October 16, 2010

When Comprehensive Car Insurance Coverage Is Required For Drivers

When an accident occurs, it is difficult to know exactly what part of an auto insurance policy covers that particular event. Drivers often confuse comprehensive car insurance coverage and collision coverage. A collision policy is damage caused by another vehicle whereas comprehensive covers "Acts of God." Coverage from one insurance company to the next differs but comprehensive typically pays for damage to your car from events such as theft or vandalism.

Although no state requires comprehensive car insurance coverage, most finance companies mandate this type of insurance even if it the car is leased. Quite often, it is an additional policy over and above standard auto insurance.

Comprehensive coverage should be purchased if you own a car that is brand new or is in pristine condition. If your vehicle has a custom paint job that is susceptible to ice storms, hail or other damage from wind related incidents, it would be good to purchase this type of coverage. Rare, vintage autos are another type of vehicle that could benefit from a comprehensive policy. Older vehicles that are not in good condition should not require comprehensive.

As with standard auto insurance, comprehensive car insurance coverage is purchased with a deductible. The deductible is the amount you pay and the policy covers the rest of the repair or replacement costs. Some drivers set their comprehensive deductible high in an effort to keep the premium low because it is commonly thought that an "Act of God" policy will not be used very often. Use caution here, if your deductible is $750 and damages are only $1,200, you will end up paying for the bulk of the repairs.

Standard auto insurance applies to incidents that involve two or more cars. Comprehensive car insurance coverage differs in that it covers almost any type of accident that damages your car. Natural disasters, hail, wind, fire, vandalism and theft are all types of events typically covered by comprehensive policies. In fact, damage by an animal is covered. Even if you are unable to identify what damaged your car, comprehensive typically covers it. In fact, drivers that live in areas with frequent, hazardous weather could be required to purchase this policy or should error on the side of caution to have this in case hail or severe storm damage should occur.

It is important to arm yourself with all of the necessary information when purchasing auto insurance. There are many types of policies with differing language and coverage. It is easy to get stuck with too little or even too much insurance. Even worse, you may have insurance that doesn't apply to your particular accident.