What Is Car Comp Insurance?
Auto insurance is an essential part of car ownership. State laws require car owners to carry a basic level of auto liability insurance to pay for damage they cause to other drivers and their property. In addition to legally required coverage, car owners may choose to purchase extra optional insurance such as comprehensive (comp) coverage. Comprehensive car insurance compensates car owners for various non-driving-related perils that may damage a car.
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Comprehensive Coverage Basics
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The law does not require comprehensive auto insurance, but it may be required by an auto loan lender to protect the value of your car. Comprehensive insurance can compensate you for damage that arises due to "acts of God" such as fires, storm damage, hail damage, water damage and fallen trees. Comprehensive coverage can also include damage caused due to vandalism, losses that result from auto theft and damage caused by hitting wild animals such as deer.
Cost
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Carrying comprehensive coverage will increase the total cost of your auto insurance package. The additional cost of comprehensive coverage will depend on the limits of the coverage (the maximum amount the auto insurance company will pay out under the terms of the plan) and the deductible you choose. A deductible is an upfront cost you must pay toward damages before you will receive compensation from an insurance company. In addition, some comprehensive insurance plans include"full glass" coverage where damage to glass on the car such as windows and windshields will be covered before you pay the deductible. Adding full glass coverage will increase the cost of insurance.
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Pros and Cons
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Comprehensive insurance is beneficial in that it can prevent the financial burden of losing a car to an unexpected event. The more valuable a vehicle is, the more important it is to carry comprehensive insurance. If your vehicle is less valuable, it might not be worth paying for the additional coverage to protect your car. For example, if your car is only worth $1,000, you might be better off simply replacing the car if it is severely damaged by an unanticipated event rather than paying for comprehensive insurance.
Considerations
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It is important to read auto insurance terms carefully before signing a contract. The exact types of losses that are covered, the deductibles, limits and terms to make claims can vary from one insurance policy to another. If you are concerned about a particular type of damage, such as damage caused by hitting wild animals, make sure that it is included in your insurance policy.
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