Many insurance companies encourage the purchase of comprehensive coverage on all automobiles. This policy may work in some situation. It may be a waste of money in others. The key to using comprehensive coverage starts with understanding what it is and how it works.
Basics of Comprehensive Insurance Coverage
Most states require that all vehicles carry liability insurance. This policy is designed to protect other drivers in the event that you are involved in an accident. The Comprehensive coverage is all about protection YOU and your vehicle. It is add-on coverage to your basic auto insurance policy. The main purpose behind this protection it to offer compensation in the event of damage caused outside of an auto accident or collision situation.
Unexpected Need of Comprehensive Insurance Coverage
You purchase a new vehicle on Tuesday. Friday night a freak wind blows down a tree that just happens to land in the middle of your new car. The crushed car is totaled by insurance but covered by the extension of a comprehensive policy on the car.
You take the family on a camping trip into one of the country’s national parks. During the night a hungry bear finds your vehicle and breaks in to get the snacks your kids left in the back seat. The bad news is that the car is totaled by the insurance company. The good news is that the investment in comprehensive coverage means that you are fully compensated for your loss.
You park your car in front of the grocery store and run in for a few items. The wind blows several shopping carts free while you are inside. These carts race across the lot and into the side of your vehicle. The bad news is that the store is not held accountable for the destruction of these runaway carts. The good news is that your comprehensive policy covers the damage.
A major storm blows through your community dropping quarter sized hail on everything around. Your car comes away dented and damaged from the storm. The comprehensive policy that you invested in covers the damage caused by the storm.
When to Purchase Comprehensive Coverage
Investing in comprehensive auto insurance will add to the premium costs of your policy. You will want to balance the additional costs with the coverage they will afford. The older your car gets the more likely you will want to consider dropping the comprehensive addition.
There may be times when you have no choice in making the investment. Some lenders will require that you make comprehensive coverage part of your insurance policy to help secure their investment. You will always want to check with your lender before purchasing your auto insurance to be sure you meet their requirements.
Purchasing comprehensive insurance for a car you own outright will largely be determined on the balance of cost verses payoff. Review your insurance policy to see how much of your premium costs go towards the comprehensive coverage. Also talk to your agent to see how much the policy would pay in the event of a claim made to the comprehensive policy. Be sure to include any costs for deductibles. You may want to consider dropping comprehensive coverage when the amount that you save on premium costs quickly adds up to the amount you would be paid in the event of a claim.
Investing in auto insurance can be an important decision. Most states require that you carry liability insurance to protect other drivers. Comprehensive insurance is all about protecting you and your vehicle. Investing in comprehensive insurance can the best way to protect against any of the unexpected situations that your vehicle will face. The first step in making the right choice is to understand comprehensive insurance and how it works.
