Oh yes, the world of insurance. It can get very confusing very quickly when trying to figure out what kind of insurance you should get. This is especially true when it comes to what kind of car insurance you should get. So the question becomes, do I need comprehensive insurance? Let’s take a closer look.
What is comprehensive car insurance?
Comprehensive insurance is a type of insurance that covers your vehicle when it is damaged by incidents not caused by a collision. In simple English, your car is covered if it’s damaged without hitting another car.
This type of coverage is typically combined with collision insurance. They are ways around this though. For example, if you are leaving the country and your vehicle will be parked the entire time, you could in theory forego having liability insurance and only have comprehensive insurance. This entirely depends on your car insurance provider.
What does comprehensive insurance cover?
Situations, damages, and incidences typically covered are:
- If your car is vandalized
- if your car is stolen
- If your car is flooded
- If your car has a tree fall on it
- If your car hits a deer
Isn’t the entire list, so it’s important that you go over policy documents and get exactly what is covered. Every insurance company is different and every policy is also different. So make sure to thoroughly go over it.
Am I required to have comprehensive insurance?
Depending on your state, this type of insurance is not a requirement. Liability insurance however is definitely a requirement.
The type of insurance that is required by law is one that covers the cost of repairing a vehicle that you hit if you are at fault. If you also happen to, unfortunately, hurt someone in a car crash, insurance would also partly or fully cover the medical bills.
However, if you finance your vehicle (have a loan and payment on it) chances are that the lender will require you to have comprehensive insurance. This is because the lender wants to protect their asset in the case that something happens to it. Until you pay off the car, the bank technically still owns that car.
How much does comprehensive insurance cost?
This one is a bit tricky to answer. How much insurance costs depend upon a number of factors.
When considering having comprehensive insurance, it’s important to look at these various aspects:
- How much is the car worth?
- Is the car paid off or financed?
- How’s your driving record?
- Are you going to add extras like roadside assistance?
All of these different factors play a role in how an insurance provider determines your comprehensive insurance costs. It’s important then to always shop around when figuring out what insurance company to go with.
Personally, I would recommend using esurance, as they offer excellent rates. You should check them out.
When you should get comprehensive insurance
Although it might seem like a no-brainer to get this type of coverage, every individual’s situation is different. There are factors to consider when determining if this kind of insurance is a good fit for you.
For starters, if you have a financed vehicle, chances are you will be required to have comprehensive insurance. As mentioned above, lenders want to do all they can to protect the asset. This means that, in the event of your vehicle getting damaged, the comprehensive insurance will come into play and repair the vehicle.
Another thing to consider is your finances. If a tree fell on your vehicle tomorrow, and it cost you $$4,000 to repair, would you be able to afford it? It’s super important to take a close hard look at your financial situation, goals, and plans. Basically you should ask yourself, how much am I willing to pay to repair my vehicle in the event that something happens to it.
Third, figure out how much your car is worth. If your car is with $2,000, and you’re paying $650 a year for insurance, then it definitely might make sense not to get comprehensive. If you hit a deer with a $2,000 car, and it costs $1,500 to repair, then it’s probably better to just get a replacement car. Again, this only depends on your financial goals and situation.
Lastly, it’s also important to take into account your own driving history. If you have a history of accidents, speeding, and reckless driving, then it’s most probably beneficial for you to get comprehensive insurance.
Let’s take a quick second to recap what we talked about. Collision coverage only pays for damages that are caused by a car crash. Comprehensive insurance however covers damage caused but anything else, such as vandalism or theft.
Although this type of insurance isn’t required by states, it is still required if you have a leased vehicle or a financed vehicle. Make sure to give your lender a call to verify that.
So to answer the question, “Do I need comprehensive insurance” completely depends are you. It’s important to weigh the risks involved in not having it.
Really hope this helps! Good luck
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