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Julie Perry : I am constantly hearing that you need to compare auto insurance quotes, can you tell me what collision insurance is and how to compare this between different insurance companies.

Response : Julie, yes, I know that every blog post or online article is screaming the headline Compare auto insuranceor Compare car insurance” and so any person would naturally think that this is just a way for the marketer to make money or to get information of the client. Believe me, this information can be easily got in many other ways. However, this is a great tip which is over used, but a good one since it can save you money. What is more only the customer is most aware of what he or she wants and therefore you should be educated? I honestly believe that just like driving lessons, the basics of car insurance should be taught to each individual.

Well, let me explain collision insurance. Collision insurance is an important own damage coverage for auto insurance.This is for your car. Supposing you buy a new car, go for your business meeting and park your car in your client’s premises. Someone in the parking lot collides with your car and damages it. This is when collision coverage will pay you for the damages. In its simplest definition, collision auto insurance protects the driver financially in the event of an auto accident that causes damage to one’s auto. Auto insurance pays for damages incurred to the car in a collision, minus deductible. Collision would also pay if you collide with another car or auto. Remember that pothole damage to your car is also considered collision damage. For collision there will be a minimum deductible amount and if you want to waive this you will have to pay a higher premium.

Collision auto insurance can cover a wide range of circumstances. For example, damage to one’s car as the result of striking a telephone pole, driving into a cement pillar in an underground parking lot, or a hit and run accident while the car is parked in a parking lot.

Julie, all insurance companies will have the same coverage for collision auto insurance but the only thing that you need to compare for this coverage is the auto insurance rates and discounts for opting for higher deductible. The second important thing you need to pay attention is and compare auto insurance policy is for the condition of settlement of claim for collison since this might differ from each company. Some settle on actual cash loss basis while some settle on market value basis.

I am sure now you do not hate the words “compare auto insurance quote or compare auto insurance rates, or compare auto insurance coverage and fully understand what they mean.
Thanks.
Kamlesh.

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Mark Ling : Thanks Kamlesh, that was a good explanation on rental car insurance. However, I have another question – what happens if there is a property damage?

Response : This is a very intersting question and a much debated issue even in our insurance world. The comparison of car rental insurance for physical damage is interesting, however I would like to talk about the present version of this coverage. Let is compare auto insurance coverage on rental car.
As per the prevaling car insurance regulations, if you have physical damage coverage or PAP coverage on one auto than when you rent a car it would cover the physical damages but you will have to pay the deductible amount on this which is as per your PAP – auto insurance policy. Presently the coverage for nonowned cars moved back to physical damage (where it still is today), thus requiring PAP insureds to carry such coverage on at least one car and to pay their own deductible in order to have physical damage coverage for a nonowned car. The insurance company is not happy with this since their exposure has doubled. They are liable for the car you own and also the non-owned car you drive. The rental companies no longer carry physical damage on their fleets, the PAP insurer is now responsible for the difference between the insured’s deductible and the amount of damage to the rental car—up to the value of the car.
In 1989, an exclusion regarding damage to rented cars was added to the PAP. That exclusion removes coverage (including coverage for loss of use) if the rental company is not allowed by state law or the rental agreement to collect for a loss. Under previous editions of the PAP, the rental company could collect under the named insured’s PAP even if the insured was not legally responsible for the loss, such as in the case of hail damage to the rented car. This exclusion was added to prevent the rental company from collecting under the named insured’s PAP in such situations.
The golden nugget for you here is that you should compare auto insurance coverage and see that you are covered under your auto insurance policy for the physical damage and this will follow you when you drive a rental car. So review car insurance coverage and as long as you have all the coverages, do not worry.

Happy holidays.

Thanks.
Kamlesh

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