What is the Advantage of Carrying Physical Damage

The obvious advantage to carrying physical damage coverage on your vehicle is that when your vehicle sustains damage due to an accident, the insurance company will pay at least part of the repair or replacement costs.  You will have peace of mind knowing you will not have to pay a large amount of money out of your own pocket.  And let’s be honest, most of us say that we will save money to pay for these types of events, but very few of us actually do.  A key disadvantage to having physical damage coverage is when you have an older vehicle.  Typically, if your vehicle is older than 15 years old, it is not worth having physical damage coverage on your vehicle.  The reason behind this line of thinking is because with older vehicles it is harder to find parts so insurance companies will deem the vehicle a total loss for even somewhat minor damage.  When insurance companies determine the amount that they pay to the insured on a total loss vehicle, they look at the Blue Book value minus your physical damage deductible.  So on older vehicles the cost of the physical damage coverage would be too high compared to the payout the insured would receive from the insurance company.