What is Comprehensive Insurance and why do you need it?
In the simplest terms, Comprehensive Insurance is an optional auto insurance coverage that protects your car from damages other than Collision.
Often called “OTC”, Comprehensive Insurance covers losses from things like theft, fire, vandalism, falling objects, glass damage and flooding.
Who Needs Comprehensive Car Insurance?
If you’re not sure if you need comprehensive coverage, here are a few things to consider:
Your Lender May Require It.
Are you financing or leasing a new vehicle?
Typically your lender will require you to have comprehensive coverage until the vehicle is paid off.
Consider The Age of Your Vehicle and How Much It’s Worth
If your car or truck is already paid off, you will NOT be required to carry comprehensive coverage.
However, depending on the value of your vehicle it may still be a good idea to pay for the additional coverage provided by comprehensive insurance.
Consider whether you are willing to pay a substantial amount to repair or replace your vehicle if it were stolen or damaged in an accident?
How Much is the Additional Annual Premium for Comprehensive Coverage?
One way you can determine if you should purchase the additional coverage is by taking the annual cost of the premium for comprehensive and collision insurance and multiply that number by 10.
Is your vehicle worth less than that number?
If it is…it may not be worth buying the additional coverage.
What Is and Is Not Covered by Comprehensive Coverage?
What IS Covered?
- Natural Disasters such as Hurricanes or Tornados
- Falling Objects
- Damage Done to Your Car by Animals
- Civil Unrest (Like Damage Done to Your Property from a Riot)
What IS NOT Covered?
- Damage to Your Vehicle Due to a Collision
- Damage to Another Person’s Vehicle Due to a Collision
- You or Your Passenger’s Medical Expenses After an Accident
Choosing the Right Deductible for Your Comprehensive Insurance
When you purchase the additional coverage, you will have a choice of deductible amounts offered in increments from $500 up to $2,500. The amount you choose for your deductible will directly affect the premium.
The higher the deductible you choose the lower your premium.
However, if you ever need to file a claim you will be required to have a greater out of pocket expense. You should consider how much you would be able to pay without causing financial difficulties.
How to Virtually Eliminate Your Out-Pocket Expense After A Comprehensive Claim?
We have developed the Deductible Relief Program here at Deductible Funding Solutions to assist our members with their out of pocket expenses.
You can actually eliminate your deductible expense by increasing it!
Here’s how it works:
In this example our member is a 35-year old male with no tickets or accidents in the last 3 years and living in the 93001- zip code of Southern California. He drives a 2013 Audi A4 with mostly city driving.
His monthly premium including comprehensive and collision with a $500 deductible was costing him $173 per month.
By increasing his deductible to $1,000 he was able to lower his monthly premium by $37 per month.
He then enrolled in our Family Membership Plan which offers financial assistance to its members to cover deductible expenses for of up to $1,500 per year during any member year that the accident occurs.
What does this all mean?
It means that for $12 less per month he will not have to pay for the first $1,500 of deductible expenses in any member year for as long as he remains a member in good standing.
You should review your insurance coverages and premiums every 6 months to a year.
Insurance carriers adjust rates on a regular basis and if you are not comparing rates you may be paying too much.
It may also be worth comparing what the savings would be if you were to raise your deductibles on the additional coverage options.
The savings may cover the cost of one of our programs and you would virtually eliminate your out of pocket expenses were you to be in an accident. You can learn more about the membership levels available by clicking here.