What are the Pros and Cons of Physical Damage Insurance?

What are the Pros and Cons of Physical Damage Insurance?

Having physical damage insurance is a critical decision any business owner will have to make. If you're seeking advice from professionals, we have collected these recommendations you might consider in deciding whether or not you'll acquire a damage insurance plan.

First is Javeria Ali, a HARO Responder from Wiki Jobs, who provided these:

Advantages of Automobile Insurance

Bonus for Failure to Claim

NCB stands for a no-claim bonus, which is given to vehicle insurance customers at the time of renewal if they have not claimed during the previous policy period. The no-claim bonus is a discount given to customers who have not claimed during the preceding policy period. 

Coverage For Personal Accidents

This personal accident insurance coverage protects you against accidental death, permanent disability, and the policy's maximum payout.

David, Founder and CEO of The Upper Ranks, advises business owners to be vigilant.

Being a business owner, one has to remain vigilant about the 

protection and security of the business assets. I have always favored Physical Damage Insurance for our company vehicles. As it is better to be safe than sorry. With a bigger fleet, accidents and mishaps are prone to occur every once in a while, and it's best to be insured if something happens. Insurance protects you from unexpected expenditures that may put your business progress in turmoil. Surely, there's a cost, but it's worth it when you look at the positive side!

Robert Johansson, CEO of Image Kits, provided these pros and cons.

Pros of Physical Damage Insurance

No Claim Bonus (NCB)

If there has been no claim during the preceding policy period, NCB is offered to vehicle insurance customers at the time of renewal. Customers who have not made a claim during the previous policy period are eligible for a no-claim incentive. 

Third-Party Liabilities

If an accident occurs and damage to a third-party vehicle occurs, the insured vehicle's coverage under the insurance policy can compensate the insured vehicle for bodily harm or death of a third party. 

Cons of Physical Damage Insurance

Time-consuming Process

Most insurance companies require a certain amount of time to settle a claim, which is a difficulty that many policyholders face. 

Easy Claim Settlement

A car insurance policy is required to protect your vehicle from financial ruin in the event of a collision. Selecting auto insurance that maximizes the benefits of optimum claim settlement should be done with caution. Check each insurance company's ratio of fair claim settlement to find the best insurance coverage.

Farhan Advani, Marketing Director of Buy Here Pay Here, has these to share:

Physical damage insurance protects the insured if their car is damaged in an accident. Many companies provide this type of insurance, but not everyone benefits from it. 

Physical damage insurance is usually paid as a percentage of the car's worth. In that way, if you have a 10-year-old, 10 thousand dollar car that has been in an accident and therefore now it is worth 7 thousand dollars, your physical damage insurance might cover 50% of its value. This means that you will have to pay a thousand dollars out of your pocket to repair your car. 

The worst scenario is if you have a brand new sports car worth 60 thousand dollars that you just bought. If it gets into an accident and is worth 40 thousand, then your physical damage insurance will only cover 50% of the current value. As a consequence, you might end up paying 20 thousand dollars or more to fix your car. 

This is why this type of insurance should only be used by people with older cars that are not worth much money. If you have a brand new car, it would be better not to buy physical damage insurance and pay for repair costs out of your pocket.

Here's what Nick Schrader, an Insurance Agent from Texas General Insurance, shared with us:

Physical damage insurance is your lifesaver when you encounter accidents along the road. It helps you pay for the damages the accidents occur in your vehicle. On the other hand, it only has limited coverage. Unfortunately, it doesn't cover medical bills if someone needs it and the other party's car is damaged.

Next is a piece of advice from Aliza Vigderman, Managing Editor of AutoInsurance.com.

Physical damage coverage is essential and usually mandatory in auto insurance. The only situation where physical damage coverage is not imperative and mandatory is when a vehicle is paid off. At that point, the owner can decide to drop physical damage coverage (deductibles) and enjoy large savings in their auto insurance premiums. That being said, if there is an accident that is deemed the client's fault, the client would have no coverage from the insurance company to repair their vehicle. Physical damage coverage (deductibles) should be carried at all times if someone wants their vehicle fully covered in case of a loss.

Here's some advice from Kyle MacDonald, Director of Operations, Force By Mojio:

If your car is under a lease, you're probably required to have physical damage insurance. Even if it isn't, getting the broadest possible protection can be a good idea. This insurance protects both collision and non-collision accidents. For example, if your vehicle was stolen, it could help you be covered. The main drawback is that more extensive coverage of your vehicle will require you to pay more for insurance.

Tamara Sykes, a HARO Responder from Postali, ends our article with this guidance:

If you damage someone's property by accident, physical damage insurance can help you avoid paying directly out of pocket. The only downside is having to pay a bit more in insurance premiums. Still, if you have an insurance policy, you should have physical damage coverage.

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