Is Comprehensive Insurance Full Coverage – Comprehensive car insurance is one of the few car policies that covers damage to your car. But how does it actually work? Find it in this guide
Comprehensive car insurance is one of a variety of policies that provide you with financial protection if your car breaks down. This form of insurance is not compulsory; whether it is suitable for you depends on your personal preferences and circumstances.
Is Comprehensive Insurance Full Coverage
So, how does comprehensive insurance work and when is it needed? How is it different from collision coverage? What about full coverage? Can you buy it as a standalone policy? Insurance Business answers these questions and more in this guide.
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A comprehensive auto insurance policy covers the cost of repairing or replacing a vehicle that is lost or damaged in a non-traffic-related accident. These include man-made events such as arson, theft and vandalism, as well as natural disasters such as hurricanes and typhoons.
There is no charge if your vehicle collides with another vehicle or object. That’s why it’s often called “non-collision” coverage.
Comprehensive insurance is not mandatory, although car dealers, banks and other lenders will require it when you finance or lease a car.
Car insurance companies often combine comprehensive car insurance with collision coverage, but some carriers offer the option of purchasing one or the other. However, the two cannot be purchased as separate policies. You’ll need to add them to your current auto insurance, which must have all coverages required by the state.
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Comprehensive insurance can cover not only your car, but other types of motor vehicles as well. This includes boats, motorcycles, RVs and yachts. Your policy will pay the actual cash value (ACV) of your vehicle. This is the market value of your car before the accident.
Like many types of policies, comprehensive car insurance has a deductible. An insurance deductible is the amount of coverage you must pay before your car insurance company will pay out. These usually come in $500 increments, so you can choose from $500, $1,000, $1,500, etc.
Let’s say you select a $1,000 deductible and your car is hit by a large tree branch, causing $2,500 in damage. You’ll cover the first $1,000, and your insurance company will cover the remaining $1,500.
A higher deductible means lower premiums because your insurance company takes on less risk. But you also need to make sure the amount you choose is one you can afford.
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Comprehensive auto insurance covers losses caused by unexpected, non-traffic-related events. This means any situation resulting from a non-motor vehicle collision. Such events include:
If you’re from Florida, you know how devastating weather-related events can be. Read this Florida car insurance guide to learn how car insurance can protect you.
While comprehensive auto insurance provides protection against a variety of accidents, it does not include coverage for collision insurance and other types of auto insurance. People excluded from comprehensive coverage include:
If you swerve to avoid hitting an animal and hit a fence, comprehensive insurance will not cover damage to your car. Instead, it is covered by your collision insurance policy.
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As the name suggests, collision auto insurance pays for damages if you collide with another vehicle or object. It also covers damage caused by potholes or rolling vehicles.
Comprehensive insurance, meanwhile, also provides coverage for injuries that are not traffic-related or caused by a vehicle collision. This is why it is sometimes called “non-collision” coverage.
Comprehensive and collision coverage are often mistaken for each other due to their similarities. Both are optional. Both cover the cost of repairing or replacing a vehicle after an accident. Both have a deductible that you must pay before coverage begins. Both pay the actual cash value of the vehicle. Both may be necessary if you’re financing and leasing a car.
Rather, it is a combination of state-mandated coverage (including liability, medical payments, and uninsured/underinsured motorist coverage) as well as comprehensive and collision coverage. These policies combine to provide you and your vehicle with comprehensive protection, hence the name.
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For more information on how this car insurance package works, check out our guide to full coverage car insurance.
Comprehensive auto insurance costs about $174 per year, according to the latest data collected by the National Association of Insurance Commissioners (NAIC). That’s less than half the cost of collision coverage (about $370).
These amounts are paid in addition to your state’s mandatory coverage. You cannot purchase comprehensive and collision coverage as separate policies. Typically, you will also need to purchase these policies together.
Just like any other type of insurance, there are steps to follow when making a claim under a comprehensive car insurance policy.
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Let’s say you end up driving during a severe ice storm. Although you managed to save yourself, the storm left serious dents and scratches on your car. It also severely shatters your windshield.
It is also helpful to always have the contact number of your insurance agent or broker. While a general phone number for your agent’s office is fine, having your agent’s exact phone number and extension can help streamline the insurance claims process.
After successfully completing the above steps, the claims adjuster will assess the damage and provide you with a preliminary estimate of the cost of repairs.
If you’re satisfied with the estimate, your car will be sent to the insurance company’s preferred repair shop. The garage will notify you when your vehicle is ready for collection.
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Your insurance company will pay based on your coverage limits, minus any deductible you must pay.
One disadvantage of filing a claim is that it may cause your renewal rate to increase. However, there are things you can do to lower your premiums. Find out what they are in this guide to cheap car insurance.
Car dealers, banks and other lenders offer comprehensive auto insurance, including collision coverage, as a condition of your auto loan. So whether you’re leasing or financing your car, there’s no way around it. You need to get insurance.
But if you already own a car, the question of whether you need comprehensive coverage depends on the value of your car and your financial situation.
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If you own a high-value vehicle and can’t afford to repair or replace it, comprehensive insurance may be a wise investment.
On the other hand, if you own an older car that has a lower actual cash value, it may not be worth getting insurance. Typically you’ll need to purchase comprehensive insurance that includes collision coverage. These policies can significantly increase your annual car premium.
Comprehensive car insurance coverage doesn’t always involve an accident that happens while you’re driving and over which you have little control. Another benefit of getting insurance is peace of mind. If one of these accidents occurs, you can get a financial cushion to help you get back on the road faster.
Comprehensive car insurance is just one of many car policies that can protect you and your car. If you’d like to learn more about other types of car insurance you can get, check out our extensive range of introductory car insurance.
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Do you think comprehensive car insurance is a wise investment? Have you ever made a claim against your comprehensive policy? how about this? Feel free to share your story below. The best way to ruin your day. . . Just destroy your car! But while collisions are scary (and expensive), there’s more than one way to destroy your car—heck, it can destroy it while you’re not even driving it!
Your collision coverage covers damage to your vehicle caused by other types of disasters, such as falling trees, wildfires, or wildlife. (Seriously, why did the deer run away?
We’ll discuss comprehensive insurance coverage, how it works, and whether you need it. (Spoiler alert: you probably will!)
But first, let’s review some important terms you need to know when learning about comprehensive insurance.
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To really understand comprehensive insurance and what it does, it helps to understand some of the terms that may come up when you’re shopping around. here we go!
Actual Cash Value: As the name suggests, this is the amount of money you can expect to receive if you sell your car in its current condition. of course
Collision Coverage: Think about car accidents. If you roll your vehicle, or damage it in an accident with another vehicle or vehicle, this coverage will pay for the cost of repairing or replacing your vehicle.
Deductible: This is the amount you must pay out of pocket when making a comprehensive insurance claim. The higher your deductible, the lower your premiums, and vice versa. (More on that below.)
Insurance 101: Comprehensive Coverage
Comprehensive coverage, plus liability coverage, and you have what’s called comprehensive auto insurance. Full risk insurance can be expensive! But if you get a good rate, it’s worth spending the extra dollar knowing you can have peace of mind knowing your car damage is covered for all types of accidents.
Caused by a collision with another vehicle or stationary object. Here are some of the most common examples of comprehensive coverage:
There are many types of car insurance,