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Comprehensive Auto Insurance: What Are The Real Benefits?

Updated: September 20, 2018

When considering an auto insurance policy, individuals must consider whether they need comprehensive insurance as part of the package.

Adding this form of insurance often makes the policy more expensive, but comprehensive insurance is valuable because of the protections it offers.

Comprehensive auto insurance is a great way for individuals to get protection for damage to their vehicle in certain situations.

However, comprehensive auto insurance is not mandatory in any American state, which means that some policyholders choose to leave it out in order to save money.

Whether someone “must” get comprehensive insurance in their policy is entirely dependent on their circumstances.

What Does Comprehensive Coverage Cover?

Comprehensive auto insurance provides individuals with coverage against damage to their vehicles that are not caused by road accidents.

If damage occurs while hitting an animal on the road, such as a deer, it falls under the umbrella of comprehensive auto insurance coverage.

For example, if someone decides to take a tire iron to the back of your vehicle and inflict significant damage, comprehensive auto insurance means that the insurance company will pay for the cost of damage.

Not only is this form of insurance useful against theft or vandalism, it is also very necessary to protect a vehicle against natural elements or disasters. If an earthquake, fire, thunderstorm or heavy wind situation causes damage to a vehicle, only comprehensive coverage will pay for the damages.

If damage occurs while hitting an animal on the road, such as a deer, it falls under the umbrella of comprehensive auto insurance coverage.

While other forms of auto insurance are designed to protect against damage caused by the policyholder’s actions, comprehensive auto insurance is ideal for “unstoppable” events that are out of your control. Even careful drivers need comprehensive coverage in their insurance policy, because they cannot stop certain situations from resulting in car damage.

Advantages of Comprehensive Coverage

All the benefits of comprehensive auto insurance stem from the type of coverages it offers. People who have fancy sports cars are at higher risk of having them stolen or vandalized, which makes comprehensive coverage a must.

One benefit of comprehensive auto insurance that is often ignored is the provision that pays for transportation while the insured vehicle is being fixed.

Damage from the elements is something that no one can avoid. While an individual can try and keep their car in a covered area at all times, it is not always possible. A surprise hail storm or heavy winds in a forested area can result in significant damage to a car. Getting comprehensive auto insurance means you are not straddled with expensive car repair bills.

One benefit of comprehensive auto insurance that is often ignored is the provision that pays for transportation while the insured vehicle is being fixed. This ensures your policy will provide money for rental cars, taxis or public transport while you are waiting for repairs to complete on your existing vehicle.

Finally, comprehensive auto insurance also covers the financial cost of any personal belongings that are stolen from inside the vehicle.

Disadvantages of Comprehensive Coverage

Ultimately, the biggest disadvantage of comprehensive auto insurance is the price. Policyholders who have a tight financial situation might want to remove this policy in order to save money. They will take a calculated risk that no natural disaster will damage their car, but in reality they simply cannot afford the policy.

A lot of companies include a number of “add-ons” that are built into their comprehensive auto insurance policies.

In general, comprehensive auto insurance can add between $100 or $200 to the average insurance rates of a policy on an annual basis. It is not an astronomical amount, but if someone is working a minimum wage job, a few hundred dollars a year can make for significant savings.

A lot of companies include a number of “add-ons” that are built into their comprehensive auto insurance policies. While a number of these add-ons are removable, customers find it frustrating because they are charged for certain provisions that they may not want.

For example, some policies include additional charges for roadside assistance or rental car insurance by default.

The fine print in comprehensive policies can also render certain events inadmissible for compensation, which is extremely frustrating for customers who pay good money for the policy.

Collision vs Comprehensive Insurance

Collision auto insurance refers to damage incurred while the vehicle is on the road, while comprehensive coverage pertains to stationary impacts.

There is often a misconception among insurance buyers that they need to choose between collision and comprehensive coverage.

Another facet of collision auto insurance is that it protects the driver from damage expenses from accidents that are their own fault. While no one wants to get into a car accident, sometimes mistakes are unavoidable. This is where collision auto insurance kicks in.

There is often a misconception among insurance buyers that they need to choose between collision and comprehensive coverage. Ultimately, the two policies cover completely unrelated events. If someone has the money to afford both policies, they should get both collision and comprehensive auto insurance.

The “versus” part of the equation often comes from the financial setbacks of getting both collision and comprehensive auto insurance. If a customer has an average auto insurance bill of $750 a year, they can expect to pay around $1200 to $1500 with both comprehensive and collision coverage.

If money is tight, it may become a financial necessity to choose one of the policies. In this case, many people go with comprehensive coverage and leave out collision auto insurance.

What Type of Insurance Do You Need?

When considering auto insurance, it is important that every individual look at their own circumstances before making a final decision.

If a person has a new car through a lease agreement, they may have no choice but to get comprehensive auto insurance.

With respect to comprehensive auto insurance, the value of a person’s vehicle plays a huge role in determining whether they get this type of coverage. Expensive cars, especially sports vehicles, absolutely demand comprehensive coverage, because of the potential loss in the event of theft or damage.

If a person has a new car through a lease agreement, they may have no choice but to get comprehensive auto insurance. Many lease agreements make comprehensive and collision coverage mandatory.

For vehicles that are ten or fifteen years old and under a few thousand dollars in value, it may be prudent to remove comprehensive auto insurance. In these cases, the cost of insurance premiums, along with the deductible in the event of damage, may cause a greater financial drain than simply replacing the vehicle with a newer model.

Individuals who cannot go one or two days without their primary vehicle may want to consider comprehensive coverage, because the insurance company will pay for a rental vehicle while your car is being fixed.