Comprehensive Auto Insurance: Is It Worth It?
Comprehensive auto insurance covers damage to your vehicle that is not a result of an accident or collision. While it’s not required by law, it may be worthwhile to have in order to protect the value of your car for non-collision damages. Whether you should get comprehensive insurance depends on a variety of factors including where you live, your finances, the age of your vehicle and legal obligations. Here’s what you should know about the basics of comprehensive auto insurance to know when to drop or keep it.
What It Covers
In general, comprehensive insurance will cover repairs to your car for damages that are a result of vandalism, theft, fire, falling objects, hitting an animal and natural disasters including hail and flooding. Comprehensive will also cover glass damage such as windshield cracks. However, keep in mind that there are caps to how much your insurance policy will pay out for some repairs and your coverage is only equal to your car’s actual cash value.
What It Doesn’t Cover
Comprehensive may sound like it covers everything else that may not fall under an accident or collision but there may be limits and exclusions in your policy’s terms and conditions. For example, if your engine gets damaged from an animal that nested under your car’s hood, that may not get covered by some policies as you technically didn’t collide with the animal. Other policies won’t cover damages to your windshield or car windows that’s a result of certain events such as a war.
Comprehensive coverage may also exclude car devices that are not installed in your car, such as a detachable GPS or other portable electronics. These devices may be covered under your home or renter’s insurance instead.
How It Works
Your insurance carrier will pay for repairs after your deductible which can range anywhere from $0 to $1,000. Remember that the higher your deductible, your premiums will be lower but make sure you have enough to pay out of pocket for your deductible.
If your car is a total loss from a non-accident, insurance carriers will generally reimburse you for your car’s actual cash value minus your comprehensive deductible.
Is It Right For You?
Comprehensive auto insurance may not be a worthwhile expense as the value of your car depreciates. Consider the following if you’re deciding to drop or keep it:
1. It may be required: While comprehensive auto insurance is not required by state law, you may be required to have it by your leasing or lending institution if you’re leasing or financing your car.
2. Value of your car: If the amount of your comprehensive premium is higher than your car’s actual cash value and your deductible, it’s probably best to drop comprehensive coverage as you’re already paying close to what your insurance will pay out.
3. Where you live: If you live in an area where your car is likely to get damaged, you may want to pay for comprehensive. Consider comprehensive coverage if you live in an area that has high flooding, high crime rate or a large deer population.
4. How much you drive: If you don’t drive too often, you’re less likely to get into an accident. If you drive an older car in an environment with a lower risk to accidents, a low mileage is another reason to consider dropping comprehensive coverage.
5. Your finances: If you have enough savings to pay for a costly repair out of pocket or to replace a car, then your insurance premiums would be best spent elsewhere. However if you don’t have enough savings or have a low tolerance for risk, then you may want to keep coverage but raise your deductible to pay lower premiums.
One of the most common claims under comprehensive is to repair or replace your windshield if there’s a crack in it. If you want to repair your windshield if the crack is smaller than a dollar bill, Geico will waive your deductible with the appropriate comprehensive policy.
Through its “Mayhem” marketing campaign, State Farm cautions drivers about buying cheap insurance policies that may not cover for accidents caused by distracted driving or other mayhem played by actor Dean Winters. Whether it’s falling branches or a pothole, mayhem is everywhere and cut-rate insurers may not payout for all of these types of circumstances so make sure exactly what your comprehensive policy covers.
You shouldn’t be afraid that filing comprehensive claims will raise your rates. A former Progressive agent wrote that a point system is used to determine a driver’s rate and never saw a customer’s rates raise due to comp claims.
4. State Farm
State Farm makes comprehensive claims easy and efficient by offering a mobile service where a technician will come to your home or office building to repair your vehicle.