How Much Does Comprehensive Auto Insurance Cost
The cost of a comprehensive insurance policy will vary, based on the value of the vehicle, the zip code where it is registered, and the driver’s past insurance history. Car and Driver estimated the average cost of comprehensive policies to be about $160 per year in 2017, but this included group policies that are not available to individual drivers.
Full Coverage And Comprehensive Coverage Are Different Policies
Full coverage and comprehensive coverage are two different things:
Full Coverage:Full coverage auto insurance is a plan that includes liability insurance, collision coverage, and comprehensive coverage. Youre legally required to have liability insurance to drive. Collision coverage is optional and covers damage to your own vehicle if youre involved in a collision.
Comprehensive Coverage:Comprehensive coverage, unlike collision or liability coverage, covers non-accident-related damages to your vehicle. If your vehicle is stolen, vandalized, damaged by rodents, or damaged while parked in front of your home, for example, then you can make a claim under comprehensive coverage. Comprehensive coverage can also cover storm damage, windshield repairs, and more. Its comprehensive protection for your vehicle. Essentially, any damages to your vehicle that occur outside of an accident may be covered under comprehensive coverage.
All full coverage plans have comprehensive coverage. Its one of three policies typically included in a full coverage plan. Comprehensive coverage is typically bundled with liability insurance and collision coverage, but its still different from comprehensive coverage.
What Does Comprehensive Auto Insurance Cover
Comprehensive auto insurance covers any damage to a car except for damage from a collision. This includes natural hazards, such as deer strikes and falling limbs, as well as fire, weather, natural disasters, theft, and acts of vandalism. However, it does not cover damage caused by a collision with another vehicle, or injuries to a passenger or another person.
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What Does Collision Insurance Cover
Here are some situations where collision insurance would come into play:
- Hitting a tree or telephone pole
- Crashing into a building
- Rolling or flipping your car
- Hitting a pothole or curb
- Backing into another car
Like comprehensive insurance, collision coverage also has a deductible.
If another vehicle is responsible for your car’s damage, but you use your collision coverage to expedite repairs, youll still have to pay the deductible. However, your auto insurance company should subrogate . If it collects from the other party, your deductible may be refunded to you.
Do I Need Full Coverage Insurance On A Used Car
If you took out a loan or lease to buy a new car, your lender or leasing company will most likely require that you carry full coverage car insurance.
But even if you dont have a loan or lease on a car, every state except New Hampshire and Virginia requires you to carry the states minimum for liability insurance. Its a good idea to buy more than your states minimum. A rule of thumb is to buy enough liability insurance to cover what you could lose in a lawsuit.
If you want coverage for problems like car accidents , car theft, vandalism, floods, fire, falling objects and collisions with animals , then youll need collision and comprehensive insurance. If you dont buy these coverage types, youll be stuck paying out of pocket if your car is damaged by one of these problems.
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When To Get Comprehensive Insurance Coverage
Although you dont need to have comprehensive insurance in your auto insurance policy, there are several situations wherein it would come in handy. MoneyGeek provides a guide regarding which scenarios would most benefit from comprehensive insurance.
If you find yourself in any of these situations, you may want to consider adding comprehensive insurance to your policy.
Youre leasing or financing your car.
Comprehensive insurance is a must if youre still making payments on your car or driving a leased vehicle. Most lending facilities require you to carry full coverage car insurance, which includes collision and comprehensive coverage.
Your car is high-value.
The higher your cars value, the more you could benefit from comprehensive insurance. Whether you have a luxury car or a new vehicle, this coverage pays for repairs resulting from non-collision-related incidents. Liability-only means youll have to pay for repair costs yourself.
You cant save enough to replace your car.
Having comprehensive insurance means your policy will reimburse you for the cost of replacing your car if its totaled. If youre still not in the financial position to replace your vehicle out of pocket, including comprehensive insurance on your policy is a practical move.
Your location is prone to car theft.
Your location is prone to natural disasters.
Difference Between Comprehensive And Full Coverage Insurance
Car insurance is a must when youre financing a vehicle, because its required by the lender. Specifically, full coverage auto insurance is what you typically need to meet lender requirements. But what’s the difference between comprehensive and full coverage insurance?
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Collision And Comprehensive Coverage
Collision and comprehensive coverage are important for covering damage to your own car. Your liability insurance wont pay for any of your vehicle damage. If you own your vehicle outright then this coverage is optional. Expect to have to buy them if you have a car loan or lease.
Collison covers pay for damages to your car from crashes with any object, such as a pole or guardrail. Comprehensive coverage pays for car theft and repairs due to weather, animal damage, vandalism, fire, flood and falling objects
For example, lets say your car tires skid on ice and you crash into your neighbors fence. Collision coverage would pay for the repairs to your vehicle. Liability insurance would pay for the neighbors fence.
If you drove across a flooded street without realizing how deep it was, comprehensive coverage could pay for car flood damage.
Collision and comprehensive coverage both have a deductible, such as $500 or $1,000. Thats the amount of money deducted from an insurance check if you make a claim.
What Does Full Coverage Car Insurance Cover
Full coverage insurance provides coverage for most scenarios, including damage to your car from the weather, an at-fault accident, hitting an animal or vandalism. It will even pay out the current value of your car if your vehicle is stolen.
Full coverage auto insurance may include:
Uninsured motorist bodily injury liability
Medical costs after an accident with an uninsured driver.
Required on all policies in 20 states and Washington, D.C.
Uninsured motorist property damage coverage
Repair costs after an accident with an uninsured driver.
Required on all policies in 7 states and Washington, D.C.
Repair costs to your car if you crash with another vehicle or run into an object, such as a tree or a telephone pole.
A car loan or lease may require it.
Repair costs from events outside your control including weather, hitting an animal while driving, theft and vandalism.
A car loan or lease may require it.
But full coverage auto insurance doesnt cover everything. If you want extras like new-car replacement insurance, emergency roadside assistance or custom parts and equipment coverage, you may need to add them separately.
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What Is Medical Payments Coverage And What Does Medpay Cover
MedPay is a type of medical payment insurance sometimes included in a full coverage policy that generally helps cover medical expenses associated with a car accident, regardless of fault. It typically covers expenses not only for the policyholder, but also for any family members covered by the policy. Passengers traveling in the insured vehicle when the incident occurs are also usually covered by MedPay. In some cases, it may even be possible to extend a medical coverage policy to cover injuries incurred as a pedestrian or bicyclist.
Personal Injury Protection, or PIP, is similar to MedPay in that it can help cover medical expenses. Typically, PIP can cover lost wages and replacement services as well. In some states, PIP or no-fault coverage is required coverage.
How Much Does Comprehensive Insurance Cost
MoneyGeek compared policies to determine the amount you need to add to have comprehensive and collision insurance with a $1,000 deductible included in your policy. On average, youll pay $33 more per month or a little under $400 per year. Its a cost-effective way to get more protection, considering the coverage comprehensive insurance provides.
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You Can Add Optional Coverage To Your Full Coverage Auto Insurance Policy
You can enhance your full coverage auto insurance even further by adding optional policies to your plan. Full coverage auto insurance doesnt necessarily mean maximum auto insurance.
For example, a car insurance company might let you purchase a rider that reimburses you for the cost of any rental cars that you need to rent after your main vehicle is damaged in a collision. Some full coverage auto insurance policies provide rental car reimbursement, while others do not.
Uninsured/underinsured Motorist Bi And Pd Insurance
Uninsured BI and PD, functions exactly as BI and PD coverage, except it is only used in the event you get into an accident with a driver without car insurance, who was found to be “at-fault“. In most cases, you would just ordinarily file a claim through the other driver’s insurance. Since they do not possess any, you would need to file through your own Uninsured Motorist coverage instead. Underinsured Motorist BI and PD are used in the event the other driver does have insurance, but not enough to cover your expenses. First, you would file for reimbursement up to the other driver’s limits, then through your Underinsured Motorist to make up the rest of the damage costs.
In some states, you are required to carry some variation of these two coverages, while it is optional in others. The amount you carry usually mirrors the amount of BI and PD you carry. As well, some states may only require you have the BI version of Uninsured Motorist coverage, rather than both BI and PD. Lastly, the likelihood of getting into an accident with an uninsured driver is small, meaning you are less likely to file a claim. This makes UM and UIM insurance typically the cheapest component of “full coverage”.
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Full Coverage Doesnt Mean Full Value
Its also important to remember that full coverage auto insurance doesnt necessarily mean your insurance company will cover all expenses.
When you have a full coverage plan, you might assume that your insurance company will cover all medical costs, vehicle repairs, and other damages associated with an accident. Thats not necessarily the case.
Instead, full coverage plans may provide just basic liability coverage. You might have just $10,000 or $20,000 of medical liability coverage on your full coverage plan, for example. If damages exceed the limits of your policy, then you may be required to pay out of pocket. Youre not fully covered beyond your policy limits.
Make sure you understand the policy limits on your car insurance policy. Yes, you have a full coverage plan. No, that doesnt mean your insurance company will fully cover every expense related to your accident. Full coverage plans have limits too.
What If The Other Drivers Limits Arent High Enough To Pay My Bills
If the other drivers policy limits arent high enough to pay for all your car repairs, file a claim with your insurance company. Your collision or uninsured/underinsured motorist coverage should pay the difference. If you file a claim with your insurance company, youll have to pay a deductible.
If the other drivers limits arent enough to cover all your medical bills, file a claim with your auto insurance company or your health insurance company. Your auto insurance company will use either your PIP coverage, medical payments coverage, or your uninsured/underinsured motorist coverage to pay the difference. You might have to pay a deductible.
How To Get Full Coverage Auto Insurance
Most major insurance providers offer comprehensive and collision insurance. You may also find companies that have optional coverages. The following steps can help you get started.
Assess your needs
The first thing you need to do is to determine what type of coverage you need. Based on these, you can start your search for a full coverage policy.
Find insurance providers
You should look for insurance companies that offer the types of coverage you want to purchase. While most companies offer liability, comprehensive and collision insurance, optional coverages may vary.
Ask for a personalized quote based on your needs and circumstances. Most companies offer online quote tools accessible to the public.
Compare prices and policies
Get quotes from multiple insurers. It is ideal to request from at least three insurance providers. This way, you can compare the policy features and premium prices and choose the one that best fits your needs.
Dont Expect Full Coverage From A Full Coverage Plan
The term full coverage can be a bit misleading. It implies that your car is fully covered by your insurance company in all situations.
Thats not necessarily true. There are still plenty of reasons for a car insurance company to deny your claim. Youre never truly fully covered by car insurance. When a car insurance company is advertising its full coverage policy, be aware that youre not fully covered in all situations at all times.
A car insurance company might deny your claim because the driver was unlicensed, for example.
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Do I Need Full Coverage
Is full coverage worth it? That depends. Probably the biggest factor to consider is the age of your vehicle.
Cars begin to lose their value almost right away. Edmunds data suggests a new car loses around 10 percent of its value the moment you leave the lot. Over five years your vehicle will depreciate by 15 percent-25 percent every year.
This drop in value means that the amount you first paid for your car will likely be more than what the insurance company will pay out should it get severely damaged.
Generally, if a vehicle is getting close to ten years old, you might be better saving the money you would spend on full coverage to put towards being able to repair or replace the car yourself.
Does Liability Insurance Cover My Car If Someone Else Hits Me
Your own liability insurance only pays others for damage you cause. It will not pay anything for your own car or your injuries.
If someone else causes an accident, their liability insurance should cover your car damage and injuries. But the other persons insurance will only pay up the limits they bought. If the accident was expensive, their insurance may not be enough to cover all your bills.
In addition, many drivers hit the road without any auto insurance. If they crash into you, they have no insurance to pay for the damage they cause. You can sue another driver who causes a crash, but not all drivers have assets to use to pay for a lawsuit judgment.
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How To Save On Full Coverage Car Insurance
Shop around. To find cheap full coverage insurance, its important to shop around. Compare rates with at least three companies to find the cheapest rate for you.
Look for discounts. There are car insurance discounts for everything from getting good grades to owning a new car. Call your agent to confirm whats offered to maximize your savings.
Consider increasing your deductible. One way to lower your car insurance bill is by raising the deductible, or what you pay before insurance kicks in. Doing this will lower the overall cost of your policy, although savings vary by company.
Avoid traffic infractions. Speeding tickets, accidents and DUIs can increase your car insurance rates drastically, even after one incident. These infractions can stay on your record for three to five years, so make sure to drive cautiously if you want the cheapest rates.
Work on your credit. Your credit history can have a big impact on your auto insurance bill. In fact, our rates analysis found having poor credit can increase your rates as much as a DUI for some drivers.
Despite the name, full coverage insurance doesnt include everything. Depending on your state minimums, coverage that might not be considered full coverage include:
Example Of Comprehensive Insurance
Comprehensive insurance works similar to any other type of auto insurance if you need to file a claim. But if you’ve never had to do so, it helps to have an illustration, so you know what to expect. Heres an example of how comprehensive insurance works if a driver files a claim for vehicle damages.
Say someone drives a Honda Accord worth $10,000, with a $1,000 comprehensive deductible. If a tornado destroys the car, the driver will receive $9,000 from the insurance company. If they dont have comprehensive coverage and a tornado destroys the vehicle, the collision and liability portions of the policy wont cover the damage.
The driver will be responsible for the entire $10,000 loss. A driver might have to get a loan to purchase a replacement vehicle or settle for something less expensive if they dont have $10,000 to spend on an equivalent replacement.
Seeing an example of comprehensive insurance in action can offer some perspective on how valuable it can be if your car is damaged. If you’re leaning more toward the “when to drop comprehensive insurance” side, it’s helpful to know how much damages may cost you to repair out of pocket.
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