Auto insurance is made up of a number of insurance covers like Personal Indemnity, Property Damage, Bodily Injury, Uninsured or Under-insured Bodily Injury, Collision Coverage and Comprehensive Insurance. Comprehensive insurance insures you against hazards that the other auto insurance covers do not. Comprehensive insurance provides cover for hazards like fire, hail storm etc. Lets take a closer look at this coverage.
Comprehensive car insurance offers extra protection by insuring your car against theft, vandalism, break-in, hail, something falling on your car like limb of a tree, cracked or broken windshield, car hitting an animal etc. Basically this will cover those damages to your car which are not a result of overturning or collision with another object or vehicle.
Comprehensive auto insurance coverage varies by state and carrier. You should talk to your shortlisted insurance companies before buying. You may like to check the relevant pages on the websites of Progressive, StateFarm, and Liberty Mutual.
Is it Mandatory?
Comprehensive coverage is not required by law. It is an optional coverage. But it pays to have it. Hazards like hail storm can cause considerable damage to your car. Or what if your car is stolen or broken in? If you have this coverage the insurance company will pay you.
Leased or financed cars are usually required to have this. Also if your car is less than ten years old it pays to have a comprehensive coverage?
What Does it Pay?
In case of damage to the car comprehensive auto insurance pays the repair cost minus the deductible. For example lets say the car is damaged in a hail storm and the repair cost is $1500 and the deductible is $500. In this case the insured pays $500 to the body repair shop and the insurance company pays the remaining $1000. If your car is “totaled” you will be paid the actual cash value of your car. Actual cash value of a car is it’s true market value. It is the amount for which the car can be sold in a fair market.
Endorsements to Comprehensive Coverage
Some auto insurers allow you to add endorsements to a comprehensive coverage. Depending upon your state you may buy add-ons to comprehensive coverage like collision coverage, towing and labour, rental reimbursement etc.
Do You Need Comprehensive Auto Insurance?
Depends on how old is your car and whether it is leased or financed. If your car is leased or finance you may be required to have it. If your car is old and has an actual cash value of say $1000 then it does not make sense to spend an additional $50-$80 dollars every six months on comprehensive.
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2 thoughts on “What Does Comprehensive Auto Insurance Cover?”
Great resource! Cheers for posting.
If youre looking for the cheapest car insurance be aware of your deductibles.
Collision insurance is required by lenders before they will issue a loan on a car.
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