Global Courant
When choosing a car insurance policy, there are several options to consider when building a policy that is best for you. Everyone knows that in almost all states, to legally drive a vehicle, you must have at least liability coverage for your car – but what about other types of insurance? Well, one of the most important options is your collision coverage.
If you are financing a vehicle for purchase or lease, your lender will insist that you have collision coverage, and the more the better. For example, if you were to lease a Cadillac in the state of New Mexico, the company responsible for the lease will likely insist that you purchase the maximum available collision coverage. There are levels of coverage that you should familiarize yourself with in order to make the right choice for your situation.
The least collision offered would be called the “Limited” option. If you choose this option and you end up chasing another car, which would be your fault, your limited policy will pay nothing. If you fall behind and blame it on the other person, you pay your chosen deductible and the insurance company pays the rest. So if you are more than 50 percent responsible for a collision and you have limited collision coverage, you foot the bill.
The choice of a mid-road collision is called the “Default” option. In this case, if you pull over another car or they sweep you sideways, you’ll be responsible for your chosen deductible, ranging from $250 to $1000. Basically, with the standard option, what you pay is the same regardless whose fault is the accident. Some states offer a zero-deductible choice, but the premium rates would be significantly higher. The standard crash option is the most chosen by the average driver.
The highest and most expensive collision option is called the “Broad term” option. In this case, if you are responsible for the collision – or at least more than 50% at fault, you will be responsible for your deductible and the insurance company will cover the rest. If you are not are at fault for the collision and you have broad-term collision coverage, you pay nothing. The insurance company would pay everything for you 100%.
Also keep in mind that the insurance company is only responsible for covering damages up to the value of the car. So if you really do get into a huge pileup and your car is crushed and will cost more to fix than its actual value, it’s declared added up – just food for thought.
So buy your auto insurance carefully, choose your options wisely, be a safe driver, and make sure you’re covered as much as your budget allows.
Car Insurance – Understanding the Differences
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