Auto Insurance Guide
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Collision vs. Comprehensive

Auto insurance is a necessary evil, and everyone wants to pay as low a premium as possible. While there a number of ways you can save on auto insurance, one of the easiest is to limit your coverage to only those items required by your state. Every state requires at least some level of liability insurance, which covers injuries to others and damage to other vehicles and property in an accident for which you are found to be at fault. It may be tempting to keep your insurance coverage to only the level required by your state, but remember that you will be responsible for any costs that exceed your insurance coverage. You may be able to gain more coverage for only a small amount of money, so you may want to think about doing so if you can afford it.

Other coverages, such as uninsured or underinsured motorist coverage, is also considered optional in some states, but foregoing this may also be costly. If you are in an accident caused by a driver who does not have adequate coverage, you could find yourself having to pay for your own medical expenses and repairs. Other types of optional coverage, such as rental car reimbursement or roadside assistance, are items you can safely forgo with minimal financial exposure.

One area where you do have choices that can make a big difference in your final premium is in choosing between collision and comprehensive coverage. Since this affects only your vehicle and expenses, no state mandates these coverages. Comprehensive coverage is the more expensive of the two, as it covers such things as theft and damage done to your vehicle by such things as hitting a deer, hail, fire or falling tree limbs. Collision insurance covers the repairs needed to your vehicle following a traffic accident that you caused.

If you have a loan or lease on your vehicle, you will most likely be required to carry both comprehensive and collision coverage by your lender, in order to ensure that they will receive payment in full if your call is stolen or totalled. However, if you vehicle is paid off, and especially if it is older, you may find that carrying comprehensive insurance simply does not make sense, as the premium is much higher. Collision coverage is less expensive, but it too may prove to make little sense, particularly if your car is more than 10 years old.

Determining the best insurance coverage for your situation typically involves finding the right balance between having enough insurance to protect yourself and paying an affordable premium. Deciding not to carry certain coverages can reduce your premium but may put you at a greater risk of financial loss. Talking with an agent is the best way to decide what your optimal coverage may be.

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