In the great state of Texas general liability insurance is required by law for all those driving a vehicle. But what is General Liability? As the minimum required coverage for a driver, liability protects the other driver in case of an accident or collision. However, the driver does not have any coverage for the damage done to the vehicle if it is a non-collision accident. That is where is comprehensive coverage comes in. Have you heard of the term, “Comp & Collision”? Well, let’s look at what comprehensive covers
Comprehensive coverage comes into to play when there isn’t a collision with another vehicle. Parked in flood zone and your car is damaged by water? Hit a deer? A fallen tree compresses your car after a storm? Comprehensive covers damages from theft, fire, weather, vandalism, and animal damage. Although comprehensive isn’t required by law it is a good idea depending on the value of your vehicle. Most new cars that are financed or leased require “full coverage” insurance- meaning comprehensive and collision in order to purchase the vehicle.
Coverage cost depends on a few different things. The make and model as well as the deductible. When considering comprehensive coverage, the rate is affected by the deductible. Typically, the higher the deductible the lower the monthly premium. However, that means when it comes time to make a claim you will be paying more out of pocket. Deductibles range from $200 -$1000 typically. A driver with a $500 deductible may have a slightly higher monthly premium but if the damages of the vehicle average $2000, the insured will only be out $500. If a driver opts for a lower monthly premium they’ll want to make sure they are able to cover more of the cost in the event of an accident.
Your cars cash value. Ultimately, the car’s value is the most important factor in determining whether comprehensive coverage is a good idea. For a car that’s not worth much – perhaps because it’s old or banged up – the payout may be less than or equal to the cost of the insurance. According to Consumer Reports, one common rule of thumb is that the annual cost of comprehensive auto coverage should be less than 10 percent of the vehicle’s cash value.
In other words, the purpose of comprehensive auto insurance is to protect the value of the car from non-accident damage. If the deductible is more than the value of the vehicle than comprehensive may not be worth it.
For coverage questions, reach out to our licensed agents and they will help you determine the best coverage options for the best rate. You can also shop online and receive a free comparative quote at empowerins.com