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Find out the difference between collision and comprehensive auto insurance.

Collision auto insurance

You need collision insurance coverage as it pays for damage caused to your car in a car accident, when you are to blame. A collision automobile insurance policy will reimburse you for any repairs.

Keep in mind that this value can be much lower than the cost of the replacement of your vehicle. If your car is leased or financed, it is necessary to get gap insurance to pay for the difference between what you owe and the car cost.

Collision coverage usually goes along with an insurance deductible. The insurance deductible is the amount you must pay toward a claim before your insurance starts paying. If you wish to pay a higher deductible, you will get a cheaper collision policy.

Collision insurance coverage is not obligatory because it is not required by law in any state. Still, you will be required to carry collision insurance if you have bought your car from a dealership or your car is financed by a lender.

Comprehensive auto insurance

As for comprehensive insurance, it resembles collision insurance; the difference is that comprehensive pays for the damage to your car caused by any unknown party or "act of God", such as natural disasters (flood, hurricane, etc.), vandalism, fire, theft. You have to read comprehensive insurance policy carefully in order to all coverage details.

They both will pay up to the fair market value of your car. This insurance is not required by law in any state either; but you will be required to carry it if your car is financed.

You may reduce costs of collision and comprehensive auto insurance if you know money saving strategies!

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