Any insurance agent worth their salt will tell you that you should buy as much car insurance as you can afford. While this is a good rule of thumb, your question might be what you are actually covering on your car once you have purchased the insurance. Below are coverage definitions:
Comprehensive: Covers your car, and sometimes other cars you may be driving, for losses resulting from incidents other than collision. For example, comprehensive insurance covers damage to your car if it is stolen, or if it is damaged by floor, fire, or animals. It also covers windshields that are cracked from passing vehicles throwing stones. There is usually a deductible, which means you have to pay that amount towards repair before your insurance kicks in. The amount of the deductible varies, but to keep your premiums low, select as high a deductible as you feel comfortable paying out of pocket.
Collision: Covers damage to your car when your car hits, or is hit by, another vehicle, or another object. There is usually a deductible, as described above. Older cars owners might consider dropping this coverage, since coverage is normally limited to the cash value of your car.
Remember, whatever you purchase, your coverage is limited to the terms and conditions contained in your own policy.
Adapted from an article from CarInsurance.com – 05/14/2009
Next month - Continue discussion on coverage definitions of car insurance.
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