What Car Insurance Coverage Do I Need?

Decide how much liability coverage is enough for similar type of drivers.

Comprehensive Insurance

What does comprehensive coverage do?

If your car gets damaged as the result of an incident other than a collision of some sort, then comprehensive insurance is a coverage that is optional and will pay the cost, reducing your deductibles of repairing and replacing it. For example, you will be covered if your car sustains damage from floodwaters, storm or a fire or other weather damages or even vandalism or theft. It can also be glass damage (for example, broken windshield), damage from hitting an animal or a bird, it can be damage sustained from falling objects or missiles, etc. So in order to file for any of the above-mentioned claims, you must have comprehensive coverage insurance policy.

Comprehensive Car Insurance

In order to have full coverage for your car, you would require collision coverage as well as comprehensive coverage for your car so that you can be protected again physical damage as well. If you car hits another car, or is hit by another car, then collision coverage will have you protected. Many insurance companies will only offer you comprehensive coverage if you already have collision coverage as part of your car insurance policy. In order to get a quote for the comprehensive coverage amount, you would have to choose a "deductible" which is a portion of a claim that you have to pay yourself before the insurance benefits start to pay out.

Most of the times, comprehensive automobile insurance is quite affordable for all. The amount that it will cost you depends on various factors such as your driving record, the value of the car you have, the deductible amount that you have chosen and the repair costs. The average annual cost of comprehensive coverage is only around $134 according to the III (insurance information institute). This amount is literally nothing to pay, to actually get the ACV (actual cash value) of your car, minus the deductible (that you pay for). The ACV is basically how much your car is worth for in the market before it got damaged. Usually, the comprehensive claim does not increase your insurance rates, unless you are making a claim again and again in short period of time.

Is comprehensive coverage mandatory?

Comprehensive coverage is not mandatory and is not legally required for you to have by any state. Most of the states require the driver to have property damage liability, through which your insurance company will pay for (up to your limits, of course!) any damage that you may cause to other people's property or their vehicles. For example, if you run over somebody lamppost by mistake while reversing your car and their property gets damaged, you can make a claim from your insurance company to pay for it.

If your car is on the lease, however, then your lien holder may and they usually do, require that you have this comprehensive coverage policy with you and they may even tell you what deductible that you are required to keep. You have to check with your lienholder however if you plan to increase your deductible amount while your car is still under the lease agreement if they allow it to happen.

The amount that you can choose for your deductible varies from state to state and also varies according to the guidelines of insurance companies. Most of the times, the deductible is between $100 to $2,500. Majority of the people who choose a deductible usually have something in between $250-$1,000. A higher deductible that you pay, means that your insurance premiums would be cheaper for you as the insurance company will be then taking a lesser risk on you to pay out your claims, in case it happens.

When deciding to keep a deductible amount for your policy, keep in mind your finances and how much amount you can afford. Choose it wisely as it is great to save up money on the premium payments but would you have the ability to pay, say, $1,000 if there are damages that happen. Also, what if the car gets damaged for the amount that totals to $1700, then the cheap car insurance company would only be paying $700 while you would be paying more in claims of $1,000 from your own pocket. Deductibles have to be paid on every incident so every time there is a claim you would have to say that from your pocket. In some states, however, the deductible is waived in claims for windshields, etc.

What happens if I dont have comprehensive coverage?

If you do not have comprehensive coverage then you cannot make a claim which is anything besides collision. So this means that you will be personally responsible for any repairs or damages that you incur unless there is somebody else who is at fault for your damages, such as a car thief. It is always advisable to get this coverage especially for brand new cars as added protection and knowing the full value of your car is also important which you can find out from experts that are available to do this job.

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