Should I get comprehensive car insurance coverage?

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Tonya Sisler has a Bachelor’s Degree from the University of South Carolina in Journalism and has worked for 15+ years in management. She has also completed a proofreading certification and is currently...

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Brad Larson has been in the insurance industry for more than a dozen years. He started out as a claims adjuster for a national carrier. He has since switched to the agency side of the business...

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Reviewed byBrad Larsen
Licensed Auto Insurance Agent

UPDATED: Mar 13, 2020

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Every state has laws regarding the need to purchase car insurance. To find cheap car insurance that abide with your state laws has become very easy by using the internet.  Some states only obligate that drivers purchase liability coverage but others may also require that drivers purchase what is considered optional coverage.

Get started on seeing your FREE car insurance quote generator by entering in your ZIP code! Comprehensive car insurance coverage is not amongst this optional coverage and is not mandatory in any state. Even so, drivers may find that they do need to look into making it part of their car insurance policies

should I get comprehensive car insurance coverage

It’s Not Always Up to the Driver

Even though the states do not mandate that drivers have comprehensive car insurance coverage, the choice of purchasing it is not always up to the person who is obtaining a new vehicle. When a buyer is leasing a vehicle or financing it through a bank, a credit union or a financing company, the financier may draw up a contract requiring the lessee purchase comprehensive car insurance coverage.

Purchasing a Vehicle with Financing

In a typical financing deal, the bank, credit union or financing company offers borrowers a sum of money with which they will pay the car seller. In exchange for this loan, the lessee agrees to make monthly payments to the financing company with a finance charge.

When financing a vehicle, the lessee will not be the owner of the vehicle; the financing company will retain ownership. Because of this, the financier can require that the person taking possession of the property purchase car insurance coverage that will protect his investment.

What Comprehensive Car Insurance Protects

A car can be damaged for several reasons other than a collision. Comprehensive car insurance coverage is generally known as insurance for the repair or replacement of a vehicle that has been damaged in a manner other than through collision. Car insurance companies have an extensive list of all of the reasons that comprehensive car insurance coverage will apply, and some of these are:

  • The car is a victim of vandalism
  • The car is stolen after being parked
  • The vehicle collides with wildlife
  • A fire destroys the car
  • A flood carries the car away
  • The vehicle is damaged as a result of an earthquake
  • A falling tree hits the car

If the automobile receives damages in a manner that is covered by the comprehensive car insurance policy, the car insurance company will pay to have the car repaired.

If the car is stolen and cannot be recovered, the comprehensive policy offers the policy holder the amount of money the car was worth the day it was stolen.

Why Financiers Require Comprehensive Car Insurance Coverage

After a car has been damaged, the lessee will not necessarily be able to repair the damages out-of-pocket. If the car is stolen, the lessee may default on the loan that was given and the financier will have difficulties obtaining the money that is owed. Because of these possibilities, one of the things financiers base approval for financing on is purchasing comprehensive car insurance coverage.

Comprehensive Car Insurance for an Older, Used Car

When people purchase a car that is more than three years old, they may want to refrain from purchasing comprehensive car insurance coverage. A good rule of thumb is to determine how much the premiums would be for an older vehicle. If these premiums in a year exceed 10 percent of the vehicle’s market value, comprehensive car insurance is too expensive to maintain on the vehicle.

After an older vehicle has been stolen, the amount of money that the car’s owner would receive may not warrant having paid the premiums for several years. If the car’s value is low enough, the policy holder could have paid more in premiums over time than he or she would receive if the car is taken.

Instead of maintaining comprehensive car insurance coverage on the older car, the owner may place the money that would have been paid in premiums in a savings account. By doing this, the car’s owner would have the means to pay for repairs needed on a vehicle that has been damaged in the ways listed above. The owner would also accumulate money to purchase another used vehicle if the current one is stolen.

Comprehensive Car Insurance on a New Car

When people purchase a new car, they are going to be the ones responsible for repairing or replacing the vehicle if it is damaged or someone steals it. Repairing a new car can be expensive and cost the owners more money than they may be prepared to spend at that moment. If the car is stolen, it will be much more expensive to replace than a lesser value used car.

If the car is new, car owners will have more of an incentive to purchase comprehensive car insurance coverage. The car insurance company helps with payment of the repairs and also helps to replace the vehicle. Another advantage of this type of coverage is the fact that it is not a very expensive part of a car insurance policy; people can add it to their coverage without increasing their policies’ premiums by a large amount.

Will the Car Be Parked In a High Crime Area?

Some people are more likely to need comprehensive car insurance coverage for their new cars than others. One of these groups of people is those who are living in a large urban area. If the area experiences a high instance of vandalism or thefts to automobiles, this is another instance when people will need comprehensive car insurance coverage.

Where Is the Car Being Parked at Night?

A car that is parked in a garage is generally safer and less likely to be vandalized or stolen. People who are parking their cars in private garages may not feel they need to purchase comprehensive coverage, but if the car is being parked on the street, it is more likely to be vandalized or stolen. In this case, comprehensive coverage is a must.

Are Natural Disasters a Common Event?

Areas in which natural disasters take place can cause a vehicle to receive significant damage or even be lost completely and if a car owner lives in these areas, comprehensive coverage would be an excellent addition to their car insurance policies. If the car is parked on the street, it will be opened up to all kinds of reasons that it can be damaged, so comprehensive car insurance will be a very positive addition.

Easily Find Comprehensive Car Insurance Coverage

After deciding that comprehensive car insurance coverage is something that they need to purchase, drivers of new cars can enter their zip codes into our comparison feature for a quote. Comprehensive car insurance coverage is highly beneficial to a new car owner, and the fact that car insurance companies do not charge a lot of money for it can make the decision to purchase it easier. See our FREE car insurance search tool by entering in your ZIP code!

Our comparison website makes finding the best coverage for the best price easy, too, so adding comprehensive car insurance coverage will not be difficult at all for anyone who uses our comparison feature today.

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