The property coverage part of your personal auto policy covers repair and replacement costs for your vehicle. Understand that this type of coverage only covers the insured’s vehicle. Damages to other parties are covered through liability coverage. There are two types of coverage: collision coverage and other-than-collision coverage (also called comprehensive coverage).
Collision coverage covers costs of damage due to collision with vehicles, objects, or from rollover. Other-than-collision (comprehensive) coverage covers costs of damage from falling objects, vandalism, theft, earthquake, flood, riots, damage from animals, broken glass, etc. Despite the still commonly used term “comprehensive” to describe this type of coverage, damage from freezing, normal wear and tear, etc are not covered. Some policies reimburse required rental expenses while awaiting vehicle repair or replacement.
For qualifying expenses, your insurance company is required to cover costs above your deductible. Your deductible is set when signing the policy. For example, if your deductible is $250 you will pay repair costs for all damages below and up to $250. If you back into a parking meter and cause $225 in damage to your vehicle, you will pay the full cost of repair. If in the same scenario you cause $1000 in damage to your vehicle, you will pay $250 (your deductible) and your insurance company will pay the remainder, $750. You can reduce your premiums by raising your deductible. Your deductible should be as high as what is financially manageable for you. It would not be uncommon for a driver with an excellent driving record and sufficient capital to raise their deductible to $2500.
Repair costs will be paid up to the replacement cost of the vehicle. If a total loss is declared (i.e. the vehicle is totaled) the cash value will be paid and the insurance company has the right of salvage, or the right to take the vehicle. Most policies include an appraisal provision to handle disputes relating to the cash value paid by the insurance company.
