Comprehensive Insurance covers
your car, truck or van if it sustains physical damage from a theft, vandalism,
fire, flood and flying or falling objects. Is this coverage a good investment
for you?
You Might Need Collision Insurance Too
Certain insurance companies won't add comprehensive coverage to your policy
unless you also buy collision coverage. However, you can usually purchase
collision insurance without comprehensive. Ask your agent for details.
The Lease or Loan Might Require It
If you lease your vehicle or took out a loan to buy it, the dealership or bank
probably requires you to purchase comprehensive coverage. They might also
mandate the deductible your policy includes. Be sure you understand these
requirements when you talk to your insurance agent about coverage for your new
vehicle.
Factor in the Deductible
Every insurance policy includes a deductible, the amount of money you pay
out-of-pocket when you file a claim. If the deductible for comprehensive
coverage is more than you can afford, don't buy the extra coverage.
However, take into consideration the cost of replacing your vehicle. A flood,
for example, could total your vehicle. In that case, paying the $500 to $1,000
deductible for a replacement vehicle is affordable.
Determine the Value of Your Older Vehicle
You've probably heard that your older vehicle doesn't need comprehensive
coverage. That's because it isn't worth much, and you'll end up paying more for
the premium each month than you would get from the insurance company if your
vehicle were damaged.
Before you discount comprehensive coverage for your older vehicle, do your
homework and consult Kelly Blue Book, Edmunds or NADAguides to determine your
vehicle's value. If you find out that your older vehicle is worth a decent
amount of money, consider adding the optional coverage.
Your decision to purchase comprehensive coverage depends on several factors.
Talk to your agent as you determine if the extra coverage makes sense for your
budget and insurance needs.