Being an insurance agency inside a car dealership we have some great conversations with customers about auto insurance. We try to make it as simple for our customers as possible when we verify they currently have insurance so they can take the car home that day. If a customer is leasing or getting a loan on their new car all of the banks we partner with require proof of comprehensive and collision deductible on the new car. Many banks require a deductible to be no higher than $1000 and to have much higher limits than the state requires.
What is “collision coverage?”
The collision coverage on your policy is coverage for your car if you were in an accident and you wanted to fix your own car. This is when you are in an accident with another car or stationary object. The majority of accidents fall under this coverage. This does not cover the other person’s car. You do not have to pay a deductible to fix another person’s car. This involves hitting another car or object while moving. The deductible you have on your policy is how much you need to pay to get your car fixed and your insurance company pays the rest.
What is “comprehensive coverage?”
The comprehensive coverage on your policy covers your car when something from nature strikes your car. This can take place while it is parked or while you are moving. Things such as tree branches, animals and hail can fall under comprehensive. Don’t let the name fool you it doesn’t give you complete coverage but many things fall under this coverage. If your car is stolen, acts of terrorism, fire and also if you have a broken windshield. Many carriers we represent will replace a broken or chipped windshield at no deductible but it is an added feature.
What is the difference between collision and comprehensive?
It can be difficult to explain the difference but the easiest way is if you are driving your car and hit another object most likely it will fall under collision. If your car is parked and there is damage to the vehicle you most likely will have a comprehensive claim. It gets tricky when it comes to nature. If you are driving and your car gets hail damage this would be considered comprehensive but if you are driving and run into a fallen branch most likely it would be a collision claim. If you were parked and a branch falls on your vehicle this would be a comprehensive claim. This can be very confusing but the best way to get answers on your coverage is by talking to a licensed agent.
If you are ever in an accident the claims representative will be there to assist you and let you know how the claim will be categorized and what deductible if any is required.
What is “Liability coverage?”
Liability coverage on your policy stands for the coverage you are given if you are in an accident and you are found “liable” for damages to the other party. Each state requires liability coverage on every vehicle but the amount can vary. This is an important conversation you need to have with an agent. The difference in price to increase your liability coverage is usually much less than expected we have seen with our customers. The different numbers on your policy stand for one individual is involved in the accident or multiple people. The number is in $1000’s as well. So if your policy states 250/500 that stands for $250,000 in liability coverage for one individual and $500,000 if there was more than one person in the accident. This could be for one car or multiple cars.
What is “Property Damage coverage?”
This covers you to pay for damages you did to another person’s property up to the limit stated on your policy. This is also stated in $1000’s and with the cost of cars these days its suggested in our agency to have $100,000 in coverage. If the damage to the property is higher than the coverage then your liability coverage kicks in.
What is “Rental Reimbursement?”
Rental reimbursement covers the cost you incur when you are in an accident and you need to rent a car while your car is being repaired. This is not coverage for when you are renting a car on vacation. This is sometimes misunderstood. Many insurance companies will extend the same coverage to a car you rent that you have on your own car. Again, this is a conversation to have with an agent. What many people do not know is some of the major credit cards will offer protection on the rental car if you are using their card to rent the car. This is a conversation you should have with the card company to find out what coverage is offered. These are important things to look into because the insurance offered at the rental counter can be beneficial but can be expensive.
The first misunderstood statement we get inside the car dealership is the statement of having “Full” coverage. This is usually said when someone has both comprehensive and collision coverage on their car. The issue with the statement of having “Full” coverage is the assumption you are covered for anything. It is highly unlikely to ever have “Full” coverage because you do not know what risk you may come across. If you were to hit a CEO of a fortune 500 company who you injured or even killed could you ever have enough coverage to cover that particular loss if you were found negligent? So now when you hear “Full Coverage” you will understand it doesn’t mean I am covered for everything but it usually means they have comprehensive and collision coverage on the vehicle.
If you have personal items in your car and it is broken into and your items are stolen many people think they should be covered under their car insurance. This is misunderstood too often and one of the many reasons we always suggest individuals have renters insurance. If you own a home it is most likely you have home owners insurance and if you refer back to our Homeowners tab it states your personal belongings are covered inside and outside your home. Same rings true with Renters insurance. Your personal items will be covered inside and outside your place of residence.
Many carriers offer added features such as roadside assistance, violation forgiveness, accident forgiveness and vanishing deductible. These are all great benefits that we hope you never use but if you ever do need one of these features you will be glad your agent offered them to you.
*The statements above are for reference and are written by a licensed insurance agent as a quick reference guide to make understanding insurance easier. If you have questions please don’t hesitate to reach out to any one of our licensed agents here at Corwin or refer to your policy documents.