Comprehensive and Collision insurance are optional coverages unless you have a lien on your car. If you have a lien, your lender most likely will require that you carry Comprehensive and Collision coverage to protect their interest in the car. In most cases they will also require a maximum deductible of $1000. The deductible is the amount you pay for repair if your auto is damaged. If the total repair bill is $2000, the insurance carrier will pay $1000 and you will pay $1000. The most common deductible amount that my customers wish to have is $500. Some lien holders will require a maximum of $500.
While Comprehensive and Collision pay for damage to your auto, how your auto is damaged will determine which coverage applies. Collision covers the damage that occurs when you are driving you vehicle. I does not matter whether you collide with another car or some other structure like a tree, lamp post, or guard rail. Comprehensive pays for damage or loss caused by fire and theft, but can also include natural disasters, riots, explosions or falling objects.
The deductible for Comprehensive and Collision don't necessarily have to be the same amount. You can carry $500 or $250 deductible for Comp and $1000 for Collision as long as your lender will allow the higher deductible.
Sunday, December 28, 2008
Wednesday, December 10, 2008
The only auto insurance you MUST have
Liability insurance is the only auto insurance you must carry in the State of Texas. This covers damage to the other vehicle/s and injuries to other people if you are found at fault. The insurance company will pay the amount for which you are liable, up the limit of your coverage. You are still liable for any amount that exceeds your coverage.
Texas is in the process of rolling out a law to all cities which requires your auto to be towed if you are stopped and have no liability coverage. You are allowed to make a phone call to arrange for transportation but your car will be towed regardless of whether you have alternate transportation or not.
Liability is usually stated in the following form: 25/50/25. The first number refers to the amount in thousands of dollars that is paid for each person in the other auto-the Individual Limit. The second number is the maximum that will be paid for each accident-the Accident Limit. If the liability is $25,000 for 3 people, only $50,000 will be paid by the insurance company because that exceeds the accident limit. You are liable for the remaining $25,000. The last number refers to the amount in thousands for the damage to the other party's property. If they are driving a car that is worth more than $25,000 and the car is beyond repair, you wil be liable for the additional amount.
The amounts of coverage normally offered by insuracnce companies is 25/50/25 (the Texas State Minimum), 50/100/50, 100/300/100, 250/500/250. You can also purchase Single Limit coverage for which the Individual Limit is the same as the Accident Limit.
Texas is in the process of rolling out a law to all cities which requires your auto to be towed if you are stopped and have no liability coverage. You are allowed to make a phone call to arrange for transportation but your car will be towed regardless of whether you have alternate transportation or not.
Liability is usually stated in the following form: 25/50/25. The first number refers to the amount in thousands of dollars that is paid for each person in the other auto-the Individual Limit. The second number is the maximum that will be paid for each accident-the Accident Limit. If the liability is $25,000 for 3 people, only $50,000 will be paid by the insurance company because that exceeds the accident limit. You are liable for the remaining $25,000. The last number refers to the amount in thousands for the damage to the other party's property. If they are driving a car that is worth more than $25,000 and the car is beyond repair, you wil be liable for the additional amount.
The amounts of coverage normally offered by insuracnce companies is 25/50/25 (the Texas State Minimum), 50/100/50, 100/300/100, 250/500/250. You can also purchase Single Limit coverage for which the Individual Limit is the same as the Accident Limit.
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