080: Collision & Comprehensive Coverage – Auto
In the last episode we talked about Liability part of the policy, which provides coverage to you in case you are liable for damages to others for both suffering and damage to their property.
Today, let’s talk about protection for your vehicle. These are two parts of the policy that provide that protection:
- Collision – this part of the policy provides coverage to repair your vehicle if you hit another vehicle or an object. It’s subject to deductible.
- Comprehensive – which is also known as “other than collision,” pays for losses to your vehicle if it suffers damage from something other than an accident. For example, if a tree falls on your car or you hit a deer while driving.
Now remember, both of these coverages are subject to deductible. For example you may have $500. That means, if the damages are $2500, you will have to pay $500 first and the rest will be covered by insurance.
My favorite tip for you: to keep your premium low, especially if you have a new car, increase your deductibles. I suggest $1000, but you need to make sure you have $1000 in your Emergency Fund.