At some point before your driving experiences began you probably heard someone mention their “auto insurance deductible.” This refers to collision and/or comprehensive coverage. These coverage options are just that—optional, at least in the eyes of the state. The state requires that you purchase liability insurance—how you choose to protect your own vehicle is up to you (unless it is leased, we will get to that shortly). One can easily confuse the two coverage options so let’s take a moment to go over what each of them is for.
Collision coverage is coverage for your vehicle in the event of an accident. You hit a car, a fence, a sign post and damage some portion of your vehicle. Collision coverage exists to help you handle the costs of repairs, less a deductible of course. The deductible is the amount for which you’re willing to put yourself at risk, in other words, how much you will pay before the insurance company chips in. Five hundred and one thousand dollar deductibles are the most common, but most companies offer other deductible options if neither of those are right for you. Keep in mind that your deductible will influence your premium in an inverse relationship. As your deductible decreases, your premium increases, and vice versa. Adjusting your deductible is one way you can change your premium, but remember to keep your deductible within reason and not elect one that is more than you could afford if your car was damaged as a result of an at-fault accident.
Comprehension coverage provides protection for your car in the event that something outside of your control damages your vehicle. A tree falls on your car or a deer runs out in front of your vehicle as you’re driving. You can have a deductible for this coverage as well, and, as with a collision deductible, the higher your comprehensive deductible, the lower your comprehensive coverage premium. Comprehensive coverage has another feature: windshield glass coverage. This is often listed as full glass coverage or waiver of deductible for glass, on your policy. For a bit of added premium you can waive your deductible in the event you need to put in a glass claim. Have you ever driven behind a large vehicle or truck and had something hit your windshield and chip it? Or crack it? If you have full glass coverage, you would not need to apply your deductible to the cost of replacing your windshield.
Is your car ten years old or older? You might consider opting out of these optional coverage selections to lower costs, for they usually make up a substantial portion of the premium. Some insurance companies don’t offer these coverage options for cars over a certain age, but beware that opting out means you are not covered for such incidents as those described above.