Comprehensive insurance is a comprehensive policy that helps to cover repairs or replacement of your car if it is stolen or damaged in some sort of accident that is not a vehicle collision. In addition to this, comprehensive, in some cases known as "all-occasion" insurance, typically covers damage due to fire, theft or falling objects (including a tree or hail) as well.
Depending on what state you live in, comprehensive insurance could also include personal injury protection or property damage liability insurance, depending on the specific policy. Comprehensive insurance can be very useful but can also be costly depending on the state you live in and the value of your car. Below we will discuss the different types of comprehensive insurance and some of their pros and cons.
If you want to see - What to Know Before Shopping for Comprehensive Car Insurance
Comprehensive coverage is great for covering multiple risks or losses that could occur with your car. For instance, if you were to be involved in a totaling crash and your car was stolen, comprehensive insurance helps pay for the cost of replacing your vehicle. The same thing goes if your car is damaged and stolen while you are driving it. Comprehensive coverage can also help pay for the medical expenses related to a stolen vehicle, which can make it very helpful.
There are Two Forms of Comprehensive İnsurance
Actual Cash Value and Replacement Cost. The difference between these two policies is that the actual cash value or replacement cost pays out based on the current market value of the vehicle at the time of the loss, while the actual cash value pays out based on the actual cash value of the vehicle at the time of the loss.
Many people prefer the actual cash value option because it is less costly to purchase a new car than to repair and replace a damaged car. However, it may not be as beneficial to purchase a new car when the cost of repairing the old car is greater than the actual cash value of the vehicle at the time of the loss. It all depends on your situation.
There are many situations where people would benefit from the use of comprehensive insurance coverage. For instance, if you own an older vehicle that has an outstanding loan or balance, you may want to consider purchasing the optional comprehensive coverage. If you have a lien holder on your property, you would also qualify for comprehensive coverage. Furthermore, if you own shares in a business that you operate from your home, you may want to consider comprehensive insurance to make sure that your business is safe in case of a fire or any other disaster. While these situations may make sense in some cases, there are also other situations in which comprehensive coverage makes sense.
One situation in which comprehensive insurance is important is when you need to repair or replace your car due to vandalism. Comprehensive coverage will pay for damage that occurs to your car because of vandalism, fire, or even flood. Comprehensive coverage also makes sense in the event that you or someone else is injured as a result of a natural disaster such as a tornado, hurricane, snowstorm, or flood.
The first type of comprehensive insurance coverage to briefly discuss is collision coverage. Collision coverage helps pay for repairs or replacement of your vehicles that are damaged or stolen. Typically, this will include either your car or someone else's car. Some comprehensive insurance policies cover only accidents or incidents, while others will cover incidents whether or not you cause the accident. This is important to keep in mind if you drive a car with expensive accessories or parts that may be difficult to repair if they are damaged or stolen. You may find that your expensive GPS system will be covered in a comprehensive policy and if not you could have to purchase it separately.
Generally speaking, the more comprehensive your policy the less you will likely need to pay out on your premiums. However, most comprehensive insurance coverage policies will require you to pay out on a deductible. In most cases, the deductible is very small and insurance companies offer you a substantial amount of coverage to offset the cost of your deductible should you be involved in one of their responsible accidents. Because these types of accidents are usually unavoidable, the deductible can really help you save money.
Another type of comprehensive insurance that you might want to consider is comprehensive collision insurance. This type of coverage will pay for repairs or replacement of your vehicles in the event you are at fault in an accident. The deductible you have to pay on this type of policy will be significantly less than your auto insurance premiums. Because you are not held responsible for damages incurred in a collision, you don't need to worry about being held responsible for paying for any repairs or replacements that you make yourself. Comprehensive coverage will pay for these repairs or replacements, but you'll need to pay a portion of the expense before the insurance company pays the rest.