Many people have the question: what does comprehensive car insurance cover? I know that I did when shopping for insurance. When choosing coverage it is always smart to know your options. Today we are going to cover some of the reasons why comprehensive car insurance is beneficial and what it does and does not cover. It is also smart to know why you may or may not need comprehensive car insurance.
What Does Comprehensive Car Insurance Cover?
So what exactly is comprehensive car insurance and what does it cover? Comprehensive car insurance is a relatively optional and inexpensive add-on to your regular insurance plan. Comprehensive insurance protects against any damage that is not the result of an accident; such as vandalism, fires, rockslides, etc. This add on will help pay for repairs or can help replace your car entirely.
What is Covered
As stated earlier, comprehensive insurance covers damage to your car that is not due to an accident. Comprehensive usually includes damage due to the following:
- falling objects;
- car theft;
- glass damage;
- flooding or any other natural disaster
With that being said, we should also go over what comprehensive insurance does not cover:
- collision with an object;
- collision with another car;
- medical/legal expenses;
- stolen property that was inside the car
Comprehensive car insurance also does not include towing, rental cars, or anything relating to personal property.
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Why Buy Comprehensive Car Insurance?
Pretty much everyone needs comprehensive car insurance. Even though most states do not require it when you purchase car insurance, it most important for those who live in rural areas. For instance, if you live in an area where there are a lot of deer, we highly recommend that you get comprehensive car insurance. This is because there are nearly 1.5 million deer collisions a year, which results in over $1 billion in damages a year. Meaning, comprehensive insurance coverage is something that will be beneficial for you in the long run.
In other ways, you actually may be required to purchase comprehensive car insurance. For instance, if you are financing or leasing a new vehicle, your lender may require you to purchase comprehensive car insurance. This is because they are the official owners of the vehicle and they want to make sure that they and their property are protected.
In order to figure out if you need to purchase this add-on, find out the value of your vehicle. Think of it this way, would you be able to pay that amount in order to repair or replace your car if it was damaged or stolen? If you are not able to afford to pay the out-of-pocket expenses, comprehensive and collision insurance coverage are both good investments. Another way to calculate whether or not it will be cost effective for you will be to take the amount you would pay for comprehensive car coverage and multiply it by 10; if your car is worth less, it may not be cost effective for you.
Related Article: Ways to Get Cheap Car Insurance
How Much Does it Cost?
The cost of comprehensive insurance coverage will depend on your deductible. Think of it this way, the higher the deductible, the less you will spend on your premium – which means that you will likely more out of pocket if you file a claim. Regardless of your deductible, the amount of your comprehensive coverage will depend on the car’s actual cash value (ACV).
Your ACV equals the purchase price of the car, minus depreciation and your deductible. For instance, comprehensive car insurance coverage will pay an amount up to the actual cash value of the car to either repair the car, or in the case of a total loss, replace your car. For example, if the cost of the repairs to your car exceeds the actual cash value of the car, your insurance company will declare the vehicle to be a total loss and then they will pay the sum of the car’s ACV to help replace it.
Nearly 73% of drivers add comprehensive car insurance coverage to their plan. On average, it costs an additional $22/mo and the most common deductible is $500. Recent studies have shown that 7% of drivers who have comprehensive car insurance coverage will file a comprehensive claim within a year. With the average repair costs being $1400, meaning that you would have to pay everything out-of-pocket without this coverage.
In any case, when it comes to insurance, oftentimes it is better to be safe than sorry. If you are suffering from injuries due to an accident, contact us to discuss your case. Consultations are free!