What Is Comprehensive Auto Insurance?

The name may be misleading as it suggests a highly inclusive policy. Most motorists are pretty familiar with legally required Liability which doesn’t cover their own car. So, they need to build it up to a level they like, especially when they want better protection for their vehicles. At that point they come across this option that can include many perils but not all.

This term can mean different things in various countries. In the US, comprehensive car insurance is a type of protection included in full coverage policies to pay for most damages to the vehicle, except collision. So, it is actually only a part of a pretty protective and inclusive policy. It is an optional provision and if you own your vehicle outright you can choose to buy it or not. If you have a loan on it or you leased it you may be forced to buy it to protect third party investments on the car.

Most carriers wouldn’t sell Comprehensive coverage without Liability and Collision except for rare exclusions. You are considered to have full coverage when you have all three components.

When the risks are high you want to make sure that you do a good job. You certainly want to know what the premium pays for. Collision protects your automobile against crashes with another vehicle or object. The rest of the damages that may come to your car are included in Comprehensive insurance coverage which pays for the repairs or a similar vehicle replacement in case of a total loss due to below perils.

  1. Auto Thefts
If you have this the carrier compensates the damages caused by thieves if the vehicle is found. If it isn’t found after about a month they consider it as total loss and pay you the open market value of your automobile.

  2. Vandalism
You can count on it when vandals smash the vehicle. This usually includes scratches, broken glass and other body issues including paint sprays and smashed bonnet.

  3. Fire
Your auto may catch fire in various different circumstances including in a house fire when it is garaged. Then this component is there to settle repair costs or its replacement value.

  4. Falling Objects
Unfortunate events like falling roof tiles, pots and tree branches can ruin a nicely parked automobile. Then, your car insurer picks up the tab if you have this provision within your policy.

  5. Most Natural Disasters
Wide varieties of natural disasters like tornadoes, hurricanes and earthquakes are included within comprehensive coverage. One thing you need to keep in mind is that certain disasters may be excluded when the chance of such an event occurring is high but you may be able to include such peril as well by paying extra premium. For example, some auto insurance companies may exclude hurricanes in certain parts of Louisiana because the risks are too high and losses are likely to be large.

  6. Glass
Most windscreen fixes and replacement are part of it as well. Windscreen replacement is one of the most common claims and often there are companies that come to you, fix it and send the bill to your insurer directly.

  7. Civil Disturbance
Social unrest or a riot can cause serious damages at times. At least you will be at rest knowing any damage to your vehicle will be compensated for.

  8. Hitting an Animal
Hitting an animal is there too. However, you need to make contact with the animal for it to be a comprehensive claim. If you swerve in an attempt to avoid hitting the animal and crash into another object you will need collision in order to be able to claim. But they are hardly ever sold separately anyway.

Who Needs It?

Any motorist with a decent car usually needs and wants a full policy that includes Comprehensive and Collision coverage on top of the Liability required by the state and that points to most vehicle owners. This package nature of most policies sold in the US allows automobile insurers to come up with really good policies at reasonably cheap premiums. That is why it is a no brainer for most motorists considering the level of overall protection and peace of mind they get.

Let’s have a look at statistical evidence concerning some of the perils discussed above. According to the IIHS, there are around 1.5 million deer-vehicle impacts every year and this results in over 150 deaths and over $1 billion dollars financial loss. According to State Farm, one out of 164 policyholders made a claim resulting from hitting a deer, elk or moose in 2016. And the average cost is around $4,000. These are the eye-opening facts for only one of the perils.

Let’s carry on a little bit more with the statistics. According to FBI reports, there were 707,758 thefts of motor vehicles nationwide that cost nearly $5 billion in 2015. According to the Insurance Information Institute, a car is stolen somewhere in the US every 45 seconds and only 50% of stolen cars are found and returned to their owners.

You will certainly sleep better at night knowing that your vehicle is well protected against many perils. And you will understand its real value if you ever have to make a claim.

There are a number of factors that affect rates and that is the same for everyone. Naturally, someone with a good driving record and credit history has a better chance of getting lower rates. Also, shopping around for the best prices can save you large sums of money.

In other words, the gap between minimum Liability car insurance and full coverage policy that includes Comprehensive as well will be very narrow and that would make it easier to pay a little bit more. On the contrary, the gap will widen for youngsters and drivers with bad records and they may have a decision to make due to prohibitive costs.