Car insurers divide the insurance policies into 3 different sections.
Section one is insuring the car; identified in the policy as collision and comprehensive coverage. Collision pays for the policyholder’s damage caused by an accident while the car is moving. At the time of a claim the deductible is applied first before the insurance company pays for any damages to the insured’s car. Comprehensive covers all other types of damage to the insured ‘s car. For example, flying objects, hitting deer, windshield cracks, explosion of the insured’s car, damage to paint on the car.
Section two is liability. If the policyholder is found to be at fault, this section of the policy pays for bodily injury and property damage to other party.
Section three covers the miscellaneous items. Medical payments, uninsured motorist coverage and under-insured motorist coverage, towing, loss of use/car rental.
Car insurance premiums are determined by prior driving record, credit score, age, location of garaging address, use of the vehicle (pleasure or business) and year/make and model of vehicle.
Car insurers have to make a profit so that they continue to stay in business to support you and your insurance needs. So they are very meticulous on coverages, policy and insureds.