What Is a Comprehensive Insurance?

Comprehensive insurance, also called comprehensive coverage, covers damage caused by incidents other than accidents or collisions. That is, in addition to repair your vehicle in case of traffic accident, even if you are at fault, it also covers other things like vandalism, natural disasters, theft, fire, falling objects, hail, flood, animal damage. This is the maximum and also the most expensive coverage.

When choosing a comprehensive insurance policy?

Comprehensive insurance is ideal for new and valuable vehicles. It is also essential for you if you want to be covered even in fault-based accidents. To help you in your choice, I will unveil the benefits of this very special protective coverage, and also the circumstances when it is not favorable to buy it.

Criteria to consider before buying a comprehensive coverage

Age and the cost of your car

The age and the cost of your car are the most important criteria to consider when buying this type of auto insurance. The majority of drivers who purchase this coverage have a brand new or expensive vehicle.

Your vehicle is new – If your car has more than 7 years, this policy may not be beneficial for you. That is, it would be better to consider a comprehensive coverage if your vehicle has less than 5 years.

Your vehicle is costly – You may also have a vehicle that is not new but has value; in this case you may opt for comprehensive coverage. For instance, you have a reputable brand with expensive accessories or a luxurious interior. A simple technique is to evaluate if replacement parts and complex repairs will be more expensive than the comprehensive insurance.

Financial situation

You also need to assess certain financial situations before you add a comprehensive coverage within your auto insurance policy.

You have an ongoing credit for your vehicle – If you took a car loan and you still have several years of repayment before you, it can be wise to choose this coverage. Let’s suppose an accident happens and you are responsible for destroying your vehicle completely. If you don’t have comprehensive insurance your insurer may not compensate you. For you, it is double jeopardy: not only you lose your vehicle but you must also pay a loan for an unusable car.

You have little or no money aside – Your savings are not enough to buy another car or make major repairs. If your car is worth more than what you can invest, consider comprehensive coverage.

You want quality compensation

Comprehensive insurance guarantees a good compensation and a wide coverage. Here are some benefits you will receive.

Your vehicle covered even in at-fault accidents – The comprehensive insurance repays the damage regardless of the circumstances. For example, a boar falls under your wheels or you collide with a tree. Most of the damage is covered. An advantage over regular insurance which covers only personal and property damage from no fault accidents. Comprehensive insurance compensate most damages: broken windows, fire, vandalism…

Your vehicle fully reimbursed – If your car is beyond repair or unfit to drive, you can be fully compensated. However, be careful to the duration of the warranty replacement value or purchase value. It varies according to insurance companies. The amount you are paid is often determined by an expert, after the accident or disaster. To improve your compensation, some insurers offer options + 15%, + 20% or + 40%. Consider asking questions about this benefit before buying the policy.

In some conditions, however, this coverage may not be advantageous. Let’s say for instance you took a car loan, you have about two months left to pay off the debt, and your car is old, Comprehensive insurance will perhaps cost you more than the actual value of the vehicle. Buying the policy will be financially disadvantageous.