Comprehensive Car Insurance

A Comprehensive Look at Comprehensive Car Insurance

It’s very easy to get confused or tripped up when you are looking to set up a new car insurance policy.  This is especially true if you are purchasing car insurance for the first time and the only thing you know about auto insurance is the species of the Geico mascot.

But that’s all right, as there is much to learn about car insurance.  And it could be argued that this is truest when it comes to discovering the basics of comprehensive insurance coverage.

Not What You Think

If you aren’t familiar with auto insurance, your initial inclination in hearing the words “comprehensive car insurance coverage” is that it’s one blanket policy that covers everything negative that could happen to a car, from replacing your wrecked vehicle to taking care of medical expenses.  However, this isn’t the case.  Essentially, comprehensive insurance covers your car from physical damages that do not result from a car collision.

This type of coverage extends to the following:

  • Theft
  • Fire
  • Floodwaters
  • Vandalism
  • Glass damage, such as a cracked or broken window
  • Damage sustained by falling objects or projectiles
  • Damage caused by hitting a bird or animal
  • Damaged resulting from severe weather, natural disaster, or other act of nature such as hail, hurricane, wind storm, or tornado

While the fact that comprehensive coverage is sometimes known as Other Than Collision coverage, or OTC coverage, it still has a tendency to cause confusion.  This could lead to some unfortunate ramifications if you aren’t careful or informed.  Keep in mind that comprehensive insurance won’t assist you in covering damages caused in a car crash – that’s what collision coverage does.  Therefore, it is important that you take the time to double check what exactly comprehensive insurance covers before purchasing that potential component of your policy.

Additionally, it is important to note that comprehensive coverage does not automatically come with your insurance policy.  Like collision insurance, comprehensive insurance must be purchased separately as it is not an component of insurance that is required by law (that designation solely belongs to liability insurance).

Two Forms of Common Ground

One thing that comprehensive insurance does have in common with collision insurance is the part that deductibles play in helping to set the cost of the policy.  The rules are the same in the sense that the lower you set your liability, the higher your premiums will cost.  The upside of setting a low deductible is that, in the event of  an OTC-related incident, you won’t have to worry about paying off a deductible before the insurance kicks in and helps cover the rest of the damage.  Conversely, if you set a high deductible, you should make absolutely sure that you could afford that deductible should you find yourself in an OTC situation.

The other form of commonality exists between collision and comprehensive is how the value of your car can play a part in determining if the insurance is a good fit.  If your car is on its last legs and an OTC may put it out of its misery, you may want to think twice about purchasing comprehensive insurance, as the amount you may get back for the car may not be all that great.

Do Your Homework

Even if you think comprehensive insurance may not be a good fit for you, do the homework to make sure.  Talk to an agent.  Surf the Internet.  Do what you need to do in order to ensure you have the coverage you need.  Doing so now will prevent unpleasant surprises later.

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