Understanding Comprehensive Insurance: A Complete Guide

Comprehensive insurance is a crucial aspect of car ownership that many drivers opt for to ensure their vehicles are protected from a variety of unforeseen incidents. At O1ne Mortgage, we understand the importance of safeguarding your assets, and we’re here to help you navigate the complexities of comprehensive insurance. If you have any questions or need assistance with your mortgage services, don’t hesitate to call us at 213-732-3074.

What Is Comprehensive Insurance?

Comprehensive car insurance is a type of coverage that financially protects your vehicle in situations beyond your control, such as natural disasters, theft, and vandalism. Unlike liability insurance, which covers damages to other people’s property, comprehensive insurance covers your own vehicle. This type of insurance is often required if you finance or lease your car, but it is optional if you own your car outright. However, many car owners choose to purchase comprehensive insurance for added peace of mind.

What Comprehensive Insurance Covers

Comprehensive insurance generally covers a wide range of incidents, including:

• Fire
• Explosions
• Theft and damage resulting from theft
• Windstorms
• Floods
• Hail
• Vandalism
• Contact with animals
• Glass breakage and windshield damage
• Falling objects
• Lightning
• Earthquakes
• Violence from civil unrest or riots

What Comprehensive Insurance Does Not Cover

While comprehensive insurance covers many incidents, it does not cover everything. Typically, it will not cover:

• Accidents with another vehicle
• Hitting another object
• Your car rolling over
• Wear and tear
• Mechanical problems
• Items stolen from your vehicle
• Liability or medical costs
• Damage from potholes

Comprehensive vs. Collision Insurance

It’s essential to understand the difference between comprehensive and collision insurance. Collision insurance pays to repair or replace your car if it’s damaged in a collision with another vehicle or object. In contrast, comprehensive insurance covers incidents other than collisions, such as theft, natural disasters, and vandalism. Due to the broader range of coverage, collision insurance typically costs more than comprehensive insurance.

Do You Need Comprehensive Insurance?

Comprehensive insurance is not legally required in any state, so if you own your vehicle outright, you can decide whether to purchase this coverage. However, there are several situations where comprehensive insurance may be beneficial:

• You park your car on the street or in an area with a high crime rate.
• Your area is prone to natural disasters like hurricanes and wildfires.
• You frequently encounter animals while driving.
• You drive an expensive car.
• You don’t have the cash to repair or replace your car if it’s stolen or damaged.

If you lease or finance your car, your lender may require you to buy comprehensive and collision coverage. Once you pay off the car, you can decide whether to keep comprehensive insurance. A common rule of thumb is to drop comprehensive and collision coverage if your car is worth less than ten times the annual premium for the two coverages combined.

How Much Does Comprehensive Insurance Cost?

The average cost of adding comprehensive coverage to a policy for one car is about $160 per year. However, prices vary among insurance companies because each provider has its own formula for setting rates. Insurers also consider factors such as your age, ZIP code, and gender when calculating your premium. Therefore, the cost you pay may differ from what another driver pays.

When you get quotes for a car insurance policy, the company should break down the cost of each type of coverage you’re considering. This allows you to check how much you’re being charged for comprehensive insurance and compare it against other insurers. There are also ways to save money, such as increasing your deductible or taking advantage of discounts.

How to Get Comprehensive Insurance

Getting comprehensive insurance is relatively straightforward. You can either add the coverage to your existing policy or gather auto insurance quotes that include comprehensive coverage and compare them side by side. Make sure you choose the same coverages for each quote so you know you’re making a good comparison.

A basic car insurance policy includes the minimum coverage your state mandates, while a full coverage policy typically includes liability coverage as well as comprehensive and collision insurance. You can also adjust your coverage amounts. Insurers may offer add-on services like roadside assistance, gap insurance, and coverage for substitute transportation while your car is in the shop.

The Bottom Line

Comprehensive car insurance can be a valuable way to financially protect you and your vehicle. It pays to repair or replace your car if it’s stolen, vandalized, or otherwise damaged by an incident outside your control. The cost of comprehensive car insurance varies with every insurance company and policyholder, but there are ways to reduce your costs. For instance, some states allow insurance companies to use credit-based insurance scores when setting premium rates. If your state allows this practice, consider improving your credit if necessary before buying car insurance. Start by checking your credit report and credit score for free with Experian and addressing any issues you find on your report.

At O1ne Mortgage, we are committed to helping you make informed decisions about your financial future. If you have any questions or need assistance with your mortgage services, please call us at 213-732-3074. Our team of experts is here to provide you with the best service possible.