Posts Tagged ‘collision coverage’

Tennessee Auto Insurance Coverage: Optional Protection

Friday, September 2nd, 2011

Tennessee auto insurance coverage buyers must have third party liability protection in place to comply with state law. As long as a person has at least this level of protection in place, he or she is staying legal but there are other types of auto insurance coverage available to consumers and these are worth considering.

Uninsured and Underinsured Motorist Coverage

Both of these types of coverage protect the policyholder, his or her family members and the passengers in the vehicle. Uninsured motorist insurance is used to pay for injuries and damages when the at-fault driver doesn’t have any coverage in place. It also comes into play when the at-fault driver cannot be identified, such as when the accident was a hit and run.

Underinsured motorist coverage is used to increase the level of protection available when the at-fault driver has some coverage but it is not sufficient to fully pay for the damages caused in an accident. The at-fault driver’s coverage is used first and once the policy limit has been reached, the underinsured motorist protection is used to pay the balance owing (up to its policy limit).

Collision and Comprehensive Coverage

Collision and comprehensive coverage protect the driver’s vehicle from physical damage. The collision coverage pays out when the damage is caused by striking another vehicle or an inanimate object. Comprehensive coverage pays for damages caused by fire, theft, severe weather or flooding. It also pays out when the car is stolen and not recovered.

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Posted in Tennessee, USA |

What is Full Auto Insurance Coverage?

Saturday, July 30th, 2011

Full auto insurance coverage has two elements: collision and comprehensive protection. Both of them protect the policyholder’s own vehicle from physical damage.

Collision insurance protection pays for repairs to the vehicle following an accident where the driver has struck another vehicle or an inanimate object. It also covers damages incurred in a rollover accident.

Comprehensive coverage protects the vehicle owner from damages caused by events like stones striking the windshield or windows, hail, flooding and falling objects. It also pays for losses due to fire, theft and acts of vandalism.

If the car is totaled in the accident, the insurer pays out an amount based on its cash value, less the deductible the owner has agreed to pay. Full auto insurance coverage will likely be required if the owner took out a loan to pay for the vehicle, since the bank will want to make sure that its interests are protected if the car is destroyed. The vehicle owner is still responsible for covering the difference between the outstanding loan and the vehicle’s cash value in this instance.

A person who is driving an older model vehicle which has little cash value may want to consider dropping full coverage from his or her policy. Keeping fire and theft protection in place will provide a benefit if one of these losses occurs, and will help to reduce the cost of coverage for the consumer.

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Posted in General Auto Insurance |

When to Avoid Full Auto Insurance Coverage

Friday, July 22nd, 2011

Keeping full auto insurance coverage in place isn’t always the right choice for vehicle owners. Collision and comprehensive insurance pay out based on the car’s cash value, which decreases over time. While a driver who has taken out a loan to finance his or her purchase will likely have to keep full coverage in place as a condition of getting financing, once the car has been paid off in full it may no longer make sense to keep full coverage in place.

In that instance, the owner is paying a set premium for a level of protection that is decreasing over time. The vehicle owner is also required to pay a deductible every time he or she makes a claim against the policy. When the cash value of the vehicle is at or near the policy deductible, it’s time to consider making a change to the policy provisions.

At that point, the driver can drop the collision coverage and limit the comprehensive protection to fire and theft only. This step should help the owner save on the cost of his or her car insurance coverage, since the physical damage protection accounts for a good portion of what a driver pays for insurance.

Full auto insurance coverage should be kept in place on a new car and/or one which has been financed. Older model vehicles, which have a low cash value, probably don’t need to be protected to this extent.

 

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Posted in General Auto Insurance |

Types of Auto Insurance Coverage: Physical Damage Protection

Wednesday, July 20th, 2011

Physical damage protection is an example of one of the types of auto insurance coverage available to consumers. It includes collision and comprehensive coverage. Both types of insurance pay for repairs to the vehicle or compensate the driver in case of a total loss, based on the car’s cash value.

Collision coverage pays for repairs to the car caused by striking an object. It also pays for damages caused in a rollover accident. Comprehensive coverage pays for repairs following other types of losses, including falling objects, stones hitting the windshield, vandalism, fire and theft.

Physical damage coverage is not required under state law but it may be a condition of arranging financing for a new vehicle. Lenders want to make sure that their interest in the vehicle is protected until the loan is paid off in full.

When buying this type of coverage for a car, it’s important to understand how the protection works. The insurance company does not pay out based on the replacement cost or what the driver paid for the vehicle. If the car is totaled in an accident or is stolen and not recovered, the insurance company will write a check for the value of the car, less the deductible the driver has agreed to pay.

Once the car loan has been paid off in full, the driver may want to drop the collision coverage and limit the comprehensive protection to fire and theft only. This measure will help the owner save money on the cost of this type of auto insurance coverage.

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Posted in USA |

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