Well as we continue our discussion about Auto Insurance our next topic is the actual physical damage coverage for your car. There are two different coverages that we will concern focus on here; comprehensive and collision. They are listed on your policy a bit different in that they do not show a coverage amount but rather your policy deductible for that specific coverage. For example it will list Comprehensive and say 500 or 1000. That is not the policy limit, but rather your out of pocket expense at the time of loss. It is worth noting that on MOST auto policies, cars are valued at the actual cash value for that car or the"book value" as it is sometimes referred to. This has been the standard for many years but recently some carriers are offering some other options such as "new car replacement" and other such choices. Please discuss these choices with your agent while quoting your auto policy to see which option best fits your needs. These new replacement type policies it typically available only for a brand new car.
Anyway.... first let us begin with collision coverage. Collision covers the physical damage to YOUR car in the event of an accident with another vehicle or object (except an animal...weird but true). It pays to repair or provide you the actual cash value at the time of loss for the car less the deductible at the discretion of the insurer. So, if your car would cost more to repair than the value of the car the carrier would opt to "total out" your car and pay you the value for the car in lieu of making the more expensive repair.
Comprehensive coverage would cover direct physical loss to your car due to things other than collision, such as that deer we mentioned above. Some other things that are covered under comprehensive coverage are weather related losses to your car, theft, vandalism, damage to your windshield, and fire. These are just a few of the examples of the many possibilities of what can happen to your car. Surprisingly comprehensive coverage is VERY inexpensive, so even if you do not want to carry "full coverage" on that old car, it may be worth keeping comp just because it is so cheap.... if nothing else just to make sure your windshield is covered (no deductible on windshields in Florida).
Anyway, over the past few posts we have sought to give a broad understanding of the major components of the common auto insurance policy. This by no means is everything that is in your policy, but hopefully it has helped to clear up some of the mystery. If ever you have questions about your auto policy and would like to discuss them please feel free to give me a call 239-594-0002 or drop me an e-mail firstname.lastname@example.org.
Have a great day,