Cars can be expensive, especially when repairing one after an accident. During the period of repair, you could be facing an extended period without a vehicle. This can put a major strain on your finances and make it difficult to complete everyday tasks such as grocery shopping or getting to work.
Having Physical Damage Insurance can help you avoid all of these potential obstacles.
What Does Physical Damage Insurance cover?
Physical damage insurance covers any damage done to your vehicle up to the policy limit. This can happen from any number of situations such as car collisions (with other vehicles or objects), natural disasters or criminal activity.
However, this type of policy does not generally cover normal wear and tear on your vehicle, or any mechanical issues that may arise over the life of the vehicle. It is also important to note that this type of policy does not cover bodily injury to the driver or passengers, and does not cover any third-party damages such as damage to other vehicles or any objects involved in an accident.
Should I Consider Physical Damage Insurance?
Auto insurance coverage requirements are different for each state. However, most states require liability insurance for physical damage and bodily harm. This does not include personal harm or damage to yourself or your vehicle, but rather the policy covers any other damage done to others or their property. Although it is generally recommended and can prove to be quite valuable, most states do not require Physical Damage insurance.
There are plenty of situations in which Physical Damage Insurance is highly recommended. If you are leasing your vehicle, most lease agreements require Physical Damage Insurance.
Also, if you are making loan payments on your vehicle, it is recommended to have Physical Damage Insurance. If you are in an accident or your vehicle is damaged, you may be liable for the cost of repair even while still making regular payments on the vehicle loan.
If you own your vehicle outright and do not make payments on it, it may still be worth considering getting Physical Damage Insurance. One way to gauge this is to consider if, in the event of an accident, do you have sufficient funds to pay for repairs?
It may be worth the investment in a Physical Damage Insurance policy if you don’t expect to have the funds available for a major repair or even a new car. Consider also the value of the vehicle itself, if the premiums on a policy such as this are more than the value of your car, then it may not be worth the investment.
Different Types of Physical Damage Insurance Policies
There are two main types of Physical Damage policies to consider when purchasing coverage:
Collision Insurance is a type of policy that covers any damage done to your vehicle when an accident occurs between your vehicle and another vehicle, objects, potholes, etc.
Comprehensive Insurance covers all of the same events as Collision insurance and also covers any other circumstances that damage your vehicle. These events may include theft, animals, and damage from extreme weather and falling objects.
The Cost of Physical Damage Insurance
For a policy to provide this much benefit, you may be wondering about the cost. The answer is that it depends on many different variables. Some of the things that will affect the cost of your policy include the value of your vehicle, your location and your driving history.
Some of this may be out of your direct control, but the main thing to focus on in terms of pricing is your deductible. The deductible is the amount you will pay out of pocket when you have to file a claim. One way to lower the monthly premium is to raise the amount of the deductible.
However, if you choose a lower deductible, your monthly premium costs may be higher. Now it may seem like the clear choice is to have a high deductible and save money on your monthly premiums; however, consider what your cost out of pocket will be when you file a claim.
If your deductible is $1,000, can you pay that out of pocket if any unforeseen circumstances arise? Again, it’s important to consider finding the best balance of monthly premiums and deductibles to keep you covered at an affordable rate.
Ensure You Are Properly Covered
Just as with any other product, it is important to compare rates from different companies to find what best suits your needs. A good provider should offer thorough policies, good rates, be readily accessible and easy to work with. All of these factors become very important if you ever need to make a claim.
If all of these still seem complicated or confusing, most insurance companies will gladly help you through the process of getting coverage. If you have any questions about what you should be considering, always contact your insurance provider, who will happily answer any questions you may have.