Deciding on a new auto insurance policy can be challenging. There are lots of options to choose from and you’ll be faced with a number of industry terms that you may not be familiar with.
One term you’ll see frequently in your search for new car insurance is “comprehensive coverage”. It sounds good—but is it necessary? Let’s take a closer look at what comprehensive coverage entails, and whether or not it fits for your particular situation.
What is Comprehensive Coverage - and What Does it Cover?
Comprehensive coverage ensures that your vehicle is protected from all elements other than damage caused by a vehicle.
An insurance policy with comprehensive coverage covers certain damages; these include:
- Rodent damage
- Windstorms (most weather-related events)
- Falling or flying objects (i.e., tree branches and limbs)
- And collisions with animals (i.e., hitting deer or other large land animals).
So what’s not included in comprehensive coverage?
What isn’t covered by Comprehensive Coverage?
While comprehensive coverage will cover most of what Mother Nature will throw your way, it won’t cover the following vehicle incidents:
- Damage from a collision
- Medical expenses
- Legal fees
- Property stolen from your car
- And loss of income to the driver or passengers after an accident
Example one: If you are driving through a wooded area and hit a deer, comprehensive coverage will come into effect.
Example two: If you’re driving the same road, miss the deer, and hit a farm fence, you won’t be covered.
Another aspect to be aware of is that comprehensive coverage doesn’t cover general wear and tear issues. These include:
- Windshield wipers
- Belts and hoses
Often, there’s confusion between comprehensive and collision coverage. So, now that we understand comprehensive coverage—let’s define what collision coverage is.
What is Collision Coverage?
If Mother Nature, vandals, or any other unforeseen event isn’t involved, you’re most likely going to be in the middle of an incident with another driver.
This is where collision coverage comes into play.
It also helps when you’ve collided with a mailbox, guard rail, or telephone pole.
As a general rule, Collision Coverage will cover you when hitting other cars or inanimate objects and is generally an event that you could have avoided.
The waters can start to get murky in certain situations such as:
- Break-ins: if a window is smashed, fixtures are removed, and are expensive, comprehensive coverage will cover it.
- Stolen: in the event that your car is stolen and never recovered, comprehensive coverage will cover the cash value of your vehicle minus the deductibles. If your vehicle is stolen, make sure to report it to the police as soon as possible for insurance purposes.
- Personal items removed from vehicle: depending on the auto insurance provider you’ve taken your policy out with, your loss might be included in the collision or comprehensive coverage packages; it’s essential to read the fine print.
Now that we’ve defined what comprehensive and collision coverage are, let's talk about deductibles and costs.
Costs and Deductibles of Comprehensive Coverage
When it comes to taking out any insurance policy, there’s always the need to pay a fee to access the full payout from the company. This amount is known as a deductible.
The deductible amount is agreed upon before a contract is drawn up. Then comes the question of whether you prefer to pay a higher deductible in exchange for lower monthly premiums or a lower deductible in exchange for being liable for a larger portion of repairs.
Factors that will automatically increase your premiums for comprehensive coverage include:
- Driving record
- Vehicle make, model, year, and mileage
- And State
If you’re a young male with a fast, flashy, new car—expect to pay more. However, if you’re an older woman with an old vehicle and no accidents on your previous policy, then your premiums will be lower.
According to an article published on Car And Driver, drivers tend to have average deductibles of $500, and amounts can vary between $250 and $2000.
Your location will also have a significant factor in the cost, meaning if you’re in a state prone to natural disasters, this will increase your premiums. Densely populated areas with high amounts of traffic and accident rates can also impact your monthly premiums.
Then the big question is, what is the average cost of car insurance in the U.S?
According to data pulled from Quadrant Information Services, in 2021, the average car insurance cost in the USA was $1,674 per year, or about $139.50 a month.
So, how do you determine if you need to have comprehensive coverage?
Do I need Comprehensive Coverage?
As we discussed, there are several factors to consider when taking out comprehensive coverage.
If you have an older, pre-owned car, a good measure to use is to multiply your monthly insurance premium by 10. If your vehicle is worth less than this amount, it might be in your best interest to drop comprehensive coverage.
However, if you have a new car that you are paying off, you will have little to no choice but to take out comprehensive coverage. Of course, if you’re able to pay for the car in full with cash, you can opt out of comprehensive coverage. However, if you live in an area that is prone to disasters, riots, or vandalism—it might still be in your best interest to go with a comprehensive plan.
A Final Word on Comprehensive Coverage
As you can tell, there are many factors that determine whether or not you need to have comprehensive coverage. This decision is just one of many factors that are at play when determining the overall cost of your auto insurance policy.
But there’s no need to be overwhelmed. Luckily for you, Susy.com is here to help you make those comparative price checks. Click here to compare and select the best offer.