"Cars and Things" (stern0)
09/10/2015 at 15:24 • Filed to: None
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"Cars and Things" (stern0)
09/10/2015 at 15:24 • Filed to: None | 3
| 3 |
If there is one aspect of new-car buying that can be confusing for first-time new-car buyers, it is insurance. For example, if you look at the absolute minimum levels of insurance needed in most states, you will see that it is likely $10,000/$20,000 liability insurance. This is the insurance that covers injury to others or damage to the cars of other drivers. The confusing thing for most drivers to cope with is the fact that liability insurance, an optional piece of most insurance programs, is, in the car world, mandatory. And, while it will get your car or truck on the road, it really doesn’t offer you much protection as jury awards over the last few years have been huge.
With that said, let’s turn to !!!error: Indecipherable SUB-paragraph formatting!!! . This would seem to be the ideal coverage for any car, right? Or, even if it wasn’t the exact type of policy you need, it should be pretty “comprehensive,” shouldn’t it? Well, the answer to both questions is: it [comprehensive] is and it isn’t! Is that more than a little confusing? Well, how about adding this, comprehensive, which you might think is mandatory, is actually optional.
So, let’s see where we are, at the moment, liability insurance which is optional in most of the world is mandatory in cars and comprehensive insurance, which would seem better as a mandatory feature of insurance law, is actually optional (except in two instances).
Now, let’s add another somewhat confusing issue. Comprehensive insurance, which would seem to be the one piece of your auto insurance that you need because it is, after all, comprehensive, isn’t as “all-encompassing” as you might thing, says Allstate Insurance, one of the country’s major auto insurers.
Comprehensive insurance is made to protect you for damage to your car that isn’t related to a car accident or motor vehicle incident. In other words, if your car has its front end knocked off by a rather large, nasty-looking semi in a major intersection, comprehensive won’t pay for a thing because the damage results from automotive causes.
If, on the other hand, your car has had its front end knocked off by a very large, speedy falling chunk of granite that has launched itself from a hillside then you are covered. That’s right, you are covered for the rock and not the other vehicle.
Specifically, comprehensive is meant to cover:
Theft
Vandalism
Fire
Disasters like hurricanes or tornadoes
Falling objects
Damage to your car by animals
Damage to your car during civil disorder (riots and war)
If you would like coverage that brings you peace of mind in the event of an auto accident, you have to purchase collision insurance, another so-called optional coverage.
Comprehensive insurance is optional so long as you own your car to the ground. If there is any amount of a loan or lease on the vehicle, then it is likely that the lease-holder or the bank that issued the loan on the vehicle has required you to purchase not only comprehensive but also collision.
Your car’s comprehensive and collision coverage while ostensibly bringing you more protection are actually there to protect the bank or credit union’s or lease-holder’s investment. The coverage is required so that they are paid for the value of the vehicle.
Comprehensive will pay you the actual cash value of the vehicle at the time of an accident if it is damaged or totaled. The actual cash value of the vehicle is usually based on the value of your car as determined by one of the major reporting sites, KBB.com or another commonly used financial rating site.
Since comprehensive is an optional cover, it might seem like a good idea to drop it, if your finances are tight – provided you own your vehicle to the ground. However, it may not be a great idea. Let’s face it, cars are expensive to replace or fix and if your car is damaged or totaled and your don’t have the money to replace it, then the money you have saved by not investing in comprehensive insurance isn’t really a savings after all because you will just have to go out and spend more money, that you will likely have to finance, to replace the vehicle. If you had had the comprehensive and you were paid the actual cash value of the car (ACV) then you would likely have had a good chunk of the money you needed, if not all of it, to replace your car.
jariten1781
> Cars and Things
09/10/2015 at 15:40 |
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My grandfather taught that you should always have full coverage on your primary vehicle. That didn’t mean you needed to pay the insurance company; if you have enough liquidity to replace the car with an equivalent vehicle without impacting your finances he considered it self-insuring the optional (collision/comprehensive/uninsured/etc) pieces. Though there’s more ‘optional’ coverage than there was when he was around, still is pretty sound advice.
Wacko
> jariten1781
09/10/2015 at 15:50 |
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Full coverage on a car that you have not finished paying or that is still work a decent amount of money. My 2014 pathfinder is my DD and is fully insured. My 97 jeep has 1000000 Liability only since is required here by law. I can live with losing the jeep if crashed, stolen.... I can’t afford to continue paying the pathfinder and it’s replacement if a loss. So yeah your father gave great advice.
Cé hé sin
> Cars and Things
09/10/2015 at 15:57 |
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“For example, if you look at the absolute minimum levels of insurance needed in most states, you will see that it is likely $10,000/$20,000 liability insurance”
Seriously? You have limited third party cover? What happens if you say make a young person a paraplegic with brain damage? A claim like that could easily run to €4m here and it’s not going to be less in a place as litigious as America.