All about Comprehensive Auto Insurance

Comprehensive auto insurance is one of three types of coverage that can be found in a car insurance policy. An accurate comprehensive insurance definition is coverage that protects your car from dangers that are unrelated to collisions. So, if you have comprehensive or non-collision auto coverage and a hailstorm pounds the area and leaves small craters all over your car, comprehensive protection will pay for that repair. Similarly, comprehensive car insurance will pay for other claims for damage unrelated to collisions, such as vandalism and theft. The cost of this coverage in your insurance policy is affected by a deductible. A deductible is the amount of money a policyholder agrees to pay out of pocket before the insurance company handles the claim. A higher deductible results in a lower policy premium.

Misconceptions about Comprehensive Coverage

The name "comprehensive" creates a good deal of confusion about this coverage. Comprehensive car coverage is not blanket protection that handles any and all damage to your vehicle. Instead, comprehensive insurance coverage only handles claims not related to a collision, such as theft or flooding, for example. Another misconception is that comprehensive insurance is required by law. In truth, this coverage is chosen by the car owner and is optional.

Benefites of Comprehensive Protection

Comprehensive vehicle insurance provides valuable protection when your car is new. Imagine how you would feel if you walked out of the theater and could not find your car. Without comprehensive protection, you would have to pay out of pocket for a new vehicle. But comprehensive protection has its disadvantages, as well. As your vehicle gets older, it loses value. At some point, many auto insurance experts recommend that drivers consider dropping comprehensive car insurance.

Do You Need Comprehensive Coverage?

Let's say that you bought that new car for $18,000 and it's now worth $6,000. If your car was damaged in a thunderstorm, for example, would you definitely make repairs? Remember that even though your car depreciates quickly over time, the cost of this coverage generally does not go down nearly as quickly. Instead of paying for comprehensive auto coverage you might not use any more, you can save a significant amount on the cost of your policy by dropping comprehensive protection. Many experts recommend that drivers consider dropping comprehensive protection once the cost of the coverage reaches 10 percent of the value of the vehicle. So, if your car is now valued at $6,000, look up your insurance policy to determine the cost of this coverage. Don't forget to include the deductible, which is commonly $250 or $500. Another reason to consider dropping this coverage is to save money due to a financial crisis. Canceling comprehensive protection can save as much as one-third of your policy premium, but think long and hard before making that decision with a newer vehicle. What would you do if a huge tree branch fell and crushed your car the day after you got rid of the protection?