What is collision and comprehensive on my auto policy & do I need it?

Mark

Gruene, TX.

Mark,

 Neither collision nor comprehensive coverage is required by any state. However, the lender for your car loan may require that you carry these coverages at certain levels.

 Collision and comprehensive coverages

 If you cause a car accident, the collision portion of your policy pays to repair your own vehicle. Your car is considered “totalled” when the repair costs exceed a certain threshold of the car’s value, such as 70 percent. At that point, the insurance company will tow away the car to the salvage yard and offer you the actual cash value of your car.

 To keep your premium costs down when you buy collision coverage, you can raise your deductible to $1,000 or $2,500, but remember you’ll have to pay that amount out of pocket before any coverage kicks in.

 Comprehensive coverage pays for damages to your car that aren’t due to car accidents: Theft, fire, vandalism, natural disasters and hitting a deer are included. Also, your glass coverage comes under the comprehensive portion of your policy. If your windshield cracks, comprehensive coverage saves the day. As with collision coverage, there is a deductible for any comprehensive coverage claim.

Excellent Question.