Do you know how much car insurance you need to protect your income and assets? Do you know the difference between collision and comprehensive coverage? Do you know why you need to carry more than the minimum amount of coverage required by Wisconsin state law? At Van De Hey Insurance, we know how confusing car insurance can be, and we know our clients have questions about their coverage. In this article, we will explore the various types of coverage available for your policy, as well as the reasons why having the right limits is the most important thing when shopping for coverage.
Coverage When You Damage Your Car
If you have car insurance, you have a car. Chances are you invested a lot into your vehicle, whether you leased it, bought it, or financed it. Valuable assets should be protected against possible losses, and that includes your car. If an accident were to happen, it helps to know you can rely on your car insurance to get you rolling again.
An important reminder: if you are ever in an accident that involves another driver, make sure to get the other driver’s name, phone number & insurance company they are with, along with their agent’s name. This is very important since police reports take 5 to 7 business days to receive & because of confidentiality most of the information isn’t on the report.
Two Types of Physical Damages Protection
Car insurance companies separate physical damages protection into two separate types of coverage for personal vehicles – collision and comprehensive. You need both to fully protect yourself against financial loss if your vehicle is damaged, destroyed, or stolen. Together, they ensure minimal out-of-pocket costs, even if your vehicle is a total loss.
Collision insurance takes care of damages to your vehicle that occur in a car accident. This includes single-car accidents, such as hitting a tree or light post, as well as multiple-car accidents, such as highway pileups. Comprehensive insurance covers damages to your vehicle if they occur due to an event other than collision. Examples might include running into a deer in the middle of a rural road or discovering that a tree has fallen on your car during a storm.
Reasons You Need Collision and Comprehensive Protection
There are several reasons for including physical damages protection on your car insurance policy. First and foremost, it is to ensure you can repair your damaged vehicle or replace it if it is a total loss. If you rely on your car for your transportation needs, do not skip this important coverage unless you can afford thousands of dollars to replace it. Secondly, you might need collision and comprehensive insurance to satisfy the terms of a loan or lease agreement. Often, banks and dealers will require borrowers to maintain physical damages coverage as a means of protecting their business interest in the vehicles they own or have a lien against.
It’s easy to add collision and comprehensive coverage to your policy at Van De Hey Insurance. Simply give us a call, and we can help you select your deductible. This is the amount you will pay out of pocket toward the cost of any claim, big or small. Deductibles come in many sizes and are a matter of personal preference and affordability. While a low deductible makes the claims process less stressful, a high deductible can provide upfront savings with lower insurance premiums. Other than your deductible, there is nothing else to decide. Your vehicle will likely be insured for its actual cash value, although antique and collector vehicles are often insured for an agreed value.
Compensation for Damages to Property that isn’t Yours
Another important part of your car insurance policy is the property damage liability coverage. This portion of your insurance helps pay for damages you cause to other people’s vehicles and personal property. Perhaps you drift into another lane, severely damaging a brand new Lincoln Navigator. Maybe you lost control of your car, drove through someone’s yard and into the front of their home. These types of scenarios can cost tens of thousands of dollars in repair and replacement costs – money you would be personally responsible for.
Your liability coverage will only pay for damages up to the limits of your policy. If your limits are too low, you could be sued for any remaining losses unpaid by the insurance company. Unlike the state minimum coverage, which is currently $10,000, a higher limit helps shield your assets against a financially devastating lawsuit.
Continue reading part two of “How much car insurance is enough?”