What Does Your Auto Insurance Cover?
You Need Auto Insurance… but How Much?
Many people see insurance as one of those necessary evils. We have it on our homes, our health, our lives, our cars, and our possessions. If you work in a professional capacity, you have errors and omissions insurance. There’s cancer insurance, long-term care insurance, disability insurance, vision insurance, dental insurance… the list goes on. Even when it comes to our vehicles, we don’t just have one insurance, we have several different pieces. It’s mind boggling and can be downright frustrating.
So let’s take a look at the biggest pieces of that insurance puzzle, and let’s see what is covered by liability, collision, and comprehensive insurance.
First, Liability Insurance
Liability insurance is the legally mandated coverage. Most simply put: you’re not liable (for repair costs) if you hit another person’s property. Your liability coverage has limits (the least is usually $25,000 per vehicle, on up to $250,000 per vehicle). An accident that incurs more damage than your coverage allows means you may be personally be held liable to pay for the difference.
Everyone has to have at least liability insurance in order to legally drive in the US. It’s probably in your best interest not to just carry the minimum (if you total a new car you’re going to surpass that $25k really quickly). Liability only is not full coverage.
Comprehensive insurance is part of the full coverage package. Comprehensive insurance will cover you in case your vehicle is damaged by something other than a collision. If someone vandalizes your car, a tree falls on it, it catches on fire, a rock falls off the mountain and dents it, you run into a deer, theft, or natural disasters are all generally covered under the comprehensive portion of your insurance.
Comprehensive doesn’t cover everything though. If you’re involved in a collision (with an object or another vehicle), medical expenses, or legal fees are not covered (some may be covered under your liability coverage).
Collision insurance covers the cost of repairs to your vehicle if you collide with another vehicle or object. If you hit someone else’s car while driving, your collision coverage should pay for the damages. If you hit a tree, rock, fence, or building, your collision coverage kicks in. If you go off the road and roll your vehicle (or drive off a bridge), your collision insurance should cover the damages.
The key word here is “should.” There are always exceptions, for example if you’re fleeing from law enforcement, that make it so your insurance doesn’t kick in. And remember, if you’re not at fault, the other person’s insurance pays to repair your vehicle.
Deductibles and Coverages
The cost for your liability insurance is determined on a variety of factors, but for the most part the more coverage you purchase, the higher the costs.
The cost for your comprehensive or collision insurance, however, is determined by other factors. One is how expensive your vehicle would be to repair, but a big one is your deductible. The lower the deductible means you take less risk and the insurance company takes more; so your costs go up. Some companies allow a $0 deductible on up to a $1,000 deductible (sometimes more). What fits your budget should determine those amounts.
Do I Need Full Coverage?
When you’re determining coverage, there’s a few things to consider; not the least of which is what would happen if your vehicle was totaled and you were offered no replacement.
Is there a loan or a lease on the vehicle? Most banks and dealers will require full coverage if another party has an interest in the vehicle. They don’t want their asset (or collateral) destroyed.
If you are not required to have full coverage, the next question is how much risk do you want to take? If you determine that you’re a good driver, then perhaps you can skip the collision portion of your coverage. Maintaining the comprehensive coverage means factors outside of your control are covered. Perhaps you want to put collision back on in the winter when the roads are slick? It all depends on your budget, and whether you can afford to replace your vehicle if it’s totaled.
Big Sky Collision Center Fixes Cars
Whether you have your insurance pay to fix your car, the other party’s insurance, or you pay out of pocket, we will treat it all the same. We will do a thorough job, fixing your vehicle back to factory safety standards. In the end, it will be as though you were never involved in the wreck, and you get to drive home in a clean and safe vehicle.