Understanding Your Car insurance Policies

Liability Insurance
If you’re found at fault in an accident, liability insurance pays for the injury and property damage expenses of the third party involved in the accident. Property damage pays for the replacement or repair of anything that was damaged. Bodily injury expenses cover lost wages and medical bills. If you cause a major accident, your current or potential coverage may not cover you sufficiently. It is a safe bet to buy more than the minimum required by your state. Search the lowest car insurance rates at www.everyinsurancerate.com

Collision Coverage
If you’re found at fault in a car accident, collision coverage will cover expenses needed to repair your vehicle. Collision coverage is usually the most expensive component of an auto insurance policy and is optional.  Insurance companies might proclaim your car a “total loss” if the repairs exceed the market value of the car. When this occurs, the insurance company will pay you the actual cash value, less the deductable amount you’ve chosen for your policy.

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Actual Cash Value (ACV)
The value of your car when it is damaged or destroyed. Insurance companies subtract the depreciation from the replacement cost to figure the actual cash value.

Depreciation
Decrease in value because of age/wear on vehicle.

Replacement Cost
The amount required to replace your car or repair damages without considering depreciation.
In most cases, it’s better to choose replacement cost coverage. Although higher in price, the protection may be worth it.

Comprehensive
Comprehensive insurance coverage will pay for damages to your vehicle that were not caused by an accident. This includes fire, vandalism, theft, natural disaster, and even animals. Depending on the damage, the insurance company will pay the cars worth right before the incident. This is also optional coverage.