In the prior parts of this series, we focused on:
Part One – Bodily Injury liability
Part Two – Property Damage liability
This week we are going to address the coverages that protect your vehicle.
The first coverage is Collision. This coverage pays for the damage to your vehicle if it was damaged when colliding with another vehicle or object. Damages to your vehicle could result from colliding with another vehicle, with a fence or post, or hitting an object on the freeway. Collison also pays if your car is parked and hit by someone else. Collison will pay the cost to repair the vehicle back to its pre-loss condition. If your vehicle has too much damage, it may be “totaled”, meaning the insurance company will pay you the value of the vehicle in its pre-loss condition. Whether your vehicle is repaired or totaled, the insurance company will pay the amount minus the deductible you have selected. For example, if your vehicle was totaled and worth $25,000 before the loss and you had a $1,000 Collison deductible, your settlement would be the vehicle’s value ($25,000) minus the deductible (1,000) = $24,000.
Comprehensive covers damage to your vehicle resulting from most causes other than Collision. Examples include fire, theft, vandalism, objects that fall on the vehicle, cracked windshield, and many other things that can happen. In most situations, these losses are not within your control and as a result, typically do not impact your insurance rates.
Gap Coverage is an important coverage to have if you purchase or lease a new vehicle. This coverage pays the difference between what your vehicle is worth at the time of loss and what you still owe on your loan or lease. Without this coverage you may find yourself “upside down”, meaning you owe more on your loan or lease than the vehicle was worth. Without Gap coverage, beyond losing your car, you may also need to come up with extra funds to pay the lienholder or leasing company. Check with your insurance company as Gap coverage through an insurance company is usually less than what the auto dealer charges.
Other coverages that you can consider include:
- Towing and Road Service – Pays for the cost to call for services like a jump start, changing a flat tire, key lockout, or a tow to a repair facility.
- Rental Car Reimbursement – Pays for a rental car to replace your vehicle while your vehicle is being repaired after a covered loss.
- Original Equipment Manufactured (OEM) Parts – Pays for the use of new original parts made by the manufacturer (if available) to repair your vehicle. This is not offered by all insurance companies.
We offer complimentary reviews and are willing to answer any questions you have about your coverage.