Comprehensive Car Insurance – Should You Spend The Extra Money

The most critical part of insuring a car depends on what will be covered and what may not be covered. Insurance companies all offer similar benefits and policies towards any vehicle with the main difference being rates. Comprehensive car insurance refers to the coverage on the insured car and others but not limited to collision claims. This type of insurance coverage will cover damages done to your car whether stolen, or damaged by natural catastrophes or even animals.

Comprehensive coverage can offer lower or higher premiums depending on your deductible amount. Your deductible is the amount you are willing to be responsible for in the event of an accident. This means that the higher your deductible amount is, the lower the premiums.

For example, if you choose a deductible amount of $500 and the car suffers damages that cost $4,500 to repair, then the insurance company would pay the $4000 you would pay $500. However, should the damages be equivalent to $450, you pay for the repair yourself without having to involve the insurance company.

If you are seeking the lowest possible insurance rates for your car, than you would select a higher deductible amount. Insurance companies realize that many comprehensive claims will be in the lower (under $2000) price range. Because of this the risk to them (and their cost) is reduced and they will give you a lower premium.

Insurance customers who may gain from a car’s comprehensive insurance are those who have a financed or leased car and if one has a new vehicle or one in perfect driving condition. Otherwise, persons with older, less valuable cars should consider a non-comprehensive policy with a higher deductible. Therefore, it is important to know the value and especially the replacement value of your car because this has a lot to do with the cost of repairs.

So your comprehensive coverage revolves around your willingness to pay a higher deductible to gain lower premiums as well as a vehicle that is risk free from being accident prone. Eventually, comprehensive car insurance covers more risks as compared to a Third Party Insurance.

In most cases, when you have an auto loan or lease, the lending institution that you have the loan/lease with will require you to carry comprehensive coverage. The reason for this is that the car legally belongs to them and they of course want to make sure that any damage done to the car is repaired properly.

Pungky Dwiasmoro Hiswardhani

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