Comprehensive insurance is one of the protection plans you’ll need if you want full coverage vehicle insurance. But do you know how it works? Read on to find out.
If you’re shopping for car insurance or examining your current policy, you might want to consider adding comprehensive coverage. Let’s take a look at what comprehensive insurance means, why you might need it, and the things it covers. We’ll also look at some affordable comprehensive insurance providers.
What is comprehensive insurance?
Comprehensive coverage is an optional protection plan that insurance companies offer for an extra charge. It helps pay for the replacement or repair of your car if it is stolen or damaged in an incident that’s not a collision.
What does comprehensive car insurance cover?
Comprehensive car insurance, sometimes known as “other than collision,” typically covers damage caused by the following events:
- Natural disasters like floods and hurricane
- Theft and vandalism
- Fire
- Falling objects such as a tree or a pole.
- Civil disturbances such as riots
- Hitting an animal
- Damage to your car’s windows
If you plan to finance or lease a new car, your lender will almost certainly require full coverage. However, if you own your vehicle outright, comprehensive insurance is optional for your policy.
What does comprehensive auto insurance not cover?
It does not cover:
- Damage to your car from a collision
- Medical expenses of either party involved in an accident.
- Legal fees and lost wages if you miss work after an accident.
- Damage to another person’s car due to a collision.
- Valuables stolen from your car.
If you have opted for comprehensive car insurance, you are likely to have collision cover too. Collision insurance covers damage to your vehicle caused by a collision with another vehicle, or an object. It also covers accidents in which your vehicle rolls over. To know more about collision insurance, head here.
What is a comprehensive deductible?
A comprehensive deductible is an amount you agree to pay before your insurance company begins to pay for any damages. You might think of it as the amount of financial risk you’re willing to accept in the event of an accident.
Comprehensive car insurance limits and deductibles
Your deductible is the portion of your claim that you pay before your auto insurance kicks in. Once you’ve paid it, your auto insurance will cover the rest of your expenses up to your pre-determined maximum.
When purchasing comprehensive insurance, you will need to select a deductible amount. Assume your car is damaged and will cost $6,000 to fix, with a $1,000 deductible. Only the $1,000 deductible will be paid out of pocket. Your policy carrier will cover the remaining $5,000 on your comprehensive claim. A higher deductible can help you reduce your car insurance premiums. But make sure you have enough savings to cover your deductible in the event of an accident.
Comprehensive coverage typically has a limit or the maximum amount your insurance will pay toward a covered claim. The limit for comprehensive coverage is usually the vehicle’s actual cash value (ACV).
For example, if your car is stolen, your insurance provider will compensate you for the depreciated worth of your vehicle, minus your deductible. In other words, if you want to replace your stolen vehicle with a newer make and model, you’d probably have to pay some of the cost yourself in addition to your insurer’s compensation.
Keep in mind that your comprehensive deductible and limit are separate from the collision deductible and limit in your policy.
Is comprehensive insurance mandatory?
In many states, basic car insurance coverage consists of property damage liability insurance, bodily injury liability insurance, and uninsured or underinsured motorist coverage. Some states may require drivers to carry personal injury protection coverage. But no state mandates comprehensive insurance as part of a driver’s basic coverage.
However, just because your state doesn’t require it doesn’t mean you shouldn’t get it. If your car gets damaged in a natural disaster or fire and you do not have comprehensive coverage, you will have to take care of the repairs yourself. While minor body damage may only cost a few hundred dollars to repair, fixing critical systems such as the engine or suspension could cost thousands of dollars.
In general, obtaining both comprehensive and collision insurance is a good idea because the possible advantages could well surpass the expense.
Where can I find the best collision coverage for my car?
All major insurers offer comprehensive coverage as an optional add-on for your car insurance policy. It is one of the basic coverages available, including liability, collision, medical payments, personal injury protection, and uninsured/underinsured motorist coverage.
Our team of analysts sought quotations from five different insurance providers to get the most realistic costs for a plan that includes comprehensive coverage. We found that adding comprehensive coverage to your policy could raise your monthly premium by $150 to $200, depending on the state and your insurer.Â
Read: Types of car insurance coverage
We found the most affordable quotes from Progressive and State Farm among the major insurance providers, followed by Allstate. However, your car insurance quotes could vary as they are calculated using several criteria. They include your age, gender, location, credit score, driving history, among others. The best way to find the most affordable car insurance quotes for your needs is to shop around and obtain several quotes online. Â
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