Common Car Insurance Question - Your Insurance Instructor

Common Car Insurance Question - Your Insurance Instructor



What is the difference between collision coverage and comprehensive coverage?



It's easy to remember what collision coverage does, simply by looking at the word "collision." When you have this type of coverage, you're essentially insuring your car against damages it may suffer if your car collides with another vehicle. Comprehensive coverage, on the other hand, deals with loss or damage caused by things other than a collision—such as theft, vandalism, animals or hail.

How do deductibles work?



A deductible is a specific amount of money you pay out of pocket before your insurance company will begin to pay for a covered loss up to the limit. For example, if you have a $500 deductible and your car suffers $2,000 worth of damage, your insurance will pay $1,500 after you pay your $500 share. You can choose your deductible amount. This means that if your car experienced the same $2,000 damage and your deductible was set higher than $2,000, you'd pay the full amount out of pocket.



The reason many people opt for higher-deductible insurance policies is to lower premiums. While that is always helpful, consider what works best for your situation.



What is a limit?



A limit is the maximum amount of money your insurance company will pay toward a covered loss. For example, let's say you cause an auto accident resulting in an injury to a person in another car, the case goes to trial and there's a verdict to compensate that person for $57,000. If the bodily injury liability limit on your policy is $50,000, your insurance company would pay $50,000, and then you would be responsible for the difference.

Am I required to have car insurance if I only drive occasionally?



This question has an easy answer: Yes. Regardless of how often or how infrequently you drive, any time you slide behind the wheel of a car, your vehicle's insurance coverage has to meet minimum state requirements.





Each state has specific laws that outline the types and amount of auto insurance you're required to have. Your coverage requirements might be different depending on where you live and what your personal insurance needs are. An agent can help you understand your state's insurance requirements so you can make an educated decision about the coverage levels and deductibles you want. In addition to agent assistance, our tools & resources will provide you with 24/7 access to safety tips and detailed information to help you better understand insurance.









Your state's required minimums may not be enough to best protect you, your family and your car. That's why you can adjust your limits and deductibles- the basic building blocks of any policy-to fit your needs.



Find an agent to learn more about the following coverage types:



    Collision: Covers expenses related to the damage or destruction of your vehicle that's been in an accident.

    Comprehensive: Covers expenses related to the damage or destruction of your vehicle in situations like thefts or storms.

    Liability: When an accident is your fault, bodily injury liability covers expenses related to the injury or death of another driver or a pedestrian, and property damage liability covers expenses related to the damage of another person's property-like vehicles, homes, buildings and other structures.

    Medical payments: If you and/or your passengers are hurt in an accident, this can help cover your medical or funeral expenses.

    Personal injury protection: If you and/or your passengers are hurt in an accident, this can help cover medical expenses plus related expenses like income continuation.

    Uninsured & underinsured motorist: Covers medical expenses and/or repair bills if you're in an accident, the other driver is at fault and doesn't have any (or doesn't have enough) insurance.

    Personal umbrella policy: Offers protection against liability claims or judgments, kicking in when your auto insurance liability limits have already been reached.

    Rental reimbursement: Helps cover the cost of renting a car if your vehicle is in the shop because of an accident covered under your policy.

    Sound system: Covers the cost of replacing stolen or damaged audio and/or video equipment.

    Towing & labor: Covers the cost of common roadside services like tire changes and jump-starts.