It seems that comprehensive coverage, also known as comprehensive insurance, causes a great deal of confusion amongst drivers. ‘How much does it cost?’, ‘What exactly does it cover?’ and ‘Do I really need it?’ are some of the most common questions. Yes, car insurance can seem quite complicated at times. Jargon using insurance agents and small shrifts are often to blame. Still, as you are about to see auto insurance coverages can be explain in plain English. After all, knowing precisely what you need will help you find the right insurance cover and save you money too.
What does comprehensive insurance actually cover?
In brief, comprehensive auto insurance covers damages caused to your vehicle by acts different than collision. For damages caused by a collision you will need the appropriately named collision coverage. Although, some insurance companies offer slightly different levels of comprehensive cover, most policies include protection against:
- ‘acts of God’ (like an object falling on your car)
You can see now why comprehensive coverage is sometimes refered to as “Other Than Collision” coverage. The amount of money you receive, if you make a claim, will depend on the fair market value of your vehicle or the costs of repair and the deductible amount you have chosen when purchasing your policy. For example, if the total damages are $2,500 and your deductible is $750 than your insurance company will cover the remaining $1,750. As a rule of thumb, higher deductible means cheaper comprehensive insurance, but that doesn’t mean you should choose a deductible amount you are not comfortable paying.
Do I really need comprehensive coverage?
If you are wondering if it is legally required then the answer is ‘No, comprehensive coverage is not required by law’. On the other hand, if you are paying off a new vehicle your lender or leasing company may require you to add such cover on your auto insurance policy. It is possible that your vehicle may have gone down in value since you bought it and in case of an accident, its fair market value could be less than the amount you still need to repay. If you fear that this may happen to you and depending on the amount you owe, you may consider getting a gap insurance.
Of course, if you drive an older vehicle which is not worth much any more, you may choose not to purchase comprehensive insurance. If purchasing full coverage auto insurance costs as much as your vehicle than it doesn’t make much economically sense, does it?
How much does comprehensive insurance costs?
When it comes to auto insurance, there are a huge number of factors taken into account. From the make and model of your vehicle, your age, gender and driving experience, to your occupation and credit score. Will adding comprehensive coverage to your auto insurance policy increase your premiums? Yes, but you may well be surprised by how little compared to the amount of cover and peace of mind it will give you. The only way to really find out how much will comprehensive insurance cost you is to compare quotes from different companies.
As insurance professionals suggest, you need to obtain quotes from at least 3 different companies in order to see the big picture. All you need to do is enter some basic information about your vehicle, yourself and the amount of cover you need and in seconds you will be able to choose the right policy for you. You will be surprised by how easy it is and how much money you could save.