Proof of automobile insurance is a requirement in most states before you can get your car's license tags, but not all insurance policies are equal. A comprehensive insurance policy protects you from financial loss if your car is stolen or damaged. Depending upon the value and the current condition of the car, a comprehensive policy might be beneficial.
Function
A comprehensive policy protects your financial investment in your automobile. If you're making payments on a car, the lending company will likely insist that you carry this type of insurance, in addition to other coverage, to protect their investment.The insurance company will pay for the repairs, minus the amount of your deductible, if your car suffers damage in a covered incident.
Features
Comprehensive insurance covers many types of damage to your car, but it does not include collision coverage, which you must purchase separately or as part of a combination policy. Comprehensive coverage covers damage caused by vandalism or theft, storm-related damages, accidental damages from falling or airborne objects, and it may also cover damages when you don't know the cause.
Benefits
Because auto-body repairs are costly, comprehensive insurance makes it affordable to return the car to its original condition, including a paint job and interior repairs. Visible automobile damages may greatly reduce the value of your car.
Cost
Comprehensive insurance is generally expensive, but the actual cost depends upon the replacement value of your vehicle. If your car is worth less than $4,000, you may save money by not purchasing comprehensive coverage and paying for damage out-of-pocket. In addition, you can lower your premiums by accepting a higher deductible.
Considerations
Comparing comprehensive insurance policies is important before choosing one. Different insurance companies charge different rates, and some policies may exclude important features, such as windshield replacement or hail damage. If you're making car payments and you cancel your comprehensive coverage, the insurance agency will notify the finance company.
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