When you’re shopping for car insurance, it’s crucial to understand the different types of coverage available.
A typical auto insurance package will include required coverage such as Third Party Liability and DCPD (Direct Compensation for Property Damage). These generally cover other people’s property – but they don’t cover damage to your vehicle.
This is where you have choices to make. What package is right for your situation?
Collision Coverage:
This type of coverage helps pay for damage to your vehicle resulting from a collision with another vehicle or object, such as a tree or a fence. It typically applies regardless of who is at fault in the accident. Collision coverage is designed to help repair or replace your vehicle if it’s damaged in a crash.
Comprehensive Coverage:
Comprehensive coverage, often called “other than collision” coverage, protects your vehicle against damage from incidents not involving collisions. This can include theft, vandalism, fire, or other unexpected events. Comprehensive coverage provides a broader scope of protection for a wider range of non-collision-related situations.
When Should I Choose Comprehensive, Collision, or Both?
Deciding between comprehensive and collision coverage—or opting for both—depends on your level of risk tolerance and the value of your vehicle. Here’s a general guide to help you make the best choice for your situation:
- Collision and Comprehensive Coverage for Higher-Value Cars: If you have a newer or more expensive vehicle, it often makes sense to have both collision and comprehensive coverage. This is because the cost of repairs or replacement in the event of an accident, theft, or other incident can be significant.
- Consider Your Driving History: If you’re a new driver, have a history of accidents or traffic violations, or have had your license suspended, you might find collision coverage particularly useful. However, keep in mind that insurance premiums could be higher for drivers with these risk factors.
- For Older or Low-Value Cars: If you have an older car that isn’t worth much, comprehensive and collision coverage might not be necessary. In some cases, the cost of the insurance might exceed the value of the car. If your vehicle is worth $2,000 or less, you might not need collision or comprehensive coverage at all.
- When You Park Your Car for the Season: If you only drive your vehicle seasonally and park it on private property for extended periods, you might only need comprehensive coverage. This can protect against risks like theft, vandalism, or fire, even when the vehicle isn’t on the road.
Something to note is that people who finance their vehicles don’t have an option; they must have both collision and comprehensive coverage.
It’s important for car owners to understand that while comprehensive coverage can be valuable in protecting against a wide range of risks, it typically does not cover damage resulting from collisions with other vehicles or objects. That falls under collision coverage. Knowing the specific types of coverage your policy offers and their limitations can help you make informed decisions about your insurance needs.
Here at Bulger Insurance, we’re dedicated to making things simple and advocating for the best policy to meet your needs. Contact us today to find out how we can help you!
