27 Aug Understanding the Ins and Outs of Comprehensive Coverage
Updated 8/27/18 – Comprehensive coverage is an optional form of auto insurance coverage that you might want to consider adding to your policy. Since comprehension coverage is not required by the state, you don’t have to purchase this coverage if you don’t want to. If you have obtained a loan in order to purchase your vehicle, however, the lender may require comprehensive coverage.
What Does Comprehensive Coverage Cover?
Comprehensive coverage pays for repairs to your vehicle. Unlike collision coverage, however, comprehensive coverage does not pay for damage inflicted by an accident. Rather, comprehensive coverage pays for damages that are caused by an “unknown party” or when the damage occurs from an “act of God.” Therefore, damage resulting from the following causes are covered by comprehensive coverage:
- Hitting an animal
In order to make certain your car is protected from any type of damage, it is important to carry both comprehensive and collision coverage. In many cases, having both of these types of coverage in place is referred to as having “full coverage.
Are There Any Exceptions to the Comprehensive Coverage?
Before signing up for a comprehensive insurance policy, it is important to read all of the fine details of the policy. Sometimes, you may not be getting quite the coverage you thought you were receiving. For example, some comprehensive polices may not cover damage to your car caused by a fallen tree if your car was parked inside of a garage at the time. Make certain you are fully aware of the exclusions and that those exclusions are acceptable to you before you start your policy.
How Much Money Will I Get from My Comprehensive Coverage?
The exact amount of money you receive through your comprehensive insurance policy will depend upon how much damage your vehicle has incurred, the fair market value of your vehicle, and the amount of your deductible.
After your vehicle becomes damaged, an appraiser will look at your vehicle and determine how much it will cost to repair the damage. If this cost is less than the fair market value of the home, you will receive a payment in the amount of the damage. If the damage will cost more to repair than the fair market value, you will receive a payment in the amount of the fair market value of the vehicle.
Before you actually receive a check for the damage to your vehicle, however, the deductible will be removed. If you have damage in the amount of $2,000 and you have a deductible of $500, for example, you will receive a check for $1,500. The greater your deductible, the less you will pay each month for your insurance coverage.