Vehicles can sustain damages in a variety of ways, some of which are sometimes difficult to foresee; therefore, it is essential to be properly protected against certain basic risks. One of the most effective ways to do this is by acquiring physical damage insurance. Here is a close look at this form of specialty insurance coverage.
What Is Physical Damage Insurance?
Physical damage insurance refers to a series of insurance coverages designed to protect a vehicle. Generally speaking, physical damage includes both collision and comprehensive coverage. The former insurance covers damages to your vehicle arising from accidents, including rollovers and collisions with other objects.
The latter coverage pays for the cost of damages resulting from claims not related to accidents, such as incidents of theft, vandalism, fire and earthquakes.
Is Physical Damage Insurance Required?
Physical damage insurance is optional if you have completely paid for your vehicle. If you lease or secure a loan for your vehicle, your lender will likely require that you carry physical damage coverage.
This type of insurance can still be extremely beneficial even in cases where a vehicle is not leased or under a loan. However, if the value of your vehicle has dropped below the point where it is financially imprudent to insure, you may not benefit from the coverage.
If you own a truck or other type of heavy vehicle, you can benefit significantly from obtaining a specific form of physical damage insurance called Fire and Theft with Combined Additional Coverage (CAC) insurance, which covers specific, non-collision-related incidents. Claims related to windshield damage are not generally covered by Fire and Theft with CAC insurance.
Physical Damage Insurance Deductibles
Every physical damage insurance policy typically requires a deductible, which represents the amount you pay out of pocket when filing a claim. If you wish to lower your insurance premiums, it is recommended that you choose a high deductible.
When choosing physical damage coverage, you must also submit a Stated Amount. This is the most accurate estimation of your car’s present value.
Your vehicle’s condition and age, along with permanently attached equipment, will be factored in to determine the Stated Amount.
Physical damage policies don’t typically have limits; instead, insurers usually use either the cost to replace or repair a damaged vehicle, or its actual cash value (ACV), which is the car’s replacement cost after factoring in depreciation.
What Does Physical Damage Insurance Not Cover?
As beneficial as physical damage insurance is, this type of policy does have some exceptions to what is covered. Common exceptions to physical damage coverage include:
- Medical expenses for you or any passengers who are injured in an accident
- Legal fees in the event somebody sues you following a collision
- Income you or your passengers lose because of missed work
- Possessions stolen from your vehicle
- Damage to another automobile following an accident
To obtain coverage for these types of claims, you will need to acquire general liability insurance. Unless the comprehensive coverage portion of a physical damage insurance policy specifies it, damages and losses resulting from the following incidents are not covered:
- War (and similar events)
- Stunting or racing
- Decrease in value
- Tire-related damages (e.g. blowouts)
- Breakdowns (electrical or mechanical), freezing or wear and tear
If your car is stolen, however, these exceptions don’t apply. Ask for several quotes from each insurance company you contact; this will help you decide which policy best meets your unique needs. Coverage requirements and premiums for physical damage insurance also vary depending on the state, be sure to become familiar with this as well.
Get Physical Damage Coverage From Pro Insurance Group
Contact the experts at Pro Insurance Group for more information on physical damage insurance coverage for your vehicle. Our agents are dedicated to serving as one-on-one advocates for each of our clients, regardless of their insurance needs and budget. We also strive to build and maintain long-lasting relationships with all of our clients.
If you are leasing or financing a car, you can protect this valuable asset by obtaining physical damage coverage. Our auto insurance policies help shield your vehicle from a variety of incidents, including weather-related events, fire, theft, falling objects, accidents involving animals and collisions with other automobiles.
These policies feature both collision and comprehensive coverage, which will help ensure that physical damages to your car are repaired, even in cases of events that are beyond your control. Additionally, collision insurance will cover damages to your car regardless of who is at fault. Call Pro Insurance Group today at 833.619.0770 or contact us online to request a quote or to learn more about our physical damage insurance policies.