Haris Ashley
Auto physical damage insurance is a type of insurance coverage that insures against damage to the insured's vehicle. It covers damage to the policyholder's car resulting from a collision or other causes, including theft, fire, and vandalism. This type of insurance is often required by lenders for leased or financed vehicles and can provide financial protection against costly repairs. However, it is important to note that auto physical damage insurance does not cover medical expenses, legal fees, or property damage to another person's vehicle.
| Characteristics | Values |
|---|---|
| What it covers | Damage to the insured's own vehicle |
| Collision with another vehicle or object | |
| Fire | |
| Theft | |
| Vandalism | |
| Weather events | |
| Falling objects | |
| What it doesn't cover | Medical expenses for the insured or injured passengers after an accident |
| Legal fees if someone sues the insured after a crash | |
| Lost income to the insured or their passengers if they miss work | |
| Property stolen from the insured's car | |
| Damages to another car after a collision | |
| Regular wear and tear | |
| Mechanical issues |
What You'll Learn
Collision insurance
When purchasing collision insurance, you must select a deductible, which is the amount you agree to pay out-of-pocket when filing a claim. Choosing a higher deductible can lower your insurance premium, but it's important to select a deductible that you can afford to pay when needed. Additionally, you will need to submit a stated amount, which is your best estimate of the current value of your vehicle, taking into account its age, condition, and any attached equipment.
It's worth noting that collision insurance does not cover damage due to theft or vandalism. It also doesn't cover medical expenses for you or your passengers. It also doesn't cover legal fees or lost income resulting from an accident. These coverages may require additional insurance options.
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Comprehensive insurance
- Vandalism
- Fire and explosions
- Windshield and glass damage
- Falling trees, branches, and other objects
- Rocks or objects kicked up by or falling off cars
- Storms, hail, wind, floods, lightning, and earthquakes
- Accidents with animals, such as hitting a deer
- Theft (of the vehicle or parts of it)
The cost of comprehensive coverage varies depending on personal factors such as age, gender, and driving record, as well as vehicle details and location. For example, in Texas, the average cost of comprehensive coverage is $183.57 per year, but it can range from under $150 to over $250.
When deciding whether to purchase comprehensive coverage, consider the value of your vehicle, your driving habits, and your financial situation. If your vehicle is damaged or totaled, comprehensive coverage can help cover the costs of repairs or replacement, giving you peace of mind behind the wheel.
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Fire and theft insurance
In addition to covering fire and theft, this type of insurance also includes the protections of a basic third-party policy. This means it covers the costs of repairs to other people's vehicles or property if you are deemed responsible for damages in a car accident. Insurance companies usually set a maximum payout limit of $20 million to cover these costs in a single accident. Some providers may also include a small amount of cover for your own vehicle (usually no more than $5,000) if an uninsured driver is at fault in the accident.
When taking out fire and theft insurance, you will need to choose a deductible, which is the amount you agree to pay out of pocket when you have a claim. Choosing a higher deductible can lower the price of your insurance. You will also need to submit a stated amount, which is your best estimate of the current value of your vehicle, taking into account its age, condition, and any permanently attached equipment.
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Liability insurance
In most states, liability auto insurance is a requirement, with minimum coverage amounts mandated for bodily injury liability and property damage liability. This means that if you cause a crash, your liability insurance will cover the costs of repairs or replacement of the other party's vehicle, as well as any medical expenses and lost wages resulting from their injuries. This protection extends to situations where you may be held responsible for an accident that damages another person's property, such as their home or business premises.
When purchasing auto physical damage insurance, it is essential to understand the scope of your liability coverage. While it provides financial protection in the event of an accident, there may be instances where additional coverage is necessary. For example, if the damages exceed your liability limits or if the accident involves multiple injured parties, further coverage may be required to fully protect your financial interests.
In summary, liability insurance is a crucial component of auto physical damage insurance, offering financial protection against third-party claims resulting from accidents. By including liability coverage in your policy, you can drive with the peace of mind that comes from knowing you are prepared to handle the financial responsibilities associated with causing an accident.
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Vehicle protection
In addition to collision insurance, physical damage insurance also includes comprehensive coverage, which insures against damage caused by something other than a collision. This includes fire, theft, vandalism, falling objects, and weather events. Comprehensive coverage will protect your vehicle if it is stolen or damaged by something other than a collision, such as a fire or natural disaster.
Physical damage insurance also offers financial protection against costly repairs. This can be especially important for small business owners, as the cost of fixing or replacing a damaged vehicle could have a significant impact on their business. Lenders typically require physical damage insurance for leases and loans, and it is often mandatory for vehicles that are financed or leased.
It's important to note that physical damage insurance does not cover medical expenses, legal fees, lost income, property stolen from your vehicle, or damage to another vehicle. These coverages are typically offered separately by insurance companies, but you may be able to bundle them with your auto insurance. Additionally, physical damage insurance does not cover regular wear and tear or mechanical issues.
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Frequently asked questions
Auto physical damage insurance covers damage to the insured's own vehicle.
It covers damage to the insured's vehicle from collisions, vandalism, fire, theft, and natural disasters.
It does not cover medical expenses, legal fees, lost income, property stolen from the car, or damage to another car.
Lenders typically require this type of insurance for leased or loaned vehicles. If your vehicle is paid off, this coverage is usually optional.
You must choose a deductible, which is the amount you agree to pay out of pocket when you have a claim. A higher deductible can lower the price of your insurance.
