What Does Comprehensive Insurance Cover?
How much does it cost to replace everything you own in the event of a fire? A flood? A burglary? These are all important questions to ask when deciding whether or not to buy comprehensive insurance, but there are several things you might want to know before signing on the dotted line.
In this article, we’ll discuss what comprehensive insurance covers, who should buy it, and how much it costs per month if you don’t already have it on your policy.
Types of Damage
What are some of these different types of damage? Here’s a list of what comprehensive insurance covers vandalism, fire, lightning, explosions, windstorms or hail, flood or water damage from any source (including broken pipes), riots or civil commotion, aircraft and vehicle crashes (whether intentional or accidental), and falling objects.
Basically, if it can happen to your car and cause serious damage that’s not related to a collision with another object—your car is covered. If you have comprehensive coverage on your policy, you’re generally protected against loss due to theft as well.
However, keep in mind that there may be limits on what your policy will payout for certain losses if you’re interested in purchasing additional coverage for theft-related damages, check with your agent or company representative before buying a policy.
Some policies may offer optional add-ons such as emergency road service, rental reimbursement, and even trip interruption/cancellation protection. These features might come at an extra cost but could help alleviate some of your stress in case of an accident or other unfortunate event. What’s more, many companies also offer discounts for bundling auto and home insurance together.
Keep reading to learn more about what happens when you file a claim under your comprehensive auto insurance policy. What Happens When You File a Claim: Once you submit your comprehensive auto insurance claim, your insurer will likely ask for proof of ownership, along with detailed photos of your damaged vehicle and estimates from repair shops.
They may also want statements from witnesses who saw what happened to your car. Once they receive all of your documentation, they’ll evaluate what happened and decide whether to approve or deny your claim. What Happens After Your Claim Is Denied: If you get turned down for a comprehensive auto insurance claim, don’t give up hope just yet! It could just mean that your insurer wants more information before they make their decision.
Try following up with them by providing whatever evidence they need so you can get back on track toward filing a successful claim. What Happens After Your Claim Is Approved: Congratulations! Your comprehensive auto insurance claim has been approved, which means you’re one step closer to getting your car fixed. Depending on what type of damage occurred, your insurer may choose to either fix or replace your vehicle. If your car was totaled, you’ll receive a settlement based on its current market value. If it was only partially damaged, your insurer will cover repairs and deductibles from your settlement amount.
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For example, say you had $1,000 worth of damage done to your front bumper after someone crashed into you while driving recklessly. Your deductible is $500; therefore, you would be responsible for paying $500 out of pocket to have repairs made before receiving compensation from your insurer. What Happens If There’s Still Money Left Over? What happens to your remaining money once you’ve received compensation for your comprehensive auto insurance claim depends on how much you originally paid for your policy.
If you paid for full replacement value, then you’ll receive a check equal to what remains of your settlement after subtracting applicable deductible and repair costs. If you chose to purchase a policy with cash value, you’ll receive a check equal to what remains of your settlement minus applicable deductible and repair costs, plus interest. If you purchased a policy with an agreed-upon value, then your insurer will subtract applicable deductible and repair costs from your claim payment before adding interest. What Happens If Your Car Was Totaled?
If you’re driving during a storm and your car is hit by rain-filled potholes or other waterlogged hazards, comprehensive insurance covers your vehicle for damage. This sort of claim usually isn’t covered under other types of car insurance, so it’s important coverage to have. If your wheels are damaged, for example, comprehensive coverage can help you pay to replace them.
The only downside is that comprehensive insurance costs more than basic auto insurance. It also has its own deductible, which means you might be on the hook for some out-of-pocket expenses if your car sustains any damage from weather events. That said, having comprehensive coverage is still worth it in most cases.
In fact, if you live in an area prone to hail storms or flash floods—or if you just want extra protection—you may want to consider getting additional coverage through a specialty policy. For instance, Allstate offers a supplemental product called Allstate Hail Shield.
By paying an additional $30 per year (for cars) or $60 per year (for motorcycles), you can receive up to $1,000 toward repairs when your car sustains damage from hailstorms. Similarly, State Farm sells a similar product called State Farm Storm Damage Coverage, which provides up to $1,500 toward repairs after severe weather events like tornadoes and hurricanes.
An ordinary comprehensive insurance policy won’t cover fire damage to your home. If you want coverage in case a candle, lighter, or ember from a fireplace starts a fire, you’ll need to add coverage for that kind of hazard onto your policy (known as an endorsement). A typical homeowner’s insurance policy doesn’t include fire damage caused by lightning strikes, but you can purchase special extra coverage called an extended peril policy.
For example, if you live in an area prone to hurricanes and tornadoes, you might consider purchasing coverage for windstorms and hail damage. If a tornado causes significant damage to your roof and walls, a standard homeowners policy will not pay for repairs; however, if you have purchased extra windstorm coverage on top of your basic policy, it will kick in at that point.
Your agent can help you decide what type of coverage is right for your situation. The same goes for flood damage: Some policies provide flood protection while others don’t, so talk with your agent about what you need before buying a policy. Finally, make sure you understand what perils are covered under your policy—and which ones aren’t.
You may be surprised by what isn’t included, like mold damage or earthquake damage. It may be worth shopping around for another company that offers more complete coverage for these situations.
The following information should also be included: How does comprehensive insurance work? When something bad happens to your car, such as getting into an accident or having someone steal it, you file a claim with your insurer. Most companies ask for two estimates: one from a repair shop and one from a body shop. Once they receive those estimates, they’ll usually issue payment directly to you within 15 days. You then take that money and use it to fix up your car—or buy yourself a new one.
Vandalism and Theft
If your car gets stolen or vandalized, you’ll likely be covered by comprehensive insurance. That’s because comprehensive policies protect against any kind of loss, including theft and vandalism. In addition to covering damage to your vehicle, some insurers will pay for living expenses while your car is being repaired. Check with your insurer to find out what they cover. Keep in mind that if you have a loan on your car, there may be restrictions on how much an insurer will pay to repair it.
For example, if you financed your car through a bank or credit union, they might require that you use their recommended auto body shop. This means you could end up paying more than necessary to get your car fixed—and in some cases might not even qualify for repairs at all. So before signing on the dotted line, check with your lender about what type of coverage they offer (or recommend) as well as what requirements they have regarding using their preferred auto body shops. Then look around to see what other options are available.
You might find that aftermarket parts and/or independent repair shops can give you better service for less money. Some lenders also have caps on what they’ll pay out in damages, so if your repairs cost more than what’s covered by your policy, you’re responsible for making up the difference yourself.
While you might think your auto insurance policy will pay for repairs if your vehicle is damaged in an accident, that’s not always what happens. To ensure you’re covered, ask your agent to explain how comprehensive insurance covers accidents.
This can help you learn more about what type of incident could cause damage to your car and how much it might cost to repair. For example, if a deer jumps out in front of you while driving on a country road at night, causing you to crash into a tree, comprehensive coverage may cover damages caused by hitting that tree—but only up to your deductible amount.
If you don’t have enough money saved up for that deductible amount (usually $1,000 or so), then collision coverage would kick in and handle any costs beyond what your deductible amount would cover. So if you hit that tree and total your car, collision coverage would be what pays for it. However, with comprehensive coverage, you wouldn’t be responsible for paying anything above what your deductible amount was ($1,000).