There are certain absolute minimums you are required to have under state law when it comes to your car insurance policy. However, it can get confusing as to which coverages you should choose to make sure that you are prepared for the worst. The more coverage you add to your auto insurance policy, the higher your premium will be. You might be surprised that it is possible to be covered for all of the most common risks without breaking the bank on your insurance premium.
Comprehensive car insurance explained – comp coverage kicks in when your vehicle is damaged from something other than a collision with another car. If your car is destroyed in a violent storm or stolen, comprehensive coverage allows you to recover for the value you have lost. It also applies if you hit an animal, such as a deer, or if your car is vandalized.
Even though comprehensive auto insurance is an optional coverage, almost 80 percent of drivers with auto insurance choose to add this onto their policies according to the Insurance Information Institute (III). Also according to the III, the average claim filed under a comprehensive auto insurance in 2015 was about $1,700.
These are the top factors to consider in deciding whether you need comprehensive coverage:
If you live in the city or an area with higher property crime rates, comp is a great way to have peace of mind that you will not have to pay entirely out of pocket if your car is damaged by someone else. Not having a personal garage or having to park your car on the street overnight are major factors that increase your risk of having your car damaged or stolen.
Comprehensive car insurance explained – if violent storms are a frequent occurrence in your area, comprehensive auto insurance might be a good idea. Flooding can almost instantly total a car because of the mechanical damage it can cause. An unexpected rain storm or high winds can leave your car beaten up and in need of serious repair. Comprehensive auto insurance is valuable even if you only have to use it for one major incident.
If you have a newer car or truck, you should move comprehensive auto insurance higher up on your list of policy priorities. The instant that you drive your car off the dealership’s lot, it has already started depreciating in value. If something happens to your car right away, you will want to be sure to fix it so that you can retain its value as much as possible and continue driving it safely.
If you have an older car, you might be less concerned with how long you have to drive your car. This is especially true if your car is close to paid off. Fixing cosmetic damage to an older car is a much lower priority than keeping a newer one in pristine shape. You can also check out the difference between comprehensive insurance vs collision insurance and the difference between liability car insurance vs full coverage.
If something major were to happen to your car outside of a traditional auto accident, how much money would you be able to pay out of your own wallet to fix it? If you are able to dip into your own finances for a major repair, then you may be less inclined to purchase comprehensive auto insurance. However, it is worth at least requesting a free quote to find out by how much your premium would increase if you add comprehensive auto insurance.
Many auto insurance companies will allow you to choose the amount of your deductible within certain limits. The deductible is the amount that you are responsible for chipping in to have your car repaired if you make a claim under your comprehensive auto insurance coverage. The more that you agree to pay for a deductible, the lower your monthly or semi-annual comprehensive auto insurance premium will be. Choosing a higher deductible for your comprehensive auto insurance allows you to enjoy all the benefits of having more auto insurance coverage without dipping too far into your wallet for the premium.
If you have teenage drivers in your household who are listed under your auto insurance policy, you will have to adjust your risk level accordingly. Teen drivers are much more likely to be involved in a collision claim than a more experienced driver. If you know that someone who has not been driving for at least five years might be getting behind your wheel, it is always a good idea to increase your coverages accordingly.
Your agent or broker is the best source of information for whether you are appropriately covered for the amount of risk that you and your family have taken on. This is why it is a good idea to check in with your agent any time that there is a major change in your life, such a child getting his or her driver’s license or if you are thinking about purchasing a new vehicle.
It is always better to protect against risk on the front end so that you do not find yourself in a situation where you have to leverage your personal financial stability to recover after a major unexpected event.
We hope this article on comprehensive car insurance explained was informative. Whether you decide to add comprehensive auto insurance coverage to your policy or not, you always must be careful that you are carrying at least the minimum coverage required by state law.
Your car insurance agent should be knowledgeable about the minimum requirements for your state. Your failure to comply with these requirements could result in fines or having your driver’s license suspended by the motor vehicle administration in your state.
