Vehicle Coverage

Vehicle coverage, a type of auto insurance policy component, pays for damage or loss to insured vehicles from perils like collision, theft, vandalism, or natural disasters. Collision vehicle coverage covers repair costs when your car hits another object–such as in 2022 when over 5.4 million U.S.

Crashes involved property damage (NHTSA). Comprehensive vehicle coverage reimburses you for non-collision events–like hail, animal strikes, or if your car is stolen; for example, over 1 million vehicles were stolen in the U.S.

During 2022 (NICB). Vehicle coverage typically excludes routine maintenance, mechanical breakdowns, and wear and tear–so items like brake pad replacements are not covered.

Liability limits within vehicle coverage define maximum payout per accident or injury; for instance, a $50,000 limit means insurers pay no more than that amount per claim. Deductibles in vehicle coverage represent out-of-pocket expenses before insurer payments start; common amounts range from $250 to $1,000.

Lenders require comprehensive and collision vehicle coverages for financed vehicles to protect collateral value–84% of new cars sold in the U.S. In 2023 were financed (Experian).

Coverage extensions like rental reimbursement help pay for substitute transportation while repairs occur following a covered loss, as confirmed by the Insurance Information Database. After-market modifications are generally excluded unless specific endorsements are purchased–custom wheels or stereo systems often need added riders.

Classic or collector car policies offer agreed-value payouts in case of total loss instead of depreciated actual cash value–unlike standard vehicle coverage. Vehicle coverage claim settlements reflect either repair cost or actual cash value minus deductible; for example, if repairs total $5,000 with a $500 deductible, the insurer pays $4,500.