If you're lookg for comprehensive insurance, you'll notice that policies vary significantly from one provider to another. Comprehensive insurance policies often protect your car against many sorts of non-collision damages, but they also have exclusions, and deductibles to set up before purchasing your policy.
As a consumer, you must understand exactly what is covered and what isn't under your policy. This is where transparency and clarity come in. In this article, we'll explore the importance of transparency and clarity in comprehensive insurance policies.
What is comprehensive insurance?
First, let's define comprehensive insurance. Comprehensive insurance is a coverage option that protects your vehicle from non-collision damages such as theft, vandalism, fire, hail, falling objects, and natural disasters, within others. Comprehensive insurance will never cover damage from collisions or accidents with other vehicles or objects.
You may be interested to read more about what comprehensive insurance is in the following post:
How Does Comprehensive Car Insurance Work?
The importance of transparency
When shopping for comprehensive insurance, transparency is crucial. Transparency ensures that you really understand what is covered under your policy and what is not. If your policy would have lack of transparency, that can lead to surprises and disappointments when you’re going to file a claim.
For example.
The declaration page of your comprehensive insurance might have a rider that is basically an attachment on your policy that alters the coverage terms
Understanding your coverage
Transparency helps you understand what your policy covers and how much coverage you have.
Some comprehensive policies have limits on how much they will pay for certain types of damage.
For example,
Your comprhensive insurance policy may only cover windshield repairs twice per year or they can provide you a rental car for a specific amount of money and time. In that case, your policy must explain it properly.
If really understand these limits, you will be able to know if you need umbrella coverage or add more coverage limit to your comprehensive insurance policy.
Knowing your deductibles
Transparency also helps you understand your deductibles. Deductibles is the amount you must pay out of pocket before your insurance start covering the repair or replacement costs of your vehicle.
Let’s explain this in detail:
When you set your deductibles up, you must think between what will you have to pay out of your pocket and what not. For example, you set $500 on deductibles, and a tree branch falls down to your windshield, that branch is very big, and the hit was very hard, having no choice but replace your deductibles.
On average, a windshield replacement costs between $400 and $450. As you set your deductibles for $500, you should not file any claim, just inform your car insurer what happened, and tell them you’re not going to file a claim because you know the replacement is not worth to.
In the other hand, if you hit a deer, and that deer tackled directly to your car, the hood of your car may have serious damages, and those repair costs are extremelly expensive. On average a hood repair may cost up to $6,000. In that case, you will have to file a claim, your car insurer will make a settlement worth $5,500 ($6,000 on repair costs minus $500 on decutibles equals $5,500 on your car insurer’s settlement).
You may be interested to read more about deducibles in the following posts:
How to Choose the Right Comprehensive Coverage Insurance Deductible
Avoiding surprises
Transparency on your comprehensive insurance will help you avoiding surprises. For example, if your policy does not cover damage caused by a certain type of natural disaster, you'll want to know that upfront. This way you will be able to take steps to protect your vehicle against that sort of damages. As mentioned above, your comprehensive insurance won’t cover collision damages, so you may consider adding collision insurance to be fully protected.
You may be inerested to know What is Not Covered in your Comprehensive Car Insurance
The importance of clarity
In addition to transparency, clarity is also important in comprehensive insurance policies.
That means, when we talk about the clarity in our policies, we ensure that the language used in the policy will be easy to understand, and there won’t be any misunderstoods when filing a claim. In case there’s something not so clear in your policy, you must pay attention and check all your comprehensive nsurance documents carefully, then pick a piece of paper and write down all the sentences you feel like are not so clear.
Once you finish writing down all your unclear sentences in your policy, you must contact to your comprehensive insurance company agent, s/he will clarify anything that is not clear enough. If you think there must be any change in your policy, that will be the best timing to do it.
Avoiding ambiguity
Clarity helps avoid ambiguity. When we talk about ambiguity, we are talking about this sort of expression “coverage ”
Insurance policies are often filled with legal jargon that can be difficult to understand. Fortunately, based on the document called “Resolving Ambiguities in Insurance Policy Language” by Robins Kaplan Miller & Ciresi. Ambiguities in insurance policies must be interpreted in favor of the insured.
Understanding exclusions
Clarity helps you understand exclusions in your comprehensive insurance policy. Exclusions are the things that are not covered by your policy. Let’s say you want to do a race with your car, so firstly, your comprehensive insurance will never cover it.
Perhaps you find your comprehensive insurance covers water damage only caused by hurricanes or floods, but it may not cover water damage from a broken pipe. So if you understand your comprehensive insurance exclusions, you will know what is covered and what not.
Conclusion
Comprehensive insurance is an important investment that protects your vehicle against non-collision damages. However, remember that not all comprehensive policies are created the same as default. When shopping for insurance, you must look for policies that are transparent and clear. Transparency in comprehensive insurance policies ensures that you understand what is covered and what isn't, while clarity ensures that the written language in your policy is easy to understand. If you feel you’re reading a comprehensive insurance policy in an unknown language, you should not purchase it. look for another that use clear and transparent language.
Other readers were also interested in some of the following posts:
The importance of documentation in comprehensive insurance claims
The History of Comprehensive Insurance and How It Has Evolved
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