When consumers are shopping for auto insurance, many state that they are looking for "full coverage," a term many in the auto finance industry use to describe the type of coverage they want their clients to carry on financed autos. Though we at McCluskey Insurance Services LLC in Cincinnati, OH, use the term loosely, we understand they require you to carry comprehensive and collision coverages on your auto policy.
Understanding Comprehensive and Collision Coverages
Comprehensive (comp) and collision coverage are often sold as a package deal on an insurance policy. Collision coverage provides coverage if you are in an auto accident and collide with another vehicle or stationary object, such as a fence or light pole.
Comprehensive coverage (also known as other than collision) covers incidents where a rock breaks your windshield, you damage your vehicle by hitting an animal in the road, or someone breaks in, steals, or vandalizes your car. Comprehensive covers a multitude of circumstances unless otherwise listed in the "policy conditions" section of your policy.
How do Comp and Collision Work?
When you file a claim, and your incident falls under either coverage, you are required to pay a deductible for the damages before insurance kicks in and pays. For example, you collide with another vehicle, and you’re found liable for the accident after a police investigation. As a result of the accident, you incurred $5000 worth of damage. You have a $500 deductible on your auto policy for collision coverage. In that case, you would pay $500 to the repair shop, and insurance would pay $4500 toward the repair of your vehicle. Comp claims work the same way.
When you purchase an auto insurance policy, you choose the deductible you want for your comprehensive and collision coverages. These two amounts don’t have to be the same, though most people purchase a policy that way. Deductibles typically range between $250 -$1000. Some companies go even higher. The higher the deductible you agree to pay when purchasing your policy, the lower your premiums will be. Vice versa, if you select a lower deductible, your auto policy will cost more in premiums.
For More Information
To know more about comprehensive and collision coverages and how they can benefit you on your auto policy. Also, to know about auto insurance deductibles, call McCluskey Insurance Services LLC in Cincinnati, OH, at (513) 999-5411.
