Now that we have learned what is included as part of the basic automobile policy, let’s learn about some of the optional coverages an owner/operator can purchased to protect themselves.
Optional Physical Damage Coverage
Depending on the cause of loss, this coverage section provides coverage for repairs to the damaged vehicle or in the case of a total loss, the replacement or cash settlement for the entire vehicle. The insured chooses from a menu of options. The most common combination is collision plus comprehensive or all perils coverage. Each of these coverages are subject to deductibles, limitations and exclusions. The following are the physical damage coverages the insured can purchase:
This coverage section is considered optional for the insured who owns the automobile. However, if the automobile is leased to the insured or has a lien against it, typically, the lessor and/or lienholder will contractually require the insured to purchase this physical damage coverage to protect their insurable interests along with the owner.
Both Specified Perils and Comprehensive coverage is “peril based” coverage and does not take “fault” into consideration for the loss.
In addition, when the owner/operator of the automobile could be considered liable or ‘at fault’ for a collision, the following coverage is also commonly purchased:
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