What Does Car Insurance Cover? Part 2


Welcome back to the “Full Coverage” section! Here we will explain what is considered “Full Coverage” car insurance and what it means to you! When people say full coverage they typically mean “Liability” (part 1), “Collision”, and “Other Than Collision” (also known as “Comprehensive”) coverage.  Full coverage is generally required by your lender when you have a lease or loan on your vehicle. Full coverage can also include rental reimbursement, roadside assistance, and gap insurance. While Liability covers other people’s property, collision and other than collision cover your property in the event of a loss. It is not required to get Full Coverage on any vehicle.  Lets go through these terms, so you can learn about what coverages are best for you and your family

Collision

Collision insurance comes into play if you or a covered driver crashes into another car, property, or flips over. Think of it as “a car accident”.  For example, if you swerve to miss a deer on your way home from fish fry and you hit another car or a guard rail, and it causes damage to your covered vehicle, it is covered under collision.  In the case of a claim for collision there is a deductible you have to pay out of pocket before insurance kicks in.

Other Than Collision (“Comprehensive”)

Other Than Collision is often termed as “comprehensive”, and covers if your car is stolen or damaged from anything other than a “car accident”. Think of acts of Mother Nature (floods, falling objects, storms, etc.), acts of vandalism, and hitting an animal on the road.  From our last example, if you hit the deer, instead of swerving to miss it, it would be covered in Other Than Collision coverage. If a branch fell off of a tree onto your car, it would also be covered here. Some insurance companies also offer a $0 deductible glass coverage. Ask your agent about glass coverage if you’re interested in it. Similar to collision there is a deductible that you have to pay out of pocket before insurance kicks in.

Rental Reimbursement

Rental Reimbursement pays for a rental car while your car is being fixed as a result of a covered collision or other than collision claim. It varies from company to company. It can include an amount of cost per day to rent the car with a maximum of days that it is covered, or it can just cover up to a certain amount in general per coverage period.

Roadside Assistance

Roadside assistance or towing assistance can help you if you get a flat tire, need a tow, need a battery jump, etc. Often times there are regulations in the distance that towing is covered, or up to a certain dollar amount per incident/year. Check your policy to make sure you have the coverage you need.

Gap Insurance

If you have a lease on your car, the leasing company may require you to have Gap Insurance (the cost is often included in the lease). If you have a loan on your car, you may want to get it to help protect yourself. If your car is damaged beyond repair, your insurance pays the actual value of the car to you or the leasing company. We all know what happens to the value of a brand new vehicle that is purchased/leased and driven off the car lot… It decreases in value! Even if you drive your new vehicle down the road and put 3 miles on it and get in an accident, it is likely the insurance company will not pay as much as you owe on the lease/loan! Gap insurance pays the difference between the claim check for the car’s value and the amount you owe on the lease or loan.

Stop by next week where we will go over the Wisconsin Wrongful Death Law, what it means to you, and other ways to keep you and your family protected in the case of an auto accident!