On Car Insurance What is Comprehensive?

Car insurance consists of two major categories: collision and comprehensive. For comprehensive one, this insurance will cover the damage or problems that don't belong to collision. The examples of coverage are theft, fire, riot, animal collision, natural disaster, storm, snow, flood, and explosion. In the event where the car is in riot area and the collision happens, the insurance still puts comprehensive protection as the core benefit.

This kind of insurance is mandatory if the owner wants to purchase one by the car loan. The bank or credit institution considers comprehensive coverage to protect financial aspect in the future. Furthermore, people who live in high-risk area are necessary to purchase this insurance.

How does It Work?

In general, all benefits that are not covered by collision insurance will be the responsibility to this kind of insurance. Protection may extend to something that's unexpected and uncategorized. Financial aid is available in two models: repairing and buying new one. Theft or stolen car will receive benefit with the option for purchasing new car with the same brands or relatively new production.

This insurances use deductible payment to reduce out of pocket spending. The car owner pay $1,000 for damage or trouble that may happen in the future. If the car is wrecked by tree or falling object, repairing money is deductible. The damage cost might be $4,000, and the car owner only pay $1,000. The rest of the cost will be the responsibility to insurance company.

There is limit how much money to overcome damage, especially stolen situation. The car owner has two options to handle this situation. Insurance company offers to purchase new one with deductible money model. On the other side, the owner only receives damage payment from the money that has been paid to insurance company.

Things to Consider before Purchasing Comprehensive Car Insurance

Before purchasing comprehensive car insurance, there are few things to know and consider. Firstly, this insurance is necessary if the damage is expected to spend more cost than car owners can cover on their own. This insurance only works when bad thing happens that does not involve collision with other cars or drivers. However, the insurance is also not for medical bill, compensation, or any health treatment as the result of collision.

The insurance is optional until the things are considered, and one of them is the cost for repairing car in the future. Repairing old car is expensive due to lack of spare part. When damage or wreck happens, the car still needs to repair, and the cost will come from comprehensive insurance.