In auto insurance there are two main areas of covered physical damage losses: collision damage losses and losses other than collision. These two categories are often referred to as collision coverage and comprehensive coverage.
What is comprehensive coverage?
Comprehensive car insurance is auto insurance that covers loss to the insured’s vehicle caused by an object, disaster or theft. In addition to theft, comprehensive covers fire, falling objects, explosions or other unexpected non-collision-related disasters.
Comprehensive insurance does not cover bodily injury. Collision reimburses the insured for the full cost of repairs or replacing the vehicle after an accident. Certain insurers won’t add comprehensive coverage to your policy unless you also buy collision coverage.
But, you can usually purchase collision insurance without comprehensive. Ask us for details.
Do you need it?
You may have heard that an older vehicle doesn’t need comprehensive coverage because it isn’t worth as much as before. If you have comprehensive coverage, you could end up paying more for the premium each month than you would get from the insurance company if your vehicle were damaged.
Comprehensive car insurance may be useful for owners of vehicles that are less than five years old. Comprehensive, along with collision, can account for 30% to 40% of your total premium.
Both are also cash value coverages. If your car is damaged beyond repair, you are entitled to recoup the “Kelly Blue Book” value of the car.
As your car ages, the KBB value declines. So, the general rule of thumb is if both your collision and comprehensive are more than 10% of the KBB value of your vehicle, you might want to drop these coverages.
If your car is only worth several thousand dollars, you might also consider dropping these coverages. But if you eliminate collision and comprehensive, in the event of an accident that is your fault or if your vehicle gets totaled or stolen, you will have to pay the repair bill.
Loans and leases require it
If you lease your vehicle or took out a loan to buy it, the dealership or bank probably required you to purchase comprehensive coverage. They might also mandate the deductible your policy includes. Be sure you understand these requirements when you talk to your insurance agent about coverage for your new vehicle.
Factor in the deductible
If you decide to carry collision and comprehensive (whether your car is five or 15 years old), you should consider choosing the highest deductible you can afford. This will lower your premium considerably. $1,000 is the most popular deductible for this type of coverage.
BGES Group’s office, located in Larchmont, NY is a full service insurance agency offering, Property, Liability, Umbrella Liability, Business Auto, Bid & Performance Bonds, Inland Marine, Worker’s Compensation, New York State Disability, Group Health, Life insurance, Personal lines and Identity Theft.
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BGES Group are Worker’s Compensation Specialists for the States of New York, New Jersey and Connecticut – Issues we address: 1) Lowering pricing – we have specialty programs that can save you up to 40%; 2) Finding a new company; 3) Replacing policies that are being cancelled or non renewed; 4) Audit disputes; 5) Company creating fictitious payroll at audit time; 6) Lowering high experience modifications factors; 7) Misclassification of payrolls; 8) Lowering or eliminating renewal deposits; 9) Getting coverage when you’ve been without for a few months; 10) Covering multiple states under one policy; 11) Eliminating 10% service or policy fees; 12) Timely issuance of certificates; 13) Always being able to get someone on the phone or by email when you need to.
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