Car insurance is an important financial protection for car owners, but understanding the different types of coverage and their limits can be overwhelming. Comprehensive coverage is an optional coverage that covers damages to your car that are not caused by collisions.
In this article, we will discuss what comprehensive coverage is, the types of damages it covers, and how to understand comprehensive coverage car insurance limits.
What is Comprehensive Coverage?
Comprehensive coverage is coverave option that will protect your car against non-collision coverage. Most lenders will request you to add comprehensive coverage along with collison coverage to borrow you the money. You can read more about this topic in my previous post: The Ultimate Guide to Comprehensive Coverage for Beginners
Types of Damages Covered by Comprehensive Coverage
Comprehensive coverage covers a lot of non-collision damages to your car, including:
Fire and Explosion Damage
If you parked your car in your home’s garage and a fire starts there, your comprehensive coverage will cover the repair or replacemente cots. Comprehensive coverage will also cover wildfire or fires caused by vandalism, but it won’t cover arson.
However, we all know if fire hits your car, your car insurer will just declare your car totaled. If you have comprehensive coverage and your car is totaled by fire, your car insurer in most cases will pay rental car from $30 to $60 per day for 30 days (just like the amount of time needed to investigate the fire damage, and let your car insurer place a settlement).
I worte another post explaining in detail all this topic:
Comprehensive Coverage for Fire Damage: What's Covered and What's Not
Weather-Related Damage
Comprehensive coverage will pay the repair and replacement bills from all damages coming form natural disasters like tornadoes, hurricanes, floods, hailstorms, and so on.
I worte another post explaining in detail all what comprehensive coverage covers when suffering natural disasters:
How comprehensive coverage can protect you from natural disasters
Theft and Vandalism
Comprehensive coverage will pay the damages caused to your car by theft, just like if they break a window to enter, or when they remove your airbags for sell them. This coverage option is something to consider when you live in a city with high car theft rate.
When car thef, and depending on your comprehensive car insurance policy details, your insurer will pay for a rental car up to a determinate amount of money per day (usually up to 14 to 30 days) , in the mean time, your vehicle may be recovered, in that case, your car insurer adjuster will verify your vehicle status and will check if there is any broken part in your vehicle your comprehensive coverage will cover it minus the stipulated amount of money you have to pay on your deductibles before your insurer cover the rest of the repairs or replacements.
You may read my full post related to the comprehensive coverage and theft:
Comprehensive Car Insurance Theft Coverage: Expert Analysis and Tips
Animal Collisions
Comprehensive coverage will cover damages to your car caused by animal collisions, such as hitting a deer or rodent damages. Remember that if you hit a deer, your comprehensive coverage will cover the damages caused by the deer, but it may not cover any medical expenses related to the accident. Everything depends on your car insurance adjuster's investigation.
You may read my 2 posts related to the comprehensive coverage and animal-realted damages:
Does Comprehensive Car Insurance Cover Hitting a Deer?
Does Comprehensive Car Insurance Cover Rodent Damage?
Falling Objects
Comprehensive coverage will pay the repair or replacement bills if your car has been damaged by falling objects like trees, rocks, and debris.
Understanding Comprehensive Coverage Car Insurance Limits
Comprehensive coverage car insurance limits is just like it sounds, it’s the limit of your coverage, if the repair costs of your car are higher than your coverage limit, you will have to pay it out of your pocket. The limits are usually set as a dollar amount, such as $500 or $1,000, and are listed in the declaration page of your policy.
Factors that Affect Comprehensive Coverage Limits
Many factors will affect on your comprehensive coverage limits, including:
Car Value
The value of your car is a major factor in determining your comprehensive coverage limits. Let’s say you are insuring a Toyota Camry, this car price is between $26,000 and $28,600. This car value is not that high, so your coverage limit won’t be that higher compared to a Bentley, everything depends on the possible costs of the replacement parts.
Deductible
The deductibles you set will greatly affect on your comprehensive coverage limits, and that’s because depending on the amount you set, you are telling to your car insurer if you’re going to set claims so lightly or not.
For example, if you set $250 on deductibles, your car insurer will think you may file lightly claims, something that may cost to repair like $750, and you car insurer deduces $250 from your deductibles, making your car insurer pay $500 for that claim, in that case, your car insurer will most likely set $500 on most part of your car parts.
Location
The location of your car can affect your comprehensive coverage limits. If you live in an area where constantly suffer hurricanes, earthquakes or tornadoes, your coverage limits will be lower for that reason.
How to Choose the Right Comprehensive Coverage Limit
When you choose comprehensive coverage limit, you must to think that can be tricky. It’s like to look for a balance between what you need and what you don’t, this way you won’t overpay for your comprehensive coverage. Here are some tips to help you choose the right comprehensive coverage limit:
Consider Your Car's Value
If you’re purchasing comprehensive coverage for a Bentley, you should consider purchasing higher comprehensive coverage limits to ensure that you are fully protected. On the other hand, if your drive an old cheap car, you may be able to get by with lower limits.
Evaluate Your Risk
Think about how good driver you are, do you live in a neighborhood where car theft or natural disasters are something common? If the answer is yes, you may need higher coverage limits for your comprehensive coverage.
Balance Cost and Coverage
You want to make sure you're getting the right coverage at the right cost, you should compare different coverage options along with comprehensive coverage, this way you can find a balance between the premiums you’re going to pay and the the coverage you’re going to receive for.
The Importance of Reviewing Your Comprehensive Coverage Policy
Soemtimes we forget to read what your comprehensive coverage policy says, and that’s a big mistake. Nobody want to file a claim and find an unfortunate surprise.
You should review your policy at least once per year, this way you can make sure you’re having the right amount of coverage limits for your car.
As you know, the actual cash value of your car decrease over time, or you found a better appartment somewhere, these are several examples you shouldconsider when adjusting your coverage.
What to Do if Your Comprehensive Coverage Claim is Denied
If your insurer denies your claim, or your insurer gave you less money in a check that you might receive an official letter coming from your car insurer following with a document it says you must sign. I recommend you do sign nothing, nor cash that checks, just in case you want to appeal that car insurance denial to the court, because, if you do, if you sign that document and you cash that check, the court may rule that you accepted the decision of your car insurer, and you won’t be able to challenge it.
You must read carefully that letter, but also compare the reasons why are they denying to pay the coverage of your vehicle. You really have to check if you can identify more information that you provide to your auto insurance company, this way they may consider changing their decision.
Each car insurance company policy has a way or a website where you can follow all the procedures for filing a written notice where you can contest that car insurance claim denial.
You may be interested in my post about What can I do when my car insurance company denies my claim?
The Pros and Cons of Comprehensive Coverage
Comprehensive coverage has its pros and cons, here are some of them:
Provides protection against a lot of non-collision damages
It’s and optional coverage, so you can choose the limits and deductibles that fit your needs and budget
Comprehensive coverage protects your car against theft and vandalism
Some of the disadvantages of comprehensive coverage include:
Can be expensive, especially if you drive an expensive car.
May have to set high deductibles, which means you'll have to pay more out of pocket before your insurance cover your car’s damages.
Comprehensive coverage won’t cover collison, you must add collision coverage for that.
Conclusion
Comprehensive coverage is a must when requesting a loan to buy a car, it protects your car against non-collison damages like theft, vandalism or natural disasters, among others. Comprehensive coverage is optional, so you can set your coverage limits, tha means you must consider the amount of coverage limit you want to set, this way you can find a balance between what you pay for your premiums, your deductibles, and the coverage limits you can afford.
Other readers were also interested in the following posts:
How Comprehensive Car Insurance and Financing Work Together
How to Compare Comprehensive Coverage Policies
How to File a Comprehensive Coverage Claim: A Step-by-Step Guide
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