Among the different types of car insurance coverages that are available in the market, comprehensive, collision and liability are most often availed by customers so that an insurer pays for repairing an owner’s vehicle. If an owner’s vehicle gets damaged due to any reason, these types of insurance policies can be very helpful. They can work individually or together to ensure that an owner will not have to pay any additional repair cost from his own pocket. The type of damage covered by each of them is, however, different from the other and we will take a look at each one of them to understand them in a better way.
- Understanding a Comprehensive Auto Insurance – A comprehensive car insurance covers damage to a vehicle that is caused due to events like hail, vandalism, theft or any ‘act of god,’ that is not under the direct control of anyone. An ‘act of god’ also covers events like a tree branch falling on a car because nobody can predict such an accident. These types of occurrences are also quite different from a collision-related incident and are covered accordingly within it. We will look here into specific types of incidents that are usually covered under comprehensive auto insurance.
- All natural disasters like storms, hurricanes, hailstorms, tornadoes, earthquake, etc.
- Theft, arson or vandalism.
- Shattered windshield or broken windows due to abrupt happenings.
- Explosions, fire or civil commotion.
- A damage due to impact with animals, like a deer.
- Any falling object over the vehicle that may cause damage.
- A vehicle being stolen from a jurisdiction or country.
- Incidents related to terrorism.
A policy statement for an act of terror may be vague and incomprehensible for a common man, but it is usually insured under car insurance. Such an occurrence is usually covered under the comprehensive portion of a policy. If any person needs to make a claim for it, that can be done without any problem. Therefore, comprehensive insurance is certainly important for any car owner so that circumstances that are not in our hands can be adequately covered with it.
- Understanding a Collision Auto Insurance – If a vehicle rams into a fixed structure or is involved in a crash with another vehicle, a car owner can easily bank upon a collision auto insurance. This type of insurance covers a vehicle in the event of an accident so that all repairs or even a full replacement can be expected from it. As a matter of fact, most car accidents and crashes fall into this type of category. To be more specific, we will highlight some specific instances where collision car insurance can be invoked.
- If an owner’s car crashes into another car.
- A crash happens when a car is parked at a place.
- A crash happens due to a pothole, or it falls into a ditch.
- In case of a hit and run, if by chance an uninsured motorist coverage cannot be used by a person.
- In case if a person hits a stationary object like a pole, streetlight or tree.
- If in case a car turns turtle or it rolls over.
There are undoubtedly many benefits of collision insurance, one of the best is that one can make a claim irrespective of being who was at fault. Therefore, reimbursement can be made within a very short time. Hence, it is also a reason why this type of claim is settled far easier than a property damage claim as the insurance company need not find out the party that was at fault. A remarkable benefit of this type of car insurance is that an owner has to deal with only his own insurance company for settling the claim. This type of insurance can also be used towards a rental car thereby sparing a person to buy additional rental car insurance.
- Some Specifics Should be Worked Out – After going through the two types of insurance coverage, a person may be at loggerheads on whether to take one or the other. In order to find out whether a person needs comprehensive or collision insurance, some points must be understood, which are as follows.
- The price of a car – It is important to understand the value of a vehicle on whether it is new or is priced exorbitantly. These types of car insurance coverages can help a person in getting rid of spending out of one’s own pocket for any type of replacement or repair.
- The current saving – It is also important to know whether a person can take care of the expenses arising from an accident from one’s own saving. In case if a vehicle is stolen, do you have the saving to replace it with a new one or not?
- The risks involved in an accident – It is essential to ascertain that how frequently and how far does an owner drive his car. If the usage of a car is very frequent and if it is used for commuting over long distances then the risk of an accident can be probably more.
- The residing place – If you live in an area where mishaps are reported regularly due to wildlife or tree branches falling on a vehicle then this point must also be taken into account. The place where a person stays and where the vehicle is most often driven must be considered before buying car insurance.
After analyzing all these factors, if you find out that your car is comparatively expensive, you need to drive it more often, and you do not have enough saving with you in case if an accident occurs then it is advisable to have both types of insurance for the car.
- Is Either of Them Really Needed – A comprehensive and collision car insurance can take care of all types of car damage so that a person will not be left stranded if a mishap takes place. Even if a person has a liability insurance coverage, it may not be enough as the car repair cost towards meeting the damages will not be there in it. Therefore, if the following points are met, then it is always a good idea to get both coverages in tandem.
- A car is under finance or lease
- The vehicle is less than ten years old
- If the cost of the vehicle is more than $3,000
If a car is under finance or on a lease, a comprehensive and collision insurance will be needed by a leasing agent. A leasing agent will always want his investment to be protected at all times and that there are enough funds to meet any eventuality. Therefore, a driver must have the resources to deal with an accident, and if these two insurance variants are there, it can be very helpful, and a person can stay stress-free in all circumstances.
Moreover, if a car is less than ten years old or costs more than $3,000 then also having comprehensive and collision insurance can be beneficial. A collision and comprehensive coverage may cost $600 to $700 in a year. Therefore, a person would be spending $3,000 to $3,500 over a period of five years as the premium amount. In case if a car is priced less than $3,000, then a person may end up paying more in premium than the cost of the vehicle. Therefore, it is essential that a car owner finds out the estimated cost of his car. Once the value of a car is known along with the car insurance amount, it can be helpful in determining whether an owner needs insurance at all or not.
Also, it must be known here that the price of collision insurance can be a bit more compared to comprehensive insurance. Both of them can be priced just more than $1,000, but the number of drivers filing for collision insurance claim will be generally higher than for comprehensive claims.
- What is the Cost of Availing Insurance – The final insurance amount will vary on many aspects including the cost of the vehicle, its manufacturing year and the owner’s age among many other things. Additionally, the rates also vary across companies for the collision as well as comprehensive insurance depending on the facilities that they offer. It is always a good idea to get a few quotes for both types from the leading insurance firms in the business and then take a decision based on the price and facilities offered. Usually, within AED 2,000, a person can easily get comprehensive insurance while it can take around AED 3,000 to get a decent collision insurance plan.
- Conclusion – Car insurance is very important for any individual who owns a car, and it totally depends upon a person the type of plan that one buys. There is no one policy that can be suitable for everyone and it completely depends upon a person what sort of insurance is chosen. But overall, it can be definitely said that having both the insurance types can be very helpful for all types of car owners.