Add-On Insurance Part II: Why Is Comprehensive Insurance 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 about the worst case scenarios in which you may need coverage. Your Car Insurance policy should be based on the very real financial losses that may occur if you’re a victim of theft or other type of loss. In short, you have to protect yourself in case an unforeseen mishap occurs. To have peace of mind knowing that you’re covered in almost any unfortunate auto situation, consider Collision and Comprehensive Insurance. 

Take a look at your financial situation to start figuring out what Auto Insurance coverage is right for you. Can you afford to pay for damages and repairs out of your own pocket if something happens to your car? If you don’t want to spend your money on this, you should consider add-on coverages. Optional (but highly recommended) coverages you can add to your Car Insurance policy are Collision and Comprehensive Insurance. And it’s best to add them to your policy through an insurance agent rather than at the dealership. That way you can find the right coverage at the right price, and avoid overpaying.

What Does Comprehensive Insurance Cover?

Comprehensive Insurance covers your vehicle if it is damaged by something other than a collision. This includes damage caused by fire, theft, flood, falling objects, hitting an animal, vandalism or a natural disaster. It does not cover the rollover of a vehicle. In some states, people with Comprehensive Insurance are covered for glass replacement without having to pay a deductible first.

Comprehensive Insurance Deductible

comprehensive insuranceHowever, in most states there is a deductible amount that you must pay before Comprehensive Insurance will cover the remaining cost of a loss. Deductible amounts typically range from $250 to $1,000. 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 first. Then Comprehensive Insurance would pay for the remaining $6,000.

Why wouldn’t you ask for a $250 deductible then? Because, that would make your Car Insurance premium higher. Essentially, the lower your deductible is, the higher your rate will be. When choosing your deductible, you’ll have to look at your financial situation again. Maybe you can’t afford to pay a $1,000 deductible for an unexpected loss. A smart idea would be to lower your deductible and pay more on each payment for your Car Insurance instead.

Is Comprehensive Insurance Required?

comprehensive insuranceComprehensive Insurance is not required by law in any state. However, you should definitely consider adding it if you have a valuable or fairly valuable car and you can fit the extra cost in your budget. In fact, it may save you from a total financial disaster. Although it is not legally required by the state, your lender may require you to purchase Comprehensive Insurance if you’re financing or leasing a car. What happens if your vehicle is worth less than what you owe on it and the car is considered a total loss (or “totaled”)? You may end up owing more than your Car Insurance will cover. If this is your situation, you should also consider adding Gap Insurance to your policy. Gap Insurance covers the difference between the value of your vehicle and the amount you still owe to the lender.

Speak with an Insurance Specialist

Most people whose cars hold very little value usually opt out of buying this type of Comprehensive Insurance. However, adding Comprehensive Insurance to your Auto Insurance policy may be more affordable than you think. If you’re unsure as to whether or not you need this type of coverage, speak with an Insurance Specialist at (855) 919-4247. You may even find out that you qualify for a discount on Comprehensive Insurance if you have certain safety features on your car.


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 instructions or the advice of a qualified professional. The definitions, terms, and coverage in a given policy may be different than those suggested here. Such policy will be governed by the language contained therein. No warranty or appropriateness for a specific purpose is expressed or implied.

Posted in Cars and Auto Insurance, Financial-tips Tagged with: , , , ,