What Is Comprehensive Auto Insurance And Is It Important?

Picture this; you just purchased a new Buick or GMC; congratulations! Now, like all new car owners, you need to pay for car insurance to protect your investment. Unfortunately, most people don’t understand the complexities of auto insurance. Your car insurance policy has pages of information on coverages, deductibles, and limits that get difficult to understand. As a result, many car owners realize too late that they didn’t purchase the right coverage. To help you better prepare for the uncertainties of life, we asked our insurance experts to discuss auto insurance, particularly comprehensive coverage.

What Is Comprehensive Auto Insurance?

Many people confuse comprehensive coverage with collision coverage. However, these are very different. Collision coverage protects you if your vehicle is involved in an accident. The accident could be your fault or someone else’s, but you have financial security if your car is involved in an accident.

Comprehensive insurance coverage doesn’t protect against an accident. Instead, it covers you against any damage to your vehicle caused by almost any circumstance other than an accident, which is an important distinction. Consider comprehensive insurance as your tough-luck scenario coverage. For example, a storm blows your favorite magnolia tree down, damaging your new GMC Acadia. You can likely get reimbursed for the damages if you have comprehensive insurance in your insurance policy.

In this scenario, collision insurance won’t pay a dime. You weren’t involved in a collision, so the incident isn’t covered. Now, if you hit a tree while driving, that is covered under your collision policy. But your comprehensive insurance doesn’t apply. Here’s a list of what is and isn’t covered under your comprehensive policy in most cases:

• Theft.
• Fire.
• Natural disasters, such as mudslides, wildfires, hurricanes, tornadoes, vandalism, riots, and falling objects.
• Hitting an animal, such as a deer.
• Glass damage.

Your comprehensive policy typically pays you for all these incidents after your deductible, which we’ll investigate later. What your comprehensive insurance won’t cover includes:

• Collision damages resulting from an accident.
• Medical expenses resulting from an accident.
• Lost income as a result of medical conditions related to an accident.
• Damage to another person’s car or property stemming from a collision.
• Property stolen from within your vehicle.
• Legal fees.

Comprehensive Insurance Deductibles and Limits

When you purchase an auto insurance policy, you have many coverage options that usually have a deductible and a limit associated with them. Your deductible is the amount of money you decide to take responsibility for in a particular incident. Deductibles range from zero dollars to as high as $2,000 or more, depending on the policy.

If you choose a zero deductible policy, you pay nothing out of pocket if you file a claim. However, selecting a $1,000 deductible means you are responsible for the first $1,000 damage if you file a claim, and the insurance company will cover the rest. That is, up until your limit.

You also get to choose how much coverage you have or the limitation of liability. Limits can vary widely by insurance company. You can find limits as low as $5,000 or well north of $500,000. Limits are generally driven by how much your car is worth. For example, you wouldn’t select a $100,000 limit for a car worth $50,000. That would be over-insuring.

On the other hand, you could select a limit of $25,000 on that same $50,000 vehicle. However, in this case, you’d be underinsured. So, if you filed a comprehensive claim that the insurance company deemed a total loss, the insurance company would only pay you up to $25,000, leaving you responsible for the rest.

With any insurance policy, you must balance the risk versus the cost. Increasing your insurance coverage results in higher premiums. That includes limits and deductibles. The higher the limit, the more you’ll pay each month in premiums. However, a higher deductible may reduce this amount.

Most savvy shoppers get enough coverage to keep them whole in the event of a claim. Some people choose to keep their limits lower and deductibles higher to save money every month. If you don’t have to file a claim, you save money. However, if you do, you could be out thousands.

Drivers Who Should Consider Comprehensive Coverage

If you finance a new vehicle, your lender will likely require you to purchase a comprehensive insurance policy. It’s smart business for the lender to protect its investment. Unfortunately, you must pay for it if you want the car.

Lending requirements aside, people who live in an area prone to natural disasters should strongly consider comprehensive insurance coverage. For instance, Florida residents see hurricanes almost every year. And while their homes may still stand after a storm blows through, the damage can be costly. In addition, flooding often occurs after these large storms, which could severely damage your vehicle. Trees and tree limbs often fall from the high winds and damage vehicles.

In California, mudslides and wildfires happen every year. If you live in an area like that, you should consider comprehensive insurance. In cold climates, blizzards can have the same effect, bringing trees, limbs, and telephone poles down under the heavy weight of snow and damaging vehicles.

You shouldn’t only consider comprehensive insurance to combat natural disasters. Car owners should also consider crime rates in their communities. For example, if you live or work in an area with high theft or vandalism rates, comprehensive insurance can protect you against these crimes.

Residents living in rural communities typically don’t suffer from high crime or vandalism, but they could still benefit from comprehensive insurance. For example, striking a deer can cause significant damage to a car, but it isn’t covered under your collision insurance. Comprehensive insurance will compensate you for the deer and your lousy luck.

Explore Your Comprehensive Insurance Options on a New Buick or GMC in Youngstown

#1 Cochran Buick GMC Youngstown has been delivering high-quality vehicles to Ohio residents for years. If you plan on purchasing a new car, we want you to get the protection you need. Once you find a vehicle, our professional staff can recommend the coverage limits you should seek. For all of your vehicle and insurance questions, let your #1 Cochran team know!

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