Insuring our wealth and property is a smart financial move, that is our bulwark against the ravages of time and calamity. Today, insurance is offered for almost everything under the Sun and every kind of damage that could be inflicted on your property, be it fixed or mobile.
What is it?
Comprehensive auto insurance does not restrict itself to cover against any one type of damage but offers coverage for a wide range of property damage problems. It insures your car against much more than just accident-related damage.
What Does it Cover?
Auto insurance policies have two primary insurance components that offer coverage against different types of damages. The two main components are liability coverage and other is coverage against damage in any form. Liability coverage helps you in paying back for damages inflicted by your car on other cars. While damage cover is split into two other components. One is collision insurance and other is comprehensive insurance. The former only compensates you for paying for damages inflicted in accidents only. Whereas, the latter covers for almost all kinds of damages, other than collision damages in accidents. The premium and deductible amounts for both these types of insurance covers are calculated separately. So while looking for auto insurance, have a close look at the details of both these components.
A comprehensive cover, along with collision cover, is a complete insurance solution for you. It helps you pay for damages of several types, including the following:
- Earthquakes and Other Natural Calamities
- Damage Due to Falling Objects
- Storm Damage
- Animal Damage
- Broken Windows
- Water Damage
It pays for every type of car repair and even replacement in case of theft, which costs greater than the minimum deductible amount. That is, repairs which are lesser than the minimum deductible will not be paid for, by the insurance company. The lower the deductible, higher is the premium to be paid for this type of insurance.
The question that naturally pops up is when does one really need it. The premium amounts are high and you need to think if you really need this kind of investment, and whether there will be sizable returns on it. If the area you live in is under a constant risk from natural disasters and other problems, opting for this type of insurance is a must. Carry out risk assessment and decide accordingly. The premium value will be entirely decided by the existing condition of the car, its model and age, as well as usage.
There is a simple rationale behind when and why you should opt for comprehensive cover. It is dictated by the current estimated cash value of your car. When you buy an expensive new car, getting a comprehensive insurance policy is beneficial, as it has a high cash value. However, buying it for a car, whose cash value has already depreciated, may not be that helpful.