Your car insurance policy has a few working parts that operate in conjunction with one another. This ensures your vehicle is covered if it’s damaged. The three different coverage types include liability insurance, collision insurance, and comprehensive car insurance, each covering damage caused under a variety of circumstances.
The bigger questions are: When do you need these different types of auto insurance coverage and how much do you need? While it might sound confusing at first, it’s relatively easy to understand when the terms are broken down.
The coverage you need depends primarily on the age of your car and how much you still owe on it. Plus, it’s important to take into account the car insurance deductibles that you must meet if your car is damaged, including a collision or comprehensive deductible, depending on the type of claim you file with your car insurance company.
Here’s everything you need to know about what comprehensive insurance coverage is, what it does, when you need it, and how much of a deductible you need to best protect you and your car.
What Is Comprehensive Deductible Coverage?
While you absolutely need to purchase liability coverage when driving a car in most states, collision and comprehensive coverage are optional. If you owe on your vehicle, it is almost always best to carry both collision and comprehensive coverage, and many dealerships and leasing offices require it.
And while collision coverage covers your vehicle if it is involved in a collision with another vehicle or object, a comprehensive claim is much more complicated. In essence, comprehensive coverage covers your vehicle from everything else that might damage your car, including:
- Damage from contact with animals
- Damage suffered during a natural disaster, such as earthquakes, floods, or tornadoes
- Damage from fire
- Damage from vandalism or riots
- Theft of your car or parts of your car
- Damage from falling objects, such as a tree branch or projectile
- A broken windshield
What Does Comprehensive Deductible Mean?
A part of any car insurance policy is the deductible, or how much you pay out of your own pocket if your vehicle is damaged. Once you have paid your deductible for the year, your insurance should kick in and pay for the rest. The higher your deductible, the less you pay in premiums each year.
When Do You Need Comprehensive Deductible Coverage?
It is important to carry comprehensive deductible coverage if you have a newer car, because the repair costs associated with repairing a newer vehicle can get quite expensive. For smaller incidents that cause less damage, you might be better off taking care of the costs without even reporting the damage to your insurer.
If the amount of damage is less than the deductible you carry, then taking care of it yourself can keep your premiums from going up, especially if you were at fault in an accident with another car. Keep in mind, the law requires you to report an accident if it results in injury or death or is over a certain amount. In any case, if either party decides to involve the insurance company, make sure to get all of the other party’s insurance information. This includes their name, address, and phone number. You should also get the name of their insurer, their driver’s license number, and vehicle license plate number.
Chances are that both you and the other party’s insurance company will contact you to get your side of what happened. Make sure to have important information ready, such as where the accident happened, the time, and the weather conditions. You should also relay any mitigating circumstances, such as what traffic was like at the time.
How Much Should My Comprehensive Deductible Be?
Comprehensive deductibles usually range from $250 to $1,000, though they can go higher. The state where you live also plays a part in the deductible amount. If you are a relatively safe driver, having a higher deductible can end up saving you on your car insurance premiums. Also, if you have an older car or don’t owe a lot on your car, you can safely lower your deductible, or even eliminate it all together.
A good rule of thumb is that if your premiums for both comprehensive and collision coverage for your car are 10 percent or more of the car’s book value, you are probably better off getting rid of the coverage altogether. Of course, if you are accident prone or don’t have a lot of cash on hand, then you might consider keeping the coverage, just in case.