States have made it mandatory for all automobile drivers and owners to have at least the minimum of liability coverage. The limit, however, varies from each state. The two required by states are Bodily Injury (BI) and Property Damage (PD).
However, BI and PD offer limited risk coverage, i.e. BI pays only for damages to other people as a result of an accident due to fault by the insured or any other covered driver. Similarly, Property Damage (PD) pays only for damages to other people’s property caused by the covered person.
On the other hand, at times, when one is held personally liable for damages over and above BI and PD limits, one needs to pay the remainder out of their own pocket. In such cases, with increasing costs of health and medical treatment and costs towards vehicle repair make the situation worse. Therefore, consumer advisory groups usually advise that one should analyze risks and accordingly purchase additional options and should not necessarily rely on basic liability simply for the sake of fulfilling a legal requirement. In addition to the minimal requirements, when obtaining auto insurance quotes, there are two such additional options which should be taken into consideration; collision and comprehensive.
In the case of physical damage, this protection covers the lower amount between the cost of repair of the automobile and its fair market value. This compensates the insured in the event that damages are caused by hitting another vehicle or object or the upset of the covered vehicle. It is normally sold along with a deductible, which is the amount that one is responsible for paying in the event that a claim is made. The larger the deductible the lower the premium becomes.
Losses caused by the following are covered under “comp” policies:
- Missiles or falling objects
- Explosion or earthquake
- Windstorm and sandstorm
- Malicious mischief or vandalism
- Riot or civil commotion
- Contact with a bird or animal
- Breakage of glass.
Comprehensive and collision are also known as a “full coverage” policy when combined with liability. Motorists should evaluate their needs for protection before deciding which type of policy to purchase. The absolute must is to fulfill state law requirements before operating a vehicle. Whereas higher limits of liability will benefit most, a full coverage policy may not. If an older vehicle is being insured, it may not be worth the amount of the premium and/or deductible if it were to become damaged. On the other hand, a higher end automobile or one that is being financed should definitely carry these additional options. The repairs for expensive vehicles can become very costly. Since everyone’s situation is unique, they should take the time to determine what is needed to avoid financial hardships that may come along with a traffic accident.
Regardless of the amount of coverage that one intends to purchase, completing a comparison of rates and insurers is imperative. By obtaining multiple prices from various providers consumers not only have a better chance of finding the cheapest car insurance quote but also a reliable company.
Auto Insurance Collision Coverage pays for damage to your vehicle, bu not damage to things you hit. And it never pays for deer, regardless of which of you is…