When it comes to car insurance, most people aren't 100% sure they know what they're getting.
This article is to help explain the two most easily confused parts of car insurance: Comprehensive Coverage and Collision Coverage.
Comprehensive Coverage (also known as Other Than Collision) covers your car for just about any damage other than you causing an accident.
This means if your car is stolen, has a window broken, gets scratched up in a parking lot, or gets burned in a Los Angeles Lakers victory riot, your car will be repaired.
If it is a total loss (the cost to repair your car is greater than the current value of the vehicle) then the insurance company will simply pay you the total current value.
Comprehensive Coverage comes with a deductible meaning you have to pay an amount you choose first before the insurance company pays the rest.
The higher the deductible you choose (meaning more money out of pocket if something happens) the less your car insurance will cost.
Keep in mind, however, the difference in cost between a $25 deductible and a $500 deductible is very small.
Be sure to check on the prices for both extremes.
Making a Comprehensive claim will not raise your insurance rates as you weren't a negligent driver.
Your rates can only go up from a claim if you were at fault and therefor gives the insurance companies reason to believe you are a higher risk.
With this in mind, I think it's a good idea to have the lowest possible Comprehensive deductible possible.
If you make a claim, it won't cost you any more in insurance premium and may save you hundreds of dollars if something happens (compared to if you had a higher deductible).
Collision Coverage is similar to Comprehensive Coverage in that it covers your car, however, it only applies when you are at fault for the damages.
Whether you hit another car or simply back into your garage door, it doesn't matter.
If you're at fault, Collision Coverage is what will cover your car.
This also come with a deductible and likewise your choice of deductible will affect the cost of your insurance.
The price difference for a low deductible and a high deductible is much greater than with Comprehensive coverage.
Unlike a Comprehensive claim, filing a Collision claim will raise your insurance premium when your insurance company looks at your driving record again when your policy comes up for renewal.
If you're a good driver and rarely, if ever, cause accidents, it's probably best to go with a high deductible ($500 or $1,000).
You can have different deductible amounts for Comprehensive and Collision.
I personally have $25 deductible for Comprehensive and $500 for Collision.