“Comprehensive” Automobile Insurance Coverage

Owning an automobile comes with a lot of perks and . . . “responsibilities”. One of the responsibilities is maintaining auto insurance coverage. Auto insurance can help protect
you (or your business) from what may become a significant debt in the event of a crash or an accident.

There are different types of auto insurance.

For example, liability insurance is often required to legally operate a vehicle in most states. This coverage helps cover financial liabilities incurred because of the driver’s fault.

If a vehicle is financed or leased, the lender may also require you to maintain collision coverage. This insurance helps pay for repairs or replacement of the vehicle if the vehicle is damaged in an accident with an object — like if you hit a tree. Another type of auto insurance coverage to consider is comprehensive insurance.

So, What Is Comprehensive Coverage?

Comprehensive insurance coverage is purchased to cover damages to a vehicle due to events entirely outside of the driver’s control. These events are often referred to as “acts of God or nature” where something happens to the driver and their vehicle.

While comprehensive coverage isn’t always required, it makes a big difference in protecting your investment in your vehicle and offers you a “peace of mind” about the many UN-predictable circumstances you may find yourself in. If you’re purchasing comprehensive coverage, here are some important aspects to consider:

What Coverage Does Comprehensive Insurance Typically Provide?

Comprehensive coverage can help the insured pay for damages to their vehicle that are not caused by a
vehicle collision. This includes damages caused by:
Collision vs. Comprehensive Insurance Coverage

It’s easy to confuse comprehensive and collision insurance coverages. In fact, it can be difficult to understand what risks are covered by each kind of insurance. So, let’s get into more detail.

Collision Insurance Coverage
If your vehicle is damaged in a crash or an accident, collision insurance may or may not cover the damages –– depending on the circumstances involved. Typically it does cover damage to a vehicle caused by colliding with another vehicle or object such as a tree, fence, mailbox or the like.

Collision Insurance Coverage repairs a vehicle regardless of the party at fault, but circumstances DO matter. You typically WILL have coverage under collision insurance coverage when:
• You, the driver, cause a crash with another driver
• A collision occurs with an object (like a fence, mailbox, telephone pole, etc.);
• Your vehicle rolls over; or
• Another driver is at fault, and they don’t have enough insurance to cover your damages

However, collision insurance will NOT cover damage to another driver’s vehicle, damage to your vehicle that isn’t due to driving (such as hail or theft), nor any costs or expenses you may incur for medical expenses.

Comprehensive Insurance Coverage
Comprehensive insurance, like Collision insurance, covers damages to your vehicle. However, unlike collision insurance, comprehensive insurance DOES typically cover damages resulting from non-collision accidents. Comprehensive coverage does NOT typically include:
• Damage to your vehicle from a collision with another driver’s vehicle;
• Damage to another person’s vehicle;
• Medical expenses incurred due to an accident or event

Remember is that, in general, the action and activity of the driver determines whether collision or comprehensive insurance covers the damages to your vehicle.

If you are in control and cause an accident, collision insurance may cover the damages to the vehicle. But when an event occurs outside of the your control (whether you are driving or not) –– like a tree falling on your vehicle or your stereo gets stolen –– then the damage is likely covered by your comprehensive insurance.

For example, if your vehicle sustains damage due to a hailstorm, comprehensive insurance would cover the damage since you can’t control the weather. However, if you swerve to avoid an icy spot on the road caused by the hail and hit a fence then the damage to your vehicle would likely be covered by the collision insurance.

Is Comprehensive Coverage (Always) Required?

Not always. But while normally not required by law, that doesn’t mean it’s always optional for every driver. For example, if you obtained a loan to buy your vehicle or are leasing a vehicle, lenders may require you to obtain and maintain comprehensive coverage on the vehicle. Why? Because it’s expensive to repair or replace a vehicle, and the newer the model, the pricier those expenses are, too. To protect their investment, lenders typically require you to have comprehensive coverage in addition to other possible insurance coverages.

Why Purchase Comprehensive Coverage?

How do you know if you really need comprehensive auto insurance? If you’re leasing or financing a vehicle, you will likely need comprehensive insurance.

When considering this kind of coverage, look at the “cost / benefit” ratio. Comprehensive coverage is worth buying if the value of replacing your vehicle is high, or if you can’t afford to pay potentially costly repairs.

Also, consider your policy’s deductible. This is the amount of money you pay out of pocket towards a covered claim. If the cost of repairs is LESS than your deductible, you’ll end up paying 100% of the repairs on your own. But, for significant costly repairs, having comprehensive coverage can make a big difference.

Let’s say you have comprehensive insurance and just paid quite a lot of money for a brand-new car. Then you it a deer. If the repair will cost about $1,000 and you have a deductible of $500, then both you and your insurance company will pay $500 each. If the damage is more substantial and the repair runs closer to $2,000, then the insurance company will pay most of the cost to repair the vehicle ($1,500).

The other caveat to comprehensive coverage is the limit on the value of the vehicle. Say, your vehicle is stolen, your comprehensive coverage will help pay to replace your vehicle, but likely not at the price you paid for the vehicle. The insurance company will reimburse you for the vehicle’s current and actual cash value. The depreciated value of your vehicle (and your deductible) will be subtracted from the original value of your vehicle.

Consider how old your vehicle is and what it’s currently worth before buying comprehensive coverage. Talk to your DSD Insurance agent to determine if comprehensive coverage is right for you.

Find the Right Policy with DSD Insurance
Driving without auto insurance can really hurt your bank account in those worst-case scenarios.

While comprehensive coverage may or may not be required depending on your situation, it’s worth considering. It can be especially frustrating when you hit an unlucky streak, or your vehicle sustains a damage that could not have been prevented. Insurance, in general, is designed to help safeguard your assets during unpredictable circumstances. Comprehensive coverage is a good way to help prepare for the unexpected.

If you’re interested in comprehensive coverage or are still unsure if you need it, you can contact us to explore your options. We’ll walk you through the policies available to you to make sure you find the best coverage for you based on your needs, budget, location, and more.

Interested? Contact Shon Messer or any of our team members today — (866) 621-1770!