Comprehensive Auto Insurance Coverage

Posted by Harry Wagner

You do not have to take courses and pass a licensing exam just to have a basic understanding of auto insurance. Everyone wants to know what they are buying, and in order to know what you are buying when you purchase auto insurance, you need to take the time out to do your research. Before you start comparing auto insurance quotes, take a seat and learn everything you need to know about the coverage options that are available and the terms that you will come across as you are comparison shopping. One of the coverage options you will need to learn is Comprehensive Auto insurance coverage. Here is a basic guide to comprehensive coverage detailing what it coverage, who needs it, and considerations policyholders should keep in mind.

What Does Comprehensive Auto Insurance Cover and is it Required?

Comprehensive auto insurance is a physical damage coverage that will pay for repairs to the vehicle on the policy when it is damaged or totaled due to losses like fire, theft, vandalism, glass breakage or collision with a live animal. Some policy will actually define comprehensive coverage as “Other Than Collision” because it pays for losses that are not a result of a collision.

All policies come with a deductible for comprehensive, and some companies will offer “no deductible” options for a higher premium. Because the premiums for Comprehensive coverage are typically low, many policyholders choose to carry low deductibles. Whatever the deductible is listed on the policy, the policyholder will be required to pay this deductible before a claims payment will be made. Any claim that is smaller than the deductible on the policy will not be paid. In some cases, there are exceptions for glass claims to repair rock chips or cracks.

Who Needs Comprehensive Auto Insurance Coverage?

If you are building a policy, you might be wondering if it is really necessary to carry the optional comprehensive cover. While comprehensive is not a state requirement, if you are financing your vehicle you are required by your lender to carry and maintain physical damage coverage. If you do not maintain this coverage, your lender has the right to force place insurance on your loan and raise the balance of your loan. If your vehicle is paid off, yuou still may have a need for comprehensive auto insurance. For one, you must have comprehensive coverage to carry collision coverage to protect your car. Secondly, if replacing your vehicle if it were stolen or caught fire would damage you financially, you should be carrying comprehensive. If the fair market value of your vehicle is low, it is probably best to reject the coverage.

Take time to price the cost of comprehensive insurance coverage from several different insurance carriers. If you find that you need this coverage, compare different deductible options and see which one is affordable and practical for you. Insurance is not one-size-fits-all, and taking the time to compare the rates and to play with limits and options will really help you build the right policy.