The name suggests that almost all aspects are well thought of. But it is usually not that simple. Yet wide ranges of perils are built in. Comprehensive car insurance definition is that it is a type of protection included in full coverage policies to pay for most damages to the vehicle, except collision.
If you own your vehicle outright you can choose to buy it or not. Usually lenders and lessees want it to be insured extensively if you have a loan on it or you leased it. Most carriers wouldn’t sell comprehensive without liability and collision except for rare exclusions.
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. You are considered to have full coverage when you have all there components. Collision protects your car against crashes with another car or object. The rest of the damages that may come to it are included in the latter.
What Does Comprehensive Auto Insurance Pay for?
It can pay for the repairs or a similar replacement in case of a total loss due to below perils. Let’s have a look at them in detail.
1. Stolen Cars and Theft
Does automobile insurance cover theft? Yes, 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 it.
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.
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. It is there to pick up the tab too.
5. Most Natural Disasters
Does vehicle insurance pay for storm or flood damage? Yes, wide varieties of natural disasters like tornadoes, hurricanes and earthquakes are included within comprehensive coverage. One thing you need to keep in mind that certain disasters may be excluded when the chance of such event occurring is high but you may be able to include such peril as well by paying extra premium. For example, some companies may exclude hurricane in certain parts of Louisiana because the risks are too high and losses are likely to be large.
Most windscreen fixes and replacement are part of it as well. Windscreen replacement is one of the most common claims.
7. Civil Disturbance
Social unrest or a riot can cause serious damages at times. At least you will be at rest knowing they are only some of the protections offered.
8. Hitting an Animal
Does auto insurance cover hitting a deer? Yes, hitting an animal is there too. However, you need to make contact with the animal for it to be a comp. 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.
Do I Need Comprehensive Vehicle Insurance?
Anyone who owns a vehicle worth enough money to raise a financial concern should have it and that is majority of owners. Another reason is probably availability of cheap full coverage in the market. Considering how much protection offered, it would be too much risk not to have it.
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 impact 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 III, a car is stolen somewhere in the US every 45 seconds and only 50% of stolen cars are found and returned to their owners.
So, how will buying it help you? You will certainly sleep better at night. And you will understand its real value if you ever have to make a claim for theft, fire, storm, and flood.
There are numbers of factors that affect rates and that is the same for everyone. Naturally, someone with a better driving record and credit history has a better chance of getting lower rates than you. Also, shopping around for the best prices can save you large sums of money. Let’s leave them aside and look at how the quotes are calculated.
The level of protection affects the premium. The price mainly influenced by two factors and they are the actual cash value (ACV) of the automobile and deductibles. Actual cash value can be described as the price you would get for it if you were to sell it in the open market today. And you can probably reduce it by increasing deductibles. This would mean that you would have to spend more out of pocket if you ever have a claim. So, it is a trade off between lower premium and chance of spending more out of pocket.
How much is your premium currently and what do you get for it? Looking at all those provisions you might think that it may be expensive. However, full coverage vs liability car insurance cost can be reasonably low that it may convince you to upgrade the policy. The opposite may be true and you may not see the value of some because it isn’t worth it. So, it may be time to have a look at it and see if it can be improved.