Collision is a first-party coverage, meaning it pays for damage to the vehicle that it insures. How much car insurance do I need? Whenever a vehicle collides with another car, fixed object, or pedestrian, the damage is paid under collision. The insured party will be required to pay a deductible toward the repair of the vehicle. The higher your deductible, the less the coverage will cost. If you would like to save some money on car insurance without dropping collision coverage, you can opt for a higher deductible and your premiums will be reduced. Also note that if you are not at fault for an accident, your deductible may be reimbursed to you by the other party’s insurance.
Comprehensive is another first-party coverage that pays for damage to an insured vehicle. Most claims not covered by collision will be covered by comprehensive: vandalism, damage by animals, theft, weather-related damage, and damage from falling objects. This coverage is less expensive than collision, and can have a lower deductible. Comprehensive coverage also pays for all glass damage on your vehicle, regardless of the cause of the damage. With comprehensive & collision coverage, you can save money on your policy by raising your comprehensive deductible.
Not all states include coverage for uninsured or underinsured motorists, but many do. There is uninsured and underinsured motorist property damage coverage as well as injury coverage. The purpose of this coverage is to pay for your vehicle or your medical expenses in the event that you are involved in an accident with someone who does not have insurance, or does not have enough to cover your losses.
If your vehicle is in the shop due to a claim, rental coverage will pay for your rental expenses at a certain max amount per day – for the duration of the repairs to your vehicle – up to your policy limits – usually 30 days. The coverage is not automatically included in most “full coverage” policies and must be requested by name. If you have alternate transportation available, you may not require this coverage; if you only have one car, however, it’s a good idea to take out this coverage.
First-party medical coverage pays for your medical expenses in the event of an accident. This coverage also protects you against car-related injuries; for example, if you are injured as a pedestrian or while a passenger in another vehicle, you can file a claim on your own auto policy. The coverage usually has a low limit, as drivers are expected to have a medical insurance policy that will cover the majority of expenses. Some states do handle medical claims differently than others, so it’s important to check with your agent before dropping this coverage.
