Collision and Comprehensive coverage.

Collision coverage.
Collision coverage is the type of insurance that pays to repair your vehicle after an accident has occurred. Collision coverage does not consider which driver was at fault and will pay for the damages to your vehicle regardless of assignment of fault. Many carriers will reimburse the policyholder for their deductible if the other party is found to be at fault.

Comprehensive coverage.
Comprehensive coverage pays for all manner of other vehicular incidents that are not defined as a collision. These include incidents such as vandalism, fire, hail damage and damage caused by other natural phenomenon, as well as damage resulting from theft or as a result of hitting an animal.

This plan option is typically the most expensive portion of your overall coverage. It also can be a place where you may have coverage that you may not think you need (such as flood insurance if you live in the mountains). If you’re looking to lower your cost of insurance, take a closer look in this area. The first consideration should be your deductible amount. A higher deductible can make a big difference in your premiums, and having a higher deductible is the right choice for many drivers. Before you increase your deductible, however, you should remember that you’ll be paying the first part of the claim – so make sure you budget for a mishap.

If the cost to repair your car after an accident gets too extreme, the insurance company may decide to consider your car “totaled.” In most cases, an insurance adjuster will total your car if the repair costs are larger than a certain percentage of the car’s worth. Depending on the car model, age, and other factors that percentage could be as low as 55% or so. Should your car be totaled, you should know that insurance companies typically only pay your car’s book value (even if you have added some after-market options or owe more on your car than the car is actually worth). Before you take out your policy, you may want to check Kelley Blue Book to see what your vehicle is worth. Based on that information, you should, in most cases, not buy insurance coverage that exceeds the amount the insurance company would pay in the event that your car is stolen or totaled.

In the case where your car is worth less than the amount you owe on the vehicle, you may want to consider Gap insurance. This type of policy makes up the shortfall between the vehicle’s value and the amount that is owed to the finance company. There are still certain parameters, but in general the Gap insurance will cover the difference.