Comp and Collision

Collision covers your car in an accident that's your fault. Comprehensive covers your car in non-accident cases such as theft.

Collision coverage is what pays for your vehicle if you cause an accident. The insurance company will pay you an amount equal to the current value of you automobile, not the replacement cost. This is typically what causes insurance to cost so much. If you are in an industry where this is required or recommended - consider a higher deductible to keep you costs down.

If your car is vandalized, stolen, or set on fire comprehensive is the coverage that would pay for damages. Comprehensive coverage usually has it's own deductible. Again - for cheap insurance - raise the deductible.

The term "total" comes into play when the damage of car repair exceeds the insurance companies limit (usually based on a percentage of the value).

A lot of the coverages and limits will depend on the value of the car you own. If the car is worth only $1000 it might not make sense to have $20,000 comprehensive coverage as the auto insurance company will only pay the value of the car at time of accident.

Related Article: PIP and No-Fault >>