If you’re shopping around for car insurance, you need to know the lingo associated with the business. One important concept you need to understand is comprehensive car insurance. Comprehensive car insurance is a certain type of coverage that is usually purchased along with collision insurance, but it can be purchased alone as well. If you have comprehensive car insurance, your car will be protected in the event that is becomes damaged outside of a car accident. If your car is stolen or vandalized, then comprehensive insurance will cover it. Comprehensive insurance usually also covers damage resulting from natural disasters like floods, hail, wind damage and fire.
How Comprensive Coverage Works
Comprehensive insurance works like this: for example, if you wake up one morning and find that your car has been stolen, you file a claim. The insurance company will then determine how much it will cost to replace the car. They will then look at your deductible (the amount of money you are required to pay before the insurance coverage kicks in), subtract that amount and present you with the rest of the money due. For example, if the insurance company determines that your car was worth $15,000 but your deductible is $750, they will give you $14,250.
When purchasing comprehensive auto insurance, it is important for you to carefully read your policy and see exactly what you are covered for – look out for those exclusions. Generally speaking though, comprehensive coverage will take care of your damaged car as long as the damage was not incurred through an accident. To cover damage from accidents, you need to buy collision insurance. Collision insurance will pay for any injuries or damages that you, the insurer, incur as a result of an accident. Collision and comprehensive insurance are not the same as liability insurance, a third type of insurance. This type of insurance does not cover you – it covers other people that were injured and damage that was incurred as the result of an accident.
When to Buy Comprehensive Insurance
In many places, comprehensive car insurance is not required by law (usually only liability insurance is required). However, if you borrowed money to purchase your car, the bank involved may require you to carry comprehensive coverage until the car is paid off, so just in case something happens to the car, the bank will be able to recoup some of the loss. For older cars, it may not be worth the money to get comprehensive auto insurance – you may end up paying more for the insurance than the car itself is worth. Although in the end you may determine that comprehensive car insurance is not for you, don’t blow it off by thinking that it’s just a way for insurance companies to drain even more money out of you. Damages that are not caused by accidents can be just as pricey, if not more. If a large tree falls on your car or it goes up in flames thanks to the fire ravaging through the neighborhood, you want to bet you’ll wish you had comprehensive coverage.
About the Author: Trevor Stuart is one of the writers from the Canadian auto insurance website Completeinsurance.ca. For more information about all forms of vehicle insurance please check out his website.
How Comprensive Coverage Works
Comprehensive insurance works like this: for example, if you wake up one morning and find that your car has been stolen, you file a claim. The insurance company will then determine how much it will cost to replace the car. They will then look at your deductible (the amount of money you are required to pay before the insurance coverage kicks in), subtract that amount and present you with the rest of the money due. For example, if the insurance company determines that your car was worth $15,000 but your deductible is $750, they will give you $14,250.
When purchasing comprehensive auto insurance, it is important for you to carefully read your policy and see exactly what you are covered for – look out for those exclusions. Generally speaking though, comprehensive coverage will take care of your damaged car as long as the damage was not incurred through an accident. To cover damage from accidents, you need to buy collision insurance. Collision insurance will pay for any injuries or damages that you, the insurer, incur as a result of an accident. Collision and comprehensive insurance are not the same as liability insurance, a third type of insurance. This type of insurance does not cover you – it covers other people that were injured and damage that was incurred as the result of an accident.
When to Buy Comprehensive Insurance
In many places, comprehensive car insurance is not required by law (usually only liability insurance is required). However, if you borrowed money to purchase your car, the bank involved may require you to carry comprehensive coverage until the car is paid off, so just in case something happens to the car, the bank will be able to recoup some of the loss. For older cars, it may not be worth the money to get comprehensive auto insurance – you may end up paying more for the insurance than the car itself is worth. Although in the end you may determine that comprehensive car insurance is not for you, don’t blow it off by thinking that it’s just a way for insurance companies to drain even more money out of you. Damages that are not caused by accidents can be just as pricey, if not more. If a large tree falls on your car or it goes up in flames thanks to the fire ravaging through the neighborhood, you want to bet you’ll wish you had comprehensive coverage.
About the Author: Trevor Stuart is one of the writers from the Canadian auto insurance website Completeinsurance.ca. For more information about all forms of vehicle insurance please check out his website.
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