Understanding A Comprehensive Auto Insurance Policy

Many people think comprehensive auto insurance covers everything. While the coverage certainly is comprehensive, as the name suggests, it doesn't fully protect you and your assets in every single instance. Indeed, the reason insurance companies offer a range of coverages is for customization according to your needs. Learn what comprehensive insurance covers, and design an insurance policy that best protects your assets.

Basics of Comprehensive Coverage

Comprehensive coverage is for damage caused to your car from incidents such as hail, vandalism, fire and flood. The policy pays out for glass, body, engine and interior damage. This is also the coverage that pays out when your car is stolen. In fact, comprehensive insurance coverage is often described by what it is not – meaning, it covers damage that results from anything except a car accident.

Comprehensive vs Collision

As Value Penguin points out, the main difference between comprehensive and collision coverage is the role of the driver. If damage to the car is the result of something within a driver's control, then this is covered by collision insurance. This is true whether your car or another car is deemed at-fault. However, collision coverage also pays out when your car hits a non-vehicle, such as a tree or a building. If, however, part of a tree or building falls on your car, that's covered by a comprehensive policy.

Choosing Comprehensive Coverage

Both comprehensive and collision coverage are optional additions to your insurance policy. As with any optional coverage, whether you carry it depends on your circumstances. If you have a car loan, your lender requires you to carry both comprehensive and collision.

If you live in an area prone to natural disasters or even extreme weather, comprehensive coverage can save your finances. For instance, flooding does a lot of damage to a car, but comprehensive coverage offsets the cost.

Another factor to consider is your locale and parking habits. If you live or work in an area where vandalism and theft are issues, comprehensive coverage is a good idea.

Finally, overall finances help determine your coverage. The general wisdom in insurance is to buy the most coverage you can afford. In the long run, it's usually cheaper in the event of an accident.

Comprehensive Coverage Payouts

Comprehensive policies change according to different insurance companies. For example, some companies insure your car according to its actual cash value, while others cover the cost of replacement. It's also possible to choose gap coverage, which pays for a new car or a vehicle upgrade. Comprehensive coverage always carries a deductible, with higher deductibles yielding lower premiums.

For more information, contact Oliveira Gilbert C Insurance Agency Inc or a similar company.