5 Reasons to Get Comprehensive Auto Insurance Coverage

Comprehensive coverage is an important part of any auto insurance policy, but many drivers choose not to purchase it in order to save money. However, there are many dangers out there, and without comprehensive coverage, you will be paying for your losses all on your own.

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While comprehensive coverage raises the cost of your insurance policy, it is a valuable coverage to have if you ever need it. Most people do not have the extra money to pay for costly repairs or to replace a vehicle outright.

What Comprehensive Pays for

Comprehensive coverage is an optional part of a car insurance policy. There are no states that require that you buy comprehensive coverage. However, most lenders do require that you buy comprehensive and collision coverage to protect the value of the vehicle.

Comprehensive pays for damages from events not related to an accident or collision with another vehicle or stationary object. Damages from nature are covered, such as damages from hail, falling trees and debris, and flooding. Comprehensive also covers damages from hitting a deer or other animal. Vandalism, explosions, and damages from a riot are even covered by comprehensive as well.

A big danger that comprehensive also covers is auto theft.

According to data for 2010 cited by the Insurance Information Institute, vehicle theft occurred at a rate of one car stolen every 43 seconds in that year.

The majority of car thefts go unsolved; comprehensive is the only coverage that will pay for your losses outside of paying for them yourself.

Comprehensive coverage does include a deductible, which is an amount that you are responsible for paying. Deductible amounts range from $250 to $500, and into the thousand dollar range. If you have a $500 deductible, and a falling branch causes $2,000 in damage, then your insurance coverage company will only pay $1,500 towards repairs.

If your costs for repairs equal more than your vehicle is worth, then your insurance company will likely deem your vehicle to be a total loss. In such an event, the car insurance company will pay you the fair market value of your vehicle, minus your deductible. For this reason, optional coverage such as comprehensive and collision are only worth it if your vehicle is worth more than $1,000, according to the National Association of Insurance Commissioners.

Reason #1: You Owe on a Loan

Most lenders require that you carry comprehensive coverage to protect the value of the vehicle. You will be required to show proof of coverage before your lender signs off on the loan. Some car insurance providers will alert your insurance provider if you drop the coverage after purchasing the vehicle. Then, your lender has the right to demand that you reinstate the coverage or they will repossess the vehicle.

Until you pay off your car loan, your vehicle is actually owned by the bank or financial institution that gave you the loan. They want to be assured that the vehicle they own is in good working condition if you ever stop paying on the loan. Once they repossess the vehicle, then they can resell it to recoup their losses.

Reason #2: You Need Your Vehicle

Car insurance is meant to make you whole in the event of an accident or loss. Most of us cannot get to work, to the grocery store, or to other necessary destinations without our vehicles. Comprehensive coverage makes sure that you are ready and prepared for a host of unplanned and unforeseen events.

You can drive safer to help avoid an accident, but there are few things that you can do to combat those occurances covered by comprehensive; you can’t avoid hail damage if you don’t own a garage.

Comprehensive coverage will ensure that your vehicle is repaired quickly and safely, so that you can get back to your normal life.

Even minor damage can affect the safety and drivability of your vehicle. Many people live with minor damages, such as a cracked windshield, because they don’t have the coverage to pay for it. However, even seemingly small damages such as a cracked window make your car less safe, increasing your risk every time you drive.

With comprehensive insurance coverage, you will always be assured that your vehicle will be repaired to tip-top shape. Minor defects also affect the overall value of your car, so comprehensive coverage protects the value of your vehicle as well.

Reason #3: You Can’t Afford Repairs or a Replacement

Another reason to get comprehensive car insurance coverage is the high cost for repairs or replacement. Costs can quickly rise into the thousands of dollars for even minor repairs. Most people don’t have thousands of dollars on hand that can be used to repair a vehicle. Without comprehensive coverage, you will be paying for damages yourself.

Furthermore, if your vehicle is completely destroyed or inoperable, such as from a tornado or flood, then comprehensive is the only coverage that will pay to replace your vehicle. Lenders won’t forgive a loan just because the car is no longer operable; you will still be responsible for the remainder of your loan if your vehicle is totaled from an event not connected to an accident.

Getting a loan for a new vehicle once your old one has been totaled will not be an easy task. With comprehensive coverage, you will hopefully have enough money to pay off the remaining balance of your old loan, get a new loan, and have some left over for a down payment for a new car.

Without comprehensive coverage and only relying on the cheapest coverage, you will be left with no other options to cover the cost of your wrecked vehicle. Such an event will put your assets, job, and financial well-being in great jeopardy as you attempt to find a replacement vehicle while still paying on your old loan.

Reason #4: You Live in a High-Risk Weather Zone

Comprehensive is a must if you live in an area that sustains regular damage from severe weather or other natural disasters. Areas that are prone to hurricanes, tornadoes, mudslides, earthquakes, floods, and wild fires are all locations that make comprehensive coverage a necessity.

Few parts of the country are without some sort of damaging weather or natural disaster, so there is really no region or state where you can safely reject comprehensive coverage.

For instance, even if you live in an area that doesn’t typically experience tornadoes, that doesn’t mean that a tornado can’t occur. Furthermore, even typical thunder storms can produce high winds, hail, and flooding that can cause a lot of damage to your vehicle.

Basically, every area of the country contains dangers that can result in high auto repair or replacement costs for you. A garage to house your vehicle is a good option, and it will reduce the cost of your comprehensive coverage, but it can’t protect against everything. The smart thing to do is to have comprehensive coverage to make sure that you are covered for as many outcomes as possible.

Reason #5: You Live in a High-Theft Area

Another big factor that increases the need for comprehensive car insurance coverage is the rate of vehicle thefts. Some areas of the country typically do have higher rates of theft, though no area is completely free of the danger of car theft.

Generally, urban areas have the highest theft rates, as there are more cars to choose from, more people to steal the vehicles, and more places to get rid of the vehicles’ parts. The National Insurance Crime Bureau publishes vehicle theft hotspots every year.

For 2011–the latest data available–Fresno, California had the highest rate of auto thefts anywhere in the country; Fresno also occupied the same ranking in 2010. Modesto, California and Bakersfield-Delano, California held the second and third spots, respectively.

Even if a thief is caught, that doesn’t mean that your vehicle will be recovered or that the thief will be able to pay restitution in a timely manner. Comprehensive coverage is your only hope for replacing a stolen vehicle as quickly as possible.

The FBI reported that in 2009 the average cost of a stolen vehicle was $6,505.

A car theft is a stressful occurrence, and it is only made worse if you don’t have comprehensive coverage. Unless you have the cash on hand to replace a stolen vehicle outright, or a second car that you can rely on, you need to have comprehensive coverage. This is true of city areas, as well as country areas, as you won’t be any better off paying the loan for a stolen vehicle in the country than in the city. Anti-theft device discounts can help you to safeguard your vehicle and save money.

Comprehensive coverage is all about protecting you and your financial well-being. The coverage is worth its higher cost if you ever need to use it. While you can’t control the weather, Mother Nature, or thieves, you can plan ahead and protect your interests by purchasing comprehensive car coverage.

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