Comprehensive is an important form of coverage on an auto insurance policy. It refers to factors, other than a collision, that cause damage or loss of a vehicle. Comprehensive coverage applies if a vehicle were to be stolen or for damage caused by nature such as a tornado, fire, flood, fallen tree, or an animal. Similar to collisioncoverage, comprehensive has a deductible amount, typically $500.
Unlike liability insurance, state laws do not require drivers to have comprehensive coverage. However, many banks and lending institutions require it as part of a loan to protect a vehicle. In this way, their loan amount is better protected in the event of a non-collision factor causing damage or loss. Driving without comprehensivecoverage is often fiscally irresponsible. Cars are valuable assets worth thousands if not tens of thousands of dollars. Without comprehensivecoverage, a driver could lose thousands of dollars of value in an instant.
Comprehensive coverage can get expensive. One way to lower your comprehensive coverage rate is to raise your deductible amount. Insurance companies offer lower comprehensive rates if you raise your deductible. This is because with a higher deductible amount, they pay less for comprehensive damage and less often as many claims for comprehensive damage involve amounts of less than $1,000. Most companies have a $500 minimum deductible for comprehensivecoverage. If a driver were to raise their deductible to $1,000, their comprehensive coverage rate would decrease.
Another way to save money on comprehensive coverage is that if a car is old or in poor condition, you may want to consider skipping comprehensive coverage altogether. Having comprehensive coverage may not be of benefit when factoring in the deductible amount. For example, if you have an older car worth only about $1,000, after factoring in a $500 deductible, it may not make a lot of sense to pay for comprehensive coverage.
