As a driver, you might get caught up in between purchasing comprehensive car insurance or collision insurance. Ironically, numerous drivers don’t even know the differences between these two packages or what they offer. It is advisable to understand all parts of auto insurance before purchasing to pick the best package for you.
In this post, you’ll learn about everything you need to know about comprehensive car insurance and how it applies. At the end of this post, you should be able to tell it apart from other packages with its benefits. Therefore, ensure you read through this article entirely for well-detailed information.
What Is Comprehensive Car Insurance?
Comprehensive insurance is a sort of car insurance that covers damage to your vehicle from anything other than an accident. It will protect your car if, among other things, a tornado destroys it, a deer dents it, and more. It also comes in when your vehicle is vandalized, broken into, or crushed by a collapsing garage.
How Does Comprehensive Car Insurance Work?
Comprehensive, collision and liability insurance are the three components of an automobile insurance policy. Liability insurance is compulsory in most states; however, collision and comprehensive coverage are optional if you wholly own the vehicle. The auto loan company may need comprehensive insurance if the car is on a mortgage.
What Does Comprehensive Car Insurance Cover?
To avoid any last-minute surprises, it is always helpful to understand your policy’s contents and limitations. You must first read it thoroughly. You won’t have to worry about the following because your comprehensive auto insurance will cover them in most cases:
- Natural disasters, such as extreme weather
- Vandalism, theft, and fire
- Losses incurred by third parties.
- Damage by falling trees and other objects.
- Damage as a result of civic unrest, such as rioting.
What Does Comprehensive Car Insurance not cover?
You cannot submit a car insurance claim if your vehicle suffers damage in an accident unless you have comprehensive coverage. Similarly, there are several things that comprehensive vehicle insurance does not cover:
- Depreciation
- Wear and tear on the vehicle
- Electrical or mechanical failure
- Damage from driving without a license
- Intoxicated driving
- Damage to tires and tubes. However, if the automobile is damaged simultaneously, the company’s liability is limited to 50% of the replacement cost.
- Loss or damage from war, rebellion, or nuclear danger
Comprehensive Car Insurance vs. Collision Insurance
It’s good to have comprehensive vehicle insurance when buying a new car, whether you finance it or pay cash. Comprehensive coverage can protect you from minor and significant damages from occurrences beyond your control. This is regardless of whether you have accident coverage.
The location of your home may also influence your decision to get comprehensive insurance. Comprehensive insurance may be required if a person lives in a rural area where animal collisions are common. It is also advisable in a stormy environment where hail is widespread.
It’s the same if you reside in a high-crime area where rampant break-ins and theft. Collision insurance covers a single-car rollover, a collision with another vehicle, and a collision with an object. Break-ins, robberies, and damage caused by the weather are not covered.
If you lease a car, you must have collision insurance. Collision insurance may help pay for repairs to your vehicle after an accident, and it also covers damage from potholes. Neither will cover medical bills from an accident.
How Much Does Comprehensive Insurance Cost?
According to the Insurance Information Institute, the average cost of comprehensive insurance is $134 per year. According to Insurance.com, the cost varies depending on where you live. Comprehensive vehicle insurance will cost you less than $200 per month in any situation.
Collision and comprehensive insurance each have deductibles (but liability insurance does not). Hence, a driver can choose various deductibles for each category depending on their calculated risk levels.
For example, someone may feel unlikely to make a comprehensive claim but not want to avoid coverage altogether. They may choose a $1,000 deductible to lower their premiums. The higher the car’s monetary value, the more expensive comprehensive insurance.
Understanding how insurance companies classify drivers may assist you in estimating the cost of comprehensive coverage. The cost of vehicle insurance generally relies on your location, driving record, and the quantity of coverage you select.
Louisiana, for example, is the most expensive state for car insurance. Here, the average motorist pays $1,545 a year for full coverage. Drivers in North Dakota, on the other hand, spend an average of $686 per year on insurance.
Advantages and Disadvantages of Comprehensive Car Insurance
Comprehensive car insurance covers theft, natural catastrophes, and weather-related damage. You won’t have to pay out of pocket if a tree falls on your automobile. There won’t be issues if a thief snatches it in the middle of the night.
There are certain disadvantages. Accidental damage doesn’t receive coverage from comprehensive insurance. Furthermore, purchasing comprehensive insurance in conjunction with collision insurance might be pricey.
If your car is older and paid off, you might be able to save money by skipping comprehensive coverage. Consider this if theft and weather-related disasters aren’t a concern where you live.
In summary, the advantages of comprehensive car insurance are:
- Comprehensive coverage includes theft, weather-related disasters, and other significant events beyond your control.
- Break-ins and hail-damaged windshield wipers are examples of “unexpected occurrences” covered under comprehensive coverage.
- If you own a new car and live in a high-crime area, comprehensive insurance is convenient
While the disadvantages are:
- Comprehensive insurance does not cover accidental damage.
- It may not be necessary for an older vehicle with high mileage.
- Comprehensive insurance does not cover personal things taken from your car.
- Damage caused by potholes doesn’t have coverage.
Other Notes on Comprehensive Car Insurance
You may assume you’re not at risk of non-collision damage if you’ve paid in full for your car. You may opt to skip complete coverage in this case. If you prefer to self-insure, you can also opt-out of comprehensive insurance.
However, if your vehicle is damaged, omitting comprehensive coverage in this scenario may result in a high repair bill. So weigh the cost of any potential repairs against the premiums or deductibles required to maintain comprehensive coverage.
