Q: My car is almost 10 years old. I'm not sure if I should still carry both comprehensive and collision insurance. Actually, I'm not sure what the difference is between them. Can you explain comp and collision?
We posed this question to Theresa Geving, a Farmers Insurance® agent based in Overland Park, Kansas. Here's what she had to say about comprehensive and collision coverage:
A: This is a question I get all the time. Almost every state in the U.S. requires vehicle owners to carry liability insurance or prove financial responsibility, but that coverage does nothing for you if your car needs to be repaired or replaced in situations where a third party is not responsible for the damage. That's where comprehensive and collision coverage comes in.
Also referred to as "physical damage coverage," comprehensive and collision coverage helps repair your car after a covered loss. If you have an auto lease or loan, your lending institution will require you to carry both comprehensive and collision subject to an approved deductible.
Comprehensive or "comp" coverage generally reimburses you when your car is damaged from theft, vandalism, fire or hitting an animal. Comp also provides coverage if your vehicle is damaged from weather-related events like hail.
Speaking of hail damage, many auto damage claims involve glass claims. Today's windshields often house technological advances such as smart glass, which can help increase safety, but can also increase the cost of repair. At Farmers Insurance®, a glass buyback optional coverage is available, which reduces the deductible for repairable glass damage to your car's windshield. That's part of comprehensive coverage.
Collision coverage provides coverage when damage occurs to your car while moving, parked or struck by another vehicle. If an object damages your vehicle, such as collision with another vehicle or damage from rogue shopping cart, your collision coverage springs into action. If your vehicle rolls from a parked position, your collision coverage would cover the damage to your car while your liability insurance would respond to any claims for damage that results.
If you still owe money on your vehicle or are leasing it, your lender will require you to continue physical damage coverage – meaning comp and collision – until the loan is paid in full or until you complete your lease term.
For everyone else, the general rule of thumb is: if your car is older than ten years, consider removing your collision coverage. But remember to decide for yourself by investigating the value of your car. Your car's current market value is close to the amount you might receive if your vehicle is totaled. If you can leave that amount of money on the table and walk away if someone steals your car or if it is a total loss, you can consider your options and decide if you want to have comprehensive and collision coverage or if you feel comfortable not having coverage. Many people continue to carry full coverage long after a car's 10th birthday.
Keep in mind, if you do carry optional glass coverage, dropping comprehensive coverage can mean losing that as well, and glass can be expensive to replace. That's just one reason why going without physical damage coverage is a big decision to make only after careful consideration. Better yet, talk to an agent, to discuss your insurance options so you can decide what coverage you want.
Talk to an agent about an auto insurance policy today.
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