Collision and Comprehensive Insurance in Phoenix, AZ

Collision and Comprehensive Insurance

Car accidents are an unfortunate consequence of the tremendous freedom and mobility that automobiles provide. In 2017, there were more than 37,000 fatal vehicle accidents nationwide. Among these fatalities, approximately 1,000 occurred in Arizona. All drivers must maintain state minimum levels of liability insurance. This applies to bodily injury liability and property damage coverage for accidents that you cause.

Drivers have the option of adding other forms of coverage that are used to cover loss and damages to your vehicle. The two most common forms of additional coverage are comprehensive and collision insurance.

Understanding “Full Coverage” Auto Insurance

Collision and comprehensive auto insurance are generally purchased together on a policy. The term “full coverage” describes when a motorist adds these two forms of coverage. This is in addition to the minimum requirements of liability insurance. The difference between the two is that collision insurance covers damage that occurs while the driver is operating the vehicle.

Collision Insurance

When you are the cause of a crash that damages your vehicle, collision insurance is used. This is coverage that would be used if you strike a tree or ended up driving your car into a ditch. The cost of collision coverage has continued to escalate due to the higher costs of repairing today’s newer vehicles.

Comprehensive Insurance

This coverage is applicable for use when the insured party incurs losses or damage that do not occur while driving. Some of the most common uses for comprehensive coverage are as follows:

  • Windshields: Damage to the vehicle’s glass are generally covered by comprehensive coverage. Windshields are positioned in a vulnerable location and can be struck with considerable force. For example, a piece of metal or a rock may fly out of a truck bed on the highway. This flying object has some momentum of its own. It then strikes the windshield of another vehicle traveling at a high rate of speed.
  • Animal collision: The most common major collision that occurs between vehicles and animals involve deer. These animals are dangerous for various reasons. They can easily weigh more than 100 pounds. They are a taller animal that often will be dangerously propelled on to the windshield following impact.
  • Hail damage: A hail storm can potentially create significant damage to the exterior of a vehicle.
  • Fire damage: It is possible that an electrical problem can create a fire. When a fire is exposed to highly flammable materials such as gasoline, the damage may result in a total loss.
  • Theft: Comprehensive coverage can be used when a vehicle is stolen. Arizona is among the 10 leading states for the total number of vehicles stolen. The state’s close proximity to Mexico makes it easy for thieves to transport stolen vehicles across the border to be sold.
  • Vandalism: Arizona law makes vandalism a felony when the damage is valued at more than $250. Unfortunately, it may not deter teenager troublemakers from randomly causing damage.
  • Falling objects: A storm or high winds can cause problems such as falling tree limbs that can cause significant damage to your vehicle.

Determining Whether Damage is a “Total Loss”

When a vehicle is damaged from a collision or other event, motorists that have current collision or comprehensive coverage can file an insurance claim. An assessment may be made to determine whether the cost to repair the vehicle is truly the best option. When the repair costs are higher than the vehicle’s actual cash value (ACV), the insurer may consider it a total loss. The insurer will simply compensate the policyholder so that another vehicle can be purchased.

State Total Loss Thresholds

States designate when an insurance company must declare the car to be “totaled.” For example, in Nevada, this is set as 65% and in Colorado, it is 100%. Arizona employs a total loss formula (TLF) method along with 21 other states.  The total loss formula is as follows:

1.  Add repair cost and the vehicle’s scrap value

2.  Determine the ACV of the vehicle

3.  If these two amounts are equal or if the ACV is lower, the car will be totaled.

Replacement Value

It is important to remember that cars tend to lose value or depreciate rather quickly. The ACV can be considered as the replacement cost that is adjusted to account for depreciation. The amount that the insured party receives for a totaled vehicle may be insufficient to pay off a loan balance. Many insurers lately have been promoting “better car replacement” or “guaranteed” full car replacement programs.

Understanding Deductibles

Comprehensive and collision policies typically have a designated deductible amount. This is an amount that the insured must pay “out of pocket” when filing a claim. Deductible amounts are usually in the $500 to $1,000 range. This is an amount that must be paid initially by the policyholder before the insurer then pays the remainder.

For example, we will assume we have incurred $10,000 in damage to the vehicle and the policy deductible is $1,000. The policyholder is responsible for the $1,000 and then the insurer pays the remaining $9,000. The policy premium will typically decline as you increase the policy deductible.

Factors Impacting Policy Cost (Premium)

Insurance companies use statistics to determine the rates of their policies. They consider a host of factors when providing you a quote. These factors mainly are assessed to determine the likelihood that you will file an insurance claim. They will consider your demographics information. For example, teenage males will have higher premiums because they are inexperienced drivers and tend to take more risks.

Your previous history is a major factor in the rate you pay. Insurers look at your recent driving record to see if you have any violations. They also look at your recent history of claims. For comprehensive and collision policies the premium will definitely increase when you are insuring an expensive car.  Arizona drivers pay approximately 12% less compared to the national average. The following charts analyze two examples of how rates are impacted by certain factors.

Your Credit Rating

The following analysis was done showing how the amount of money paid by Arizona motorists changes based on their credit.

Exceptional Credit Score (800-850)$1,024.30
Very Good Credit Score (740-799)$1,238.79
Good Credit Score (670-739)$1,529.22
Fair Credit Score (580-669)$1,915.90
Poor Credit Score (Less than 579)$2,443.66

Your Geographic Location

The same organization also did a rate comparison based on where the policyholder lives in Arizona.

Phoenix$1,602
Glendale$1,536
Avondale$1,502
Peoria$1,409
Mesa$1,408
Tucson$1,362

Well-Established Independent Car Insurance Agency in Casa Grande

As this information suggests, there are many types of automobile insurance coverage and many factors and considerations. Fortunately, the insurance professionals at The Gebhardt Group are available to simplify the process for you. We will ensure that you are properly protected with coverage that is affordable. Contact the office today at (520) 836-3244.

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Steve Gebhardt

Gebhardt Insurance Group was honored by AAA Insurance for being the top New Policy Agency in Arizona for 2013 and achieving the "Emerald Achievement Award."

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