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Physical Damage Coverages for Car Insurance

Written by Doug Cohen

Understanding Collision and Comprehensive Coverages

Collision and comprehensive auto insurance coverage can be confusing, especially if you're taking out insurance for the very first time. What does collision cover? Where does comprehensive apply? Is an accident caused by a deer covered under collision, comprehensive or both?

Ensurance.com president Doug Cohen says these sorts of questions are common, but there are simple ways to understand how these two

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types of coverage work to protect you. "Ask ten people the difference between comprehensive and collision coverage and I'll bet you get ten different answers. The easiest way to tell them apart is to remember that collision coverage protects your car when it's involved in a collision. Comprehensive covers your car for everything else, which is why it's called "comprehensive."

Collision and comprehensive are the policies that pay your damages when you get into an accident. Liability and other coverage pays for the damage to someone else's vehicle, property and medical bills. As Cohen points out, collision applies when your car strikes another car or object. If a deer runs out in front of your vehicle, the damage caused may actually be covered under comprehensive (depending on the terms of your insurance), but if you swerve to avoid the animal and strike a fence or telephone pole, collision coverage applies here.

When it comes to comprehensive, Cohen says there are a number of examples of how your vehicle is protected. "Your car is involved in a flood. Your car has a wiring problem, catches fire and burns up. Someone runs a key down the side of your car. Someone breaks into your car and steals your stereo system. Notice these are all things that happen to your car when it is just sitting there, not being driven. When it's being driven, it can collide with other cars, which is when you need collision coverage."

Cohen notes that collision claims involve higher dollar amounts than comprehensive. You probably wonít incur the same expense to repair hail or storm damage as you would if you got into an accident with another vehicle. "This is why people tend to carry a higher deductible for collision and a lower deductible for comprehensive claims."

Setting your deductible for collision and comprehensive can be challenging if youíre new to auto insurance, or arenít used to customizing your coverage. Cohen recommends taking a good look at your finances and how an accident could set you back if you were forced to pay a high deductible. "Try to decide what your personal threshold is for turning in a claim, and then once you have looked at the cost-benefit evaluation, decide accordingly. Just keep in mind that we pay more to have a lower deductible."

Work with your insurance agent to set a deductible on both types of coverage. Ask the agent what you might reasonably expect to claim in typical cases reported in your area and decide on your deductibles with the understanding that you can always alter them later on.

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