Insurance Basics: Everything You Need to Know

3 Things To Know About Comprehensive Auto Insurance

You will hear many terms used to describe auto insurance policies today. Your agent may use words like liability, collision, and full-coverage to relay your options. Comprehensive insurance is another unique term that comes up when discussing auto insurance.

A comprehensive policy typically isn't required by law but can be a valuable addition for some drivers. Learn more about comprehensive policies so that you will be able to determine if you can benefit from the coverage this type of auto insurance offers.

1. What is Comprehensive Insurance?

To truly appreciate the value of a comprehensive insurance policy, you must be familiar with the type of coverage these policies offer. Comprehensive policies essentially cover any damage your vehicle may sustain that is unrelated to a collision.

Collision insurance steps in when you hit another vehicle or a stationary object. Comprehensive insurance is meant to help offset the cost of repairs for damage caused by weather, animals, or theft.

You will need to evaluate your car's risk of being affected by weather, animals, or theft to determine if comprehensive insurance coverage makes sense for you.

2. What Does Comprehensive Insurance Cover?

Comprehensive insurance policies protect drivers against having to pay for damage caused by events that are completely out of their control.

Some of the more common types of claims that are filed against comprehensive policies include bodywork to repair hail damage, the repair of damage caused by hitting a deer, and the restoration of a vehicle that has been recovered following a theft.

Comprehensive insurance does not offer coverage for medical expenses or collision damage. A liability policy will cover medical costs, and a collision policy should address damage sustained by your vehicle in an accident.

3. Is Comprehensive Coverage Worthwhile?

It's difficult to provide a one-size-fits-all answer when it comes to deciding whether comprehensive coverage is worthwhile. Many unique factors will need to be weighed when making this decision.

You should always consult with your insurance agent to find out what your monthly premium and deductible would be on a comprehensive policy.

All comprehensive policies limit their payment to the total value of the vehicle, so it may not make financial sense to secure comprehensive coverage on an older, less valuable car.

You will also want to check with your finance company if you purchased your vehicle via a loan since some lenders require comprehensive coverage until the loan has been repaid in full.

To learn more about auto insurance policies, contact an insurance agency in your area.