Purchasing Insurance to Protect Your Car

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In addition to buying state mandated liability insurance, many consumers decide to purchase physical damage insurance to protect their own vehicles. Physical damage insurance covers your car for a wide variety of hazards, regardless of who is at fault or whether your car is moving or parked. Insurance companies offer two separate types of physical damage coverage: collision and comprehensive. These coverages are purchased separately and each pays for specific causes of damage to your vehicle.

 

Collision coverage pays to repair or replace your car if it collides with another vehicle, regardless of who is at fault. It also pays when your car is involved in a single car accident, such as spinning out on ice, flipping your car, colliding with another object, or hitting a pothole. Collision coverage is usually offered with a deductible that you must pay toward your car’s repair or replacement. For example, if your repair cost is $4500 and your deductible is $500, your insurance company will pay $4000 towards the repair. Premium costs are lower when the amount of the deductible is higher, but make sure you are comfortable with the prospect of paying a large deductible out-of-pocket if you make a collision claim.

 

Comprehensive coverage is sometimes referred to as “Comp” or “OTC” (Other Than Collision). This coverage pays for damage to your vehicle that is a direct result of weather, animals, natural disasters, and other causes listed in the policy. Deductibles for comprehensive coverage range from $250 to $1000. Following are some of the hazards that are covered under comprehensive insurance:

 

  • Damage from hitting a deer or other animal
  • Damage from a tree limb falling on your car
  • Vandalism or malicious mischief
  • Windstorm, hail, water, or flooding
  • Earthquake
  • Tornado
  • Fire
  • Theft, including cost for renting a vehicle while your claim is resolved, as per the policy language
  • Missiles and other falling objects (not military missiles, which are excluded as an act of war)
  • Explosion
  • Cracked windshield from a rock or flying debris.

 

Coverage for specific causes of loss varies from policy to policy. Insurance companies also have their own sets of exclusions, policy restrictions, and time parameters. Review your current policy and any prospective policy to make sure you are purchasing the type of coverage that is right for you.

 

David Nardecchia

 

In 1980, I went to work at the Texas Department of Insurance (TDI). Early in my career I found a passion for property and casualty insurance. To broaden the scope of my knowledge, I took numerous property and casualty insurance classes and achieved the Chartered Property and Casualty Underwriters (CPCU) designation in 1995. I retired from TDI in 2010 as the Deputy Commissioner of Personal and Commercial Lines of Insurance. I have always enjoyed helping others, including assisting with their insurance-related issues. In 2012, I had the opportunity to come to the Office of Public Insurance Counsel (OPIC). Today, I share my knowledge and experience to help empower insurance consumers.