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Comprehensive and Collision Auto Insurance
Even though some types of automobile insurance aren't required by law, you may still want or have to have it, because of lenders, coverage to protect your vehicle. Comprehensive and collision insurance policies do just that.
Collision insurance coverage pays for damage caused to your vehicle in an automobile accident, when you are "at fault". A standard collision automobile insurance policy will pay for any repairs up to the fair market value of your car.
It is important to remember that the current value can be significantly lower than the your loan balance. If your car is financed or leased, you need to know about gap insurance to get reimbursed for the difference ( the gap) between what you owe and what the car is worth.Collision coverage usually also comes with an insurance deductible. It's the amount of money you pay toward repairs before your collision insurance kicks in. The higher the deductible you're willing to pay, the less the collision policy will cost.
Collision insurance coverage is not required by law in any state. However, if you're driving a car purchased from a dealership or financed through a lender, you may be required by the dealership or lender to carry collision insurance.
Comprehensive Automobile Insurance
Comprehensive Automobile Insurance is very similar to collision insurance, the main difference being that Comprehensive Automobile Insurance covers damage caused to your vehicle caused by any unknown party or "act of God".
Vandalism, flood, hurricane, theft, and fire are all events usually covered by comprehensive automobile insurance. (But make sure to read your comprehensive insurance policy for exact coverage details.)
Like collision automobile insurance, comprehensive coverage will pay up to the fair market value of your car (less your insurance deductible.) And although it's not legally required by any state, you will probably need it if your car is financed.
TIP: Your collision and comprehensive automobile insurance policies are two places where it can be pretty easy to cut costs. Read our guide to choosing car insurance for money saving ideas!
Auto Policy Insurance Endorsements
Auto Policy insurance endorsements is just a term for any car insurance policy extras like towing insurance, auto glass insurance, daily rental insurance, and emergency roadside insurance.
These policies are never required by any state, but many drivers value the security and convenience they provide.
Here's what you get for your money:• auto towing insurance pays for towing your car anytime you need it
• auto glass insurance gives you a lower deductible (or no deductible) when it comes to repairing any broken window on your car.
• daily rental insurance covers the cost of a rental car while your car is being repaired because of a covered accident not mechanical failure. (So you'll usually need both comprehensive and collision insurance to qualify.) also if you have a extended warranty / service contract you may be covered in the event of mechanical failure.
• emergency roadside assistance covers repairs done on the spot. Changing a flat roadside may be covered, but you'll have to pay for any repairs at the garage. This policy is often combined with auto towing coverage, and called roadside emergency towing insurance.
If you have an extended warranty / service contract you may be paying twice for this coverage so check it out.
In some states, medical payments coverage and uninsured/ underinsured motorists coverage's are voluntary coverage's. In others, they're mandatory. Find your state requirements here.
Next: Understanding the auto insurance policy document.
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