Life is random, there is no way that you can know what will happen next, but you can prepare for it. That’s what insurance is for, those unexpected moments. Imagine if you hit a deer and there was no other vehicle involved, but your car is damaged. What do you do? This is when comprehensive auto insurance comes in handy.
Breaking Down Auto Insurance
All states require motorists to have insurance. Each state has a basic minimum level of auto insurance motorists should have. In general, car insurance is a compilation of six different types of coverage.
- Bodily Injury Liability: This covers the policyholder and family members listed if they cause injury to someone else in a car accident. The people listed are also covered should they be driving another car with the owner’s permission.
- Medical Payments or Personal Injury Protection (PIP): This covers treatment of injuries for the driver and passengers of the policy holder’s car. Depending on the policy, it can cover medical payments, lost wages, and funeral costs.
- Property Damage Liability: This covers the damage caused to property by the policyholder or someone driving their car with permission. This could be someone else’s car, fence, building, or other structure hit in an accident.
- Collision: This covers the damage to the policyholder’s car if it is involved in a collision with another car, object or if it flips over.
- Comprehensive: This covers losses incurred due to theft or damage not caused by another car or object collision like a fire, falling objects, explosions, earthquakes, weather-related incidents, vandalism and riots, or contact with animals such as birds or deer.
- Uninsured and Underinsured Motorist Coverage: This covers the policyholder, family member, or designated driver if an uninsured driver hits them. This also includes if any of the above are victims of a hit and run. Underinsured motorist coverage pays for the at-fault driver’s shortfall should their insurance be insufficient.
What is Comprehensive Insurance?
Comprehensive coverage caters for events that are out of your control. These include:
- Theft,
- Vandalism, fire, riots, and explosions,
- Windshield and glass damage,
- Falling trees/limbs and other objects,
- Rocks/objects kicked up by or falling off cars,
- Storms, hail, wind, floods, lightning, and earthquakes, and
- Accidents with animals (hitting a deer).
Some people call comprehensive car insurance “bad luck” insurance, it’s there for you for events that you played no part in. Like when you have parked your car and someone sideswipe it, or you are caught in a flash flood and your car gets swept away.
How Does it Work?
Comprehensive insurance comes with a set deductible usually between $100–$300. Policyholders may opt to pay a higher deductible to reduce their insurance premiums. Here’s how it works:
- Let’s say you have comprehensive insurance with a $100 deductible,
- Imagine you have just hit that deer in the introductory paragraph, and it costs $500 to fix your car.
- You would pay $100 (the deductible), and the insurance company will pay the remaining $400.
If your car frequents hotspots known for vandalism, theft, devastating storms, floods, free-roaming animals, and so on, then it is advised that you get comprehensive cover. If your car does not frequent hotspots where it will be damaged in any of the above-covered scenarios, then you can choose to pay a high deductible to lower your insurance premium.
Do I Need It?
Comprehensive insurance is optional and typically has to be added to an insurance plan. However, there are times when it is necessary like:
- If you’re financing or leasing a car, lenders often require it.
- If you are driving an expensive car, because paying 100 percent out of pocket can be a drain on your finances.
Reasons to Consider Comprehensive Coverage
- Value of your car is a lot more than what you’d pay for insurance premium,
- You live in an area with frequent break-ins,
- You live in an area with turbulent weather, or
- You live in an area with free-roaming animals e.g., rural areas. It’s estimated that there are one to two million animal-vehicle collisions every year.
Get Cover for the Unexpected
Nobody knows what’s around the corner or what could happen to your car while it’s simply parked. Comprehensive cover will be there for you in life’s random moments. Even if it isn’t required by state law or your car financiers, you should consider the benefits of having comprehensive car insurance.
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