. Thus, the lender does not need to cover the loss.
Conclusion
The brief summary is that both types of collision and comprehensive insurance provide vehicle coverage. However, both of them have different coverage allowances. You can use both insurances if you want to get maximum protection and avoid the risk of loss.
Well, hopefully, the discussion above answers your question about what collision and comprehensive insurance coverage mean.