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You know that your insurance covers car accidents – after all, that is what car insurance is for, right? But what about damage from a flying baseball, a tree branch which falls on your car, or even something common like hail damage? Whether your insurance covers these events depends, in large part, on what type of insurance coverage you choose for your vehicle.
When you purchase car insurance, you have many choices to make. Sometimes, people are so concerned with getting the “minimum” coverage required by the state, they neglect to explore other coverage options which might be beneficial to them. “Give me whatever is cheapest and legal” is often an attitude which can lead to problems down the road. By taking out only the “required” state-sanctioned insurance, you are most likely going to have only a liability policy. While this is indeed cheaper than full coverage, it provides protection only for others – not for you.
How does Liability Insurance work?
Let’s say that you are in an accident which you caused. Your liability coverage will pay for the other person’s medical bills, if any, the damage to his car, and any costs associated with getting the accident victim taken care of. You, on the other hand, who are paying for the insurance coverage, will not receive anything toward fixing your own car if you only have minimum liability.
In a different scenario, let’s say that you are driving down the road and a sudden hailstorm erupts. Your car is dinged, pinged, and the windshield cracked. A total of $2,500 in damage is done to your car. How much of that will your liability insurance pay? Unfortunately, the answer is “not a penny.”
This is because hail damage is not covered under your liability policy which only pays for other people’s costs. In order to have your insurance pay for your hail damage, you must have a different type of policy called comprehensive insurance.
How does Comprehensive Insurance work?
Comprehensive insurance is often coupled with collision and liability insurance to form what is known as “full coverage.” If you have “full coverage” insurance, the implication is that you will be covered no matter who is at fault in an accident or what type of damages are incurred.
Comprehensive insurance is the policy which pays for everything other than damage caused by an accident. Comprehensive pays if your car is stolen, if it catches fire, if it is broken into, if a child hits it with a baseball – or if it is damaged by a hailstorm or other weather event.
If you have comprehensive and are the victim of hail damage, your comprehensive policy will pay for the damage after you pay a deductible. In the above example, if you had a $250 deductible on your comprehensive policy, you would pay the first $250 of the repair bill, and your insurance would pay the $2,250 balance to repair your car.
Obviously comprehensive coverage is a great thing to have, and if your vehicle is financed, you may not have a choice about carrying it. Most financial institutions require the owner of a vehicle with a debt on it to carry “full coverage” in case the car is damaged, stolen, or wrecked. However, some people feel they cannot afford comprehensive coverage, because they are afraid their premiums will be too high.
How much does comprehensive car insurance coverage cost?
Of course the answer to this question depends on your individual driving record, your age, and the type of car you have, but generally speaking comprehensive coverage costs between 15 and 20 percent of the price of your liability coverage. Together, comprehensive and collision often increase your total insurance bill by 40 to 50 percent. If you are paying $100 per month for liability only, you will probably pay about $150 a month for full coverage. If this doesn’t meet your budget demands, you can often lower the price of your comprehensive coverage by raising your deductible; however, if you do so, you will be required to pay more cash up front if you must make a claim against your comprehensive insurance policy.