What you need to know about comprehensive coverage

What you need to know about comprehensive coverage

August 29, 2016
comprehensive coverage
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There’s more than one way for your property to be damaged or destroyed. Most of us only think that our cars can get damaged if we’re involved in an accident. But what if something happens that is not related to a covered accident? Liability insurance and collision coverage cover accidents, but not weather damage, hitting a deer or your car getting stolen? This is where comprehensive coverage comes in.

How comprehensive coverage works

Comprehensive coverage is optional. You don’t need to have it, unless your lender or lessor requires you to. Looking at its name, you might be tempted to think that this type of insurance is all-encompassing. But this is not the case. Comprehensive coverage only protects your car against damage not related to an accident, such as:

  • Theft;
  • Vandalism;
  • Fire;
  • Natural disasters;
  • Falling objects;
  • Damage done to your car by animals;
  • Civil disturbance.

What you need to know

As with all insurance policies, it’s important that you also check with your insurance agent to find out exactly what perils are included under the comprehensive coverage of your policy. Another thing you should be aware of is the fact that comprehensive insurance can be a tad on the expensive side. That’s why you have to make sure that it suits all your needs.

If you lease your vehicle or if you still owe money on it, this type of coverage might be mandatory. You should check with your lender or lease holder to make sure that it is a requirement.

However, if your car is paid off, then comprehensive coverage is optional. You can still get it, but, because of the costs that come with it, you might also want to ask yourself if it’s such a good idea. If your car is old or if it’s value has dropped a lot since you purchased it, you might just end up losing money with comprehensive coverage.

A piece of advice

Although it can be costly, you can still make comprehensive coverage affordable by installing anti-theft devices or extra protection on your car.

The bottom line

You can never be sure of what can and can’t happen to your car. Comprehensive coverage might cost more, but it can offer you the peace of mind that comes with knowing that you’re protected in the event of a covered peril.

Thomas Hookton is a finance journalist, history buff and science fiction connoisseur. Hit him up via email.

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