Wednesday, January 9, 2008

Thoughts on Insurance Part 3: Comprehensive and Collision

First off, please read the disclaimer at the bottom of this page and know that I am not an insurance agent and that every state has different rules and regulations.
I used to work in the personal (auto and home) industry, and a recent post by Mrs. Micah made me decide to share some things I learned. Please note that I do not benefit in any way by sharing this opinion with you and that it is only an opinion!

Comprehensive and Collision Coverage

I've had many conversations with people over the years about auto insurance. I've come to the conclusion that a lot of people have an incorrect assumption of what comprehensive and collision coverages do for you.
First off, both comprehensive and collision cover damage that occurs only to the insured vehicle or, in certain circumstances, possibly a friend's vehicle or a rental vehicle (check with your insurance company on this, don't assume). If you get into an accident and cause damage to the other person's vehicle, that is covered under your Property Damage coverage.

Comprehensive
While it could vary slightly among insurance companies and states, comprehensive coverage generally covers damage to the insured vehicle that was NOT caused by a collision (accident). Comprehensive coverage usually covers loss caused by:
-contact with an animal (often a deer in my home state of Wisconsin)
-earthquake
-fire
-vandalism
-missiles or falling objects (I hope this never happens to me!)
-riot
-theft
-windstorm, hail, water, or flood
Though it's not an all-inclusive definition, the insurance world often calls these things "Acts of God". In other words, there's not much, if anything, that you could have done to prevent these things. The ones used most often where I live are "contact with an animal" and "windstorm or hail".

Collision
Collision coverage is pretty self-explanatory. It covers damage to the insured vehicle caused by a collision (accident). Remember, this does not cover damage you might do to the other person's vehicle. This coverage is just for your vehicle. My policy actually says that Collision coverage would cover the cost to replace a child safety seat if it was damaged in the accident, as well. I never knew that!

If you do get in an accident, make sure you pull out your insurance policy and double-check what is covered. I read through the comprehensive and collision parts of my policy before writing this post, and I found out there are quite a few things covered that I had no idea about! Definitely do not take your insurance agent or claims adjuster's word for it - they're there to keep money in the insurance company's pockets, after all.

If you think of any other questions you might have about insurance, please let me know. I'd love to share anything I can that might help!

1 comment:

This 20 something lady! said...

Hey Becky, Thanks for stopping by my page again. I appreciate your comments! I do think that our insurance is probably higher than it needs to be. This is definitely on the to-do list. I just keep thinking it would be easier to wait 'till we sell the Truck. I think with it being a truck and not paid for that is where most of the money comes from. Plus, we have had the same plan since my husband was 19.

So, after all that, thanks for the advice and I am definitely going to be comparing rates.