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When choosing auto insurance there are several options to consider when trying to build a strategy that best suits your needs. Everyone knows that in almost all countries, to drive a car legally, you must have at least liability coverage on your car – but what about other types of insurance? Well, one of the most important option is collision coverage.
If you finance a car for purchase or lease, the lender is going to require you to have collision coverage, and the more the better. For example, in the state of New Mexico, if you were to rent a Cadillac, the company responsible for the lease will probably require that you purchase collision coverage maximum available. There are levels of coverage collision you will need to know to make the right choice for your situation.
The least amount of collision available would be called “limited” option. If you choose this option and you rear-end another car that was your fault, Limited policy would pay anything. If you got rear-ended, making the fault of the other party, you would pay your chosen deductible, and the insurance company would pay the rest. So, if you are better than 50 percent responsible for the collision and you have limited collision coverage, you foot the bill.
The middle of the road collision choice is called “Standard” option. In this case, if you broad side of another car or the side swipe you, you will be responsible for the deductible you select, ranging anywhere from $ 250 up to $ 1000. Basically, with Standard option, what you pay is the same as the same fault accident. Some states offer zero deductible choices, but premium rates would be considerably higher. The Standard collision option is usually chosen by the average driver.
The highest and most expensive collision option is called “broad term” option. In this example, if you are responsible for the collision – or at least better than 50% at fault, you will be responsible for the deductible and the insurance company will cover the rest. If you are not the fault of collision and you have a broad term collision coverage, you pay nothing. The insurance company would pay for everything for you 100%.
Also note that the insurance company is only responsible to cover damages up to the value of the car. So, if you really get into a huge pile up and the car is crushed and will cost more to make than the actual value, there will be described was – just food for thought.
So, carefully shopping for auto insurance policy, choose your options wisely, to be a safe driver, and make sure that you are fit the budget allows.
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Source by Dennis Rootes