What Should You Look For in an Auto Insurance Company?

Posted: Sat Jun 05, 2010 04:09 pm Post Subject:

as the name indicates, you will be comprehensively covered.

Posted: Tue Jun 08, 2010 12:42 pm Post Subject:

It's good to know that getting covered 'comprehensively' is not the same as getting covered for losses resulting out of anything "other than collision". But it would help clarify my doubts if you could show me through some examples.

Posted: Tue Jun 08, 2010 02:13 pm Post Subject:

Okay, "Jack" . . .

First, let's start by saying that both collision and other than collision have to do principally with the physical damage section of an auto policy, not the liability section.

Collision is contact between the vehicle you own/are driving and another "object" such as another vehicle, a tree, signal pole, a block wall, or human being (on foot, skateboard, bicycle, etc), and also includes the "upset" of the vehicle (as in a rollover incident). It does not require anyone to actually drive the vehicle in order to create a collision (the vehicle could move on its own -- such as parked on a slope, and brakes fail to hold -- or be struck by another vehicle in motion).

Other than collision (what is commonly known as "comprehensive") also does not require the vehicle to have ever been in motion, because it involves virtually any non-collision loss event, such as fire, flood, theft, vandalism, glass breakage, falling objects, and earthquake. Even damage caused by collision with an animal (dog, moose, bear, cow, etc) which is not covered under the standard definition of collision above is covered under this coverage part. About the only thing that other than collision does not cover is mechanical breakdown and wear and tear.

In other forms of insurance, the collision losses might be described as "general damages" and the other than collision losses might be described as "special damages". The key understanding is the word "damages."

Normally when the term "comprehensive" is applied to insurance, as in "comprehensive major medical" or "comprehensive long term care", it means the most coverage or fewest exclusions -- some might infer that almost everything is covered, or make the statement, "I'm fully covered" even though they recognize some things are not covered.

That same understanding applies very broadly to auto insurance, but the policy language clearly limits the insurance company's responsibility to the insured. Many people who drive with minimum liability limits believe they are "fully covered" too, but this is not the case. And adding comprehensive coverage to state minimum liability limits does nearly complete the policy, but it is not really very "complete" coverage.

For example, although theft is a covered loss, coverage for certain types of theft losses are very limited -- as in the case of a car stereo or sound system components, some of which may not be covered at all, and none of which are covered 100%. They are subject to a first dollar deductible per claim, and if the loss exceeds the amount stated in the policy after the deductible is satisfied, coverage ends at that point. Additionally, damages are normally repaired under the definition of either "Replacement Value" (windshield or other glass breakage perhaps) or "Actual Cash Value" which is "Replacement Value" minus depreciation for age, wear and tear, and and physical damage (which existed prior to the current loss). This is what frequently causes insureds to complain about being "ripped off" by their insurance company -- the dispute over Actual Cash Value.

Few of us would describe that as "comprehensively covered" in the sense that the financial restoration is as near to 100% as possible -- the concept of indemnity that generally underlies all insurance.

Need more examples?

Posted: Tue Jun 08, 2010 05:05 pm Post Subject:

In my state, and others I have worked in, striking a human, is also comp, (any animal, which we are..some actually say, striking an 'individual')... :wink:

More comp perils....wind, hail, falling and flying objects...some things that are typcially spelled out as excluded...war, radioactive contamination, radar detecting devises, tires unless damaged by a covered loss, fire-typcially if the origin of the fire were due to mechanical failure this is not covered but the ensuing damage is (same with a tire 'blow out).