It's a beautiful Friday afternoon. You are on your way home from work & it's rush hour on Route 22. You are driving a 2017 Chevrolet Tahoe. There are cars everywhere & you are following a 2021 Cadillac CT4. In your rearview mirror, you are watching a Ford Mustang weave in & out of traffic - we've all seen that before, right? Just as you see them cut off a minivan and you're shaking your head, mumbling something to yourself, traffic ahead of you comes to a halt & you rear-end that Cadillac.
We learned about how your Property Damage coverage took care of the vehicle you rear-ended. Naturally you'd like your vehicle to be fixed too. Comprehensive, Collision, Towing and Rental Expense is all lumped into a term called Physical Damage Coverage - you may see it on your own insurance policy.
Here's your insurance policy...
| Bodily Injury Liability | $50,000 per person/$100,000 per accident |
| Property Damage Liability | $50,000 per accident |
| Uninsured/ Underinsured Motorist | $15,000 per person/$30,000 per accident - Nonstacked |
| Medical Benefits | $5,000 per accident |
| Work Loss Benefits | $1,000 per month up to $5,000 |
| Tort Option | Limited |
| Comprehensive & Collision | $100 comp deductible/$500 collision deductible |
| Towing & Rental Expense | $75 towing/$30 a day up to $900 rental coverage |
The good news is with this scenario, you have coverage. A general rule of thumb with carrying Physical Damage coverage is to consider the age of your vehicle. If it is less than 10 years old, you should carry Physical Damage coverage because your vehicle is still holding its value. Most often after 10 years of age, the vehicle has depreciated too much for the cost of coverage to be beneficial to you.
Let's go through each coverage item and explain...
Comprehensive coverage is for things like fire, vandalism, theft, hail, flying objects, glass breakage and hitting an animal, to mention a few. If any of those things happen, you are able to have your vehicle repaired. You would pay the $100 deductible and the vehicle would be insured up to it's actual cash value at the time of the loss. If your vehicle obtained some hail damage and your auto body shop said it would be $5,000 to repair, as long as your vehicle was still worth over $5,000 you'd pay $100 and your company would cover the rest.
Collision coverage takes care of the impact of another vehicle or object. When you hit another vehicle or veer off the road into a tree, collision coverage would help. As with comprehensive coverage, collision coverage has a deductible - in this example it is $500. The vehicle is insured up to its actual cash value at the time of the loss, less the deductible. Keeping things simple, in this example your front end damage is $5,000 as per your auto body shop. So long as the insurance company determines your vehicle is worth more than $5,000, you would pay the $500 and they would pay $4,500 to have your vehicle repaired for you.
Towing (or Roadside Assistance) would help you when your vehicle is disabled whether it be after an accident or even if it becomes disabled for other reasons. This example would reimburse you up to $75.00 per each disablement.
Rental Expense comes into play only when your vehicle goes into the auto body shop & you need a substitute until its repair is complete. Here you have coverage for a vehicle up to $30 per day and a maximum of $900 coverage - which is for 30 days. Sometimes, you don't need the maximum but if parts become elusive, you could be cutting it close.
If you currently don't have Physical Damage coverage and are unsure if you'd like to carry it - just call us! We can help counsel & determine the best option for you, considering price AND the additional coverage if you decide to include it on your policy.
Disclaimer : This article explains general knowledge for the purpose of education & information. Snyder Insurance Agency is not providing nor guaranteeing any insurance coverage within the above mentioned. Any & all claims, or coverage discrepancies and decisions will be an obligation of the insurance company at the time of loss.
