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About Comprehensive & Collision Coverage

About Comprehensive & Collision Coverage

In many states, drivers must carry liability car insurance. Collision coverage and comprehensive policy, alternatively, are generally discretionary.

You may be unclear as to the reasons these types of car insurance are all optional and whether you should cover them. As a rule of thumb, more coverage is way better policy. Nevertheless, in certain instances, investing in a collision or comprehensive vehicle insurance might well not be worth it.

What is Collision Coverage?

Collision coverage is worth it to fix or change out your car or truck if it crashes into yet another car or thing.

Unlike liability Policy, you do not have to choose a Coverage policy. Rather, the policy limit is equal to the Actual Cash Value (ACV). To Put It Differently, the maximum that collision Car Insurance will cover would be the cost of your vehicle without appreciation and the deductible

What is Comprehensive Coverage?

Comprehensive car insurance pays to repair or replace your vehicle if it is damaged by certain events that are beyond your control and not caused by an accident. Random occurrences like fires and storms can cause damages to your vehicle not covered by liability auto insurance.

Comprehensive car insurance covers the cost to repair or replace your vehicle {ACV} Actual Cash Value for damages from unfortunate occurrences like

  1. Theft.
  2. Fire.
  3. Vandalism.
  4. Natural disasters.
  5. Falling objects.
  6. Hitting an animal. Etc.

Reasons You Need Collision and Comprehensive Coverage:

  • While state law may not require you to buy collision or comprehensive coverage, your leaseholder or lender might prompt you to buy the policy.
  • Most leaseholders and lenders will require you to purchase both types of policy, and if you don’t, they’ll do it for you by adding the price onto the monetary value of your lease or loan. This is known as force-placed insurance and it can cost a great deal more than if you’d purchased the coverage on your own.
  • If you own your car and have already paid it off, the decision to get additional insurance lies in your hands. While you may want to save money by forgoing collision and comprehensive coverage, consider some of the financial risks of doing so.