Add-on Insurance (Part II of III): Why Comprehensive Insurance Is Important

When it comes to buying car insurance, you can’t just look at saving as much money as you can. You need to think ahead and about the worst case scenario in which you may need coverage. While it’s usually a good thing to think positively, car insurance should be based on the very real financial losses that may be in store for you if you’re the victim of theft or another type of loss. In short, you have to protect yourself before an unforeseen mishap occurs. The way to do this is to look honestly at your financial situation. Will you be able to afford to pay for some damages and repairs if something happened to your car? Not having a big savings should make you consider add-on insurance products, like Collision and Comprehensive Insurance. While you never want to buy these at a dealership due to the price hike, adding these onto your insurance policy with the help of a trusted agent may just be the wisest insurance decision you’ll ever make.

What Does Comprehensive Insurance Cover?

This optional coverage covers you if your vehicle is damaged in an event not defined as a collision. You will be covered in the event of a fire, theft, flood, falling objects, hitting an animal, vandalism or a natural disaster. In some states, and with some programs, people with Comprehensive Insurance are covered for glass replacement, all without having to pay a deductible at all.

Most often, there is a deductible amount that you must pay before Comprehensive Insurance begins to cover the remaining cost of a loss. Deductible amounts most often range from $250 to $1,000. So, let’s say a hailstorm does $7,000 worth of damage to your car and you have a $1,000 deductible. You’d pay $1,000 out of pocket and insurance would pay for the remaining $6,000.

Why wouldn’t you ask for a $250 deductible then? Because, your premium will be higher. The lower the deductible, the more you pay in premiums. If you know you won’t be able to afford a $1,000 bill for an unexpected loss, it’s best to pay more each payment and set a lower deductible. Always discuss this in great detail when speaking with an Insurance Specialist about Comprehensive Insurance.

Is Comprehensive Insurance Required?

Comprehensive Insurance is not required by law in any state. You may, however, be required to purchase this type of coverage if you financing or leasing an auto. In the case that the vehicle is worth less than what you owe on it and the car is considered a total loss (or “totaled”), you may owe more than insurance will cover. This situation is often referred to as having “an upside down” loan. If you already know that this is your situation, you may want to consider buying Gap Insurance, which would cover the difference between the value of your vehicle and the amount you still owe to the lender. If you have a valuable or fairly valuable car and can fit the extra cost of having Comprehensive Insurance in your budget, it may be the smartest thing you ever did.

Most people whose cars hold very little value usually opt out of buying this type of insurance. If you’re unsure as to whether or not you should purchase this type of coverage, speak with an Insurance Specialist at AIS: 888.772.4247.

What Else Do I Need to Know About Comprehensive Coverage?

  • Comprehensive Insurance does not cover a rollover of a vehicle. Collision Insurance does.
  • Ask your insurance agent if you’re required to buy Collision Insurance in order to buy Comprehensive Insurance.
  • You may be qualified for rate discounts on Comprehensive Insurance if you have safety features on your car, especially anti-theft protection.

The information in this article was obtained from various sources. This content is offered for educational purposes only and does not represent contractual agreements, nor is it intended to replace manuals or instructions provided by the manufacturer or the advice of a qualified professional. The definitions, terms, and coverage in a given policy may be different than those suggested here and such policy will be governed by the language contained therein. No warranty or appropriateness for a specific purpose is expressed or implied.

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