What kind of coverage does your car have? Do you know what your auto insurance does and does not cover? A car is a pretty big investment…perhaps second only to the insurance! Insurance can get confusing, especially when it comes to vehicles. Today we tackle several questions relating to the car portion of your car insurance – meaning the segment that protects your personal vehicle, not you or other drivers (that’s liability insurance and a story for another day.) If you get into a car accident, your vehicle is going to need some hefty repairs before you’re ready to hit the road again. And that’s where collision and comprehensive insurance are helpful. Together, they are physical damage coverage.
They help cover the costs if your vehicle is damaged and needs to be repaired or completely replaced (like we said, cars are expensive!) In fact, if you have a loan on your car, your lender might require that you carry both collision and comprehensive coverage to protect the investment that the car represents. However, you need to keep in mind that collision coverage and comprehensive coverage actually do different things. We’ll go over what the difference between the two is, and why you might want to make sure that you have both. So here we go! Buckle up, everyone.
Collision coverage will cover the cost of repairs if you have an accident and you’re found at-fault. It takes care of your vehicle (your physical damage liability will take care of the other driver’s car.) If the car is totaled, or beyond the point of saving, collision coverage will pay to have it replaced. If this is the case, you’ll usually get reimbursed for the value of the car at the time of the wreck. And car values depreciate like crazy, so keep that in mind when it comes to your insurance.
Now, collision coverage is usually the most expensive portion of an auto insurance policy if you choose to have it. The State of Georgia doesn’t require you to purchase collision or comprehensive coverage, but it’s still extremely important to help you cover the financial costs of a car accident. You’ll be back on the road – or, since we’re in Atlanta, sitting in traffic – in no time!
What influences my premium?
There are a few things that will have an effect on your auto insurance premiums.
1. Deductible – The higher deductible you choose, the lower your premiums will be. Your deductible is the amount of money you agree to pay before the insurance company steps in to cover costs. For example, you might have a deductible of $500. For a $4,500 claim, you’d pay $500 and the insurance company would pay $4,000.
2. Your driving record – Insurance companies don’t like risk. If you have a clean record, with no tickets or accidents, they see you as being less of a risk. You’ll, in turn, be rewarded with a lower premium.
3. Whether you own your vehicle fully – If you don’t have a loan on your vehicle, meaning that you completely own it, your premium may be higher.
Comprehensive coverage takes care of damage to your car that was not caused by an accident. For example, what would happen if a tree fell on your car? Well, it would be squished. But if you have comprehensive coverage, it would pay for the cost of repairs, up to the limit on the policy, after you pay your deductible. The limit on your policy is the max that the insurance company will pay in the event of a claim.
What’s covered by comprehensive coverage?
Lots of miscellaneous disasters and “Acts of God.”
- Natural disasters
- Hitting an animal
- Falling trees
How much will the insurer pay?
The insurer will only pay the amount of that the vehicle is worth at the time of the incident. So, that means that if your car is worth less than the cost of the coverage itself…well, it may not be worth it.
Are there any exclusions?
Exclusions may vary from policy to policy, so you’ll have to read through your particular policy carefully to determine what is and is not covered. You don’t want to have any nasty surprises if you have a problem and find out that it’s not covered. Get familiar with your policy and ask your agent about any questions you might have. It’s better to ask than to assume.
Now…let’s talk saving.
Do you want to save on your car insurance? Great! ’Cause we’ve got some tips to help you do just that.
1. Raise your deductible: Higher deductible means lower premiums. Collision coverage is usually sold with deductibles from $250 to $1,000. Think about how much cash you have, your disposable income, and the value of your vehicle when deciding on your deductible.
2. Keep up a good driving record: Don’t drive distracted. Drive safe and you will be rewarded. If you have a clean driving record, your premiums will reflect it.
3. Drive less: Ask your agent if you qualify for a low-mileage discount if you don’t drive very often.
4. Get anti-theft devices: Cars get stolen sometimes. If you take measures to prevent a car thief from absconding with your car, you could have lower premiums. Remember, anything that lowers your risk helps.
5. Bundle!: Bundle is the magic word when it comes to insurance. Bundling means that you combine your home and auto insurance by getting them from the same company. The insurer may offer a discount for doing so, so make sure to ask your agent if there’s a way to bundle if you think that could work for you.
Tempting though it may be to go with the minimum insurance requirements for the state of Georgia, keep in mind that these minimums may not be enough. Bodily liability and property liability may not be enough. You may need to think about getting collision and comprehensive coverage to make sure that you’re fully protected, and we urge you to really think about the limits of coverage that the minimum provides. Is this really enough?
Okay. Now that we’re collision insurance pros, don’t forget that Atlanta Insurance can get you free quotes on your auto and home insurance. We’ll take the time to get to know you and identify your specific risks, and we’ll help you find the insurance solution that’s right for you. We want to make sure that you’re fully covered – and that you’re saving money!