Comprehensive Coverage: Who Needs It and Factors That Determine Rates
The three major categories of auto insurance coverage include liability, collision, and comprehensive coverage. The government requires all drivers to carry liability coverage, and many people add collision coverage, but not comprehensive coverage. However, you may need comprehensive coverage under certain circumstances.
Signs You Need Comprehensive Coverage
Not every driver needs comprehensive coverage. You need the coverage if your circumstances fit any of these situations.
You Don't Own the Car Outright
You may not be the sole owner of the car you drive. If you used a car loan to buy your car, and you haven't completed the loan repayments, then the financier shares the car's ownership with you. The same thing is true if you drive a leased car.
In both cases, the other owners of the car also stand to lose money if the car is totaled in an accident or stolen. What if someone steals the car and you are unable to make the payments? The leasing company or financier would get neither their money nor a car to repossess. Therefore, leasing companies and car financiers insist on comprehensive car insurance.
You Are Likely to File a Comprehensive Claim
Comprehensive coverage covers damage or loss to your car other than those that stem from collisions with other cars. Thus, comprehensive coverage covers losses that stem from collisions with animals, natural disasters, and theft, among others. For example, comprehensive coverage can compensate for your loss if your car burns down in a wildfire incident.
Evaluate your risk of losses that may trigger comprehensive claims and buy the coverage if the risks seem high. For example, how likely are you to file a claim due to fire, theft, flooding, or contact with animals? Where do you park and how frequent are natural disasters in your area? Answer those questions to help you gauge the risks you face.
The Car Is Valuable
You should also consider comprehensive coverage whose loss or damage can cost you thousands of dollars. Thus, you need comprehensive coverage if your car is relatively new, has not experienced serious damage, or is a relatively rare and expensive model. Such cars are expensive to fix or replace.
On the other hand, you probably don't need comprehensive coverage if your vehicle has clocked more than a decade and is not worth a lot of money in its present state. In such a case, a comprehensive claim settlement may not be worth the coverage's premiums.
You Can't Afford to Replace the Car
Lastly, comprehensive coverage is also useful if you can't afford to fix expensive damage or replace the car in case of vandalism, theft, or accident. Your need for the coverage is particularly high if you can't afford to replace or fix the car, but you need a car in your daily life.
Maybe you need a car for work or to take the children to school. Comprehensive coverage ensures you can't go for a long time without a car even if you lose the current one.
Factors That Determine Rates
Like other forms of auto insurance, insurance companies rely on several factors to calculate comprehensive coverage rates. Here are some of the factors that determine how much you pay for the coverage:
The value of the car: Expensive cars attract high rates.
Your driving history: Bad driving history translates to higher rates due to the high risk of accidents.
Your location: High-risk locations, such as those with frequent natural disasters, attract high premiums.
Comprehensive coverage is relatively inexpensive so most of those who need the coverage can afford it.
Contact Southeastern today if you need comprehensive or any other form of car insurance coverage.