Having auto insurance is a must for any driver in Texas. It is required by the state that every driver have a minimum amount of auto insurance by law, but there are different levels of protection with each coverage serving a specific purpose. The law has minimum coverage limits that protect against property damage and liability resulting from an accident; however, there are many other perils your automobile may face. Comprehensive auto insurance helps you prepare for many of the unexpected perils so that you won’t have to restore such losses solely out of pocket.
What is Comprehensive Auto Insurance Coverage?
Comprehensive coverage protects you from various random acts which can cause harm to your automobile outside of having an accident. For example, if you were to be hit by a vehicle, the guilty party’s liability coverage is there to restore your property and other bills such as legal and medical expenses. If your vehicle is stolen or damaged from a fallen object, such claims would not be covered by these types of coverage. This is where comprehensive coverage comes in. With comprehensive coverage, you can file a claim with the confidence that you are covered for such events.
How You Are Protected With Comprehensive Coverage
Random acts outside of an accident with another motorist are covered by comprehensive coverage, but it isn’t blanket coverage. Learn more about how comprehensive coverage can protect you and your vehicle:
- Accidents involving animals such as hitting a deer or livestock.
- Civil disturbances such as riots or vandalism.
- Damage from rocks and other objects which are thrown from other vehicles.
- Damage from various weather events including earthquakes, floods, hail, lightning, storms, and wind.
- Explosions and fire damage.
- Falling trees, branches, or other various objects.
- Grand theft auto.
- Glass damage including your windshield.
If there is damage to your vehicle not involving an accident with another vehicle or piece of property, there’s a good chance you are covered with comprehensive coverage. Still, it is always good to review what your comprehensive coverage does not cover as well:
- Damage from an accident while driving.
- Damage to another driver’s vehicle while driving.
- Hit-and-run situations.
- Loss of income after an accident.
- Medical or legal expenses as a result of an accident.
- Personal property inside of your vehicle that is damaged and/or stolen.
- Pothole damage.
- Underinsured motorists who lack sufficient coverage for your accident.
Again, the takeaway here should be to remember that comprehensive coverage is for the unexpected damages your vehicle may face. For motorists looking to protect against other types of perils, it is important to speak with your auto insurance agent. Doing so will allow you to analyze your coverage needs and find the right coverage options for your lifestyle.
The Cost of Comprehensive Coverage in Texas
According to the Insurance Information Institute (III) and the National Association of Insurance Commissioners (NAIC), the average cost for comprehensive coverage in Texas is $269.90 a year for drivers. Data from the III and ISO®, a Verisk Analytics® business also shows that the average comprehensive coverage claim equated to $1,995 in 2020.
Calculating the cost of your comprehensive coverage is similar to any other insurance policy. The amount you pay in premium comes down to determining the amount of risk you pose as a client. Insurance providers all assess risks differently meaning that the different factors looked at by a company can result in different rates for the same driver and coverage because of their method of calculation. However, to get specific, comprehensive coverage is affected by both the amount you pay in deductible and the value of your vehicle.
Your comprehensive coverage will come with both a deductible and a policy limit. The amount you choose as your deductible affects your rate as a higher deductible will equate to a lower premium. Conversely, a lower deductible will mean a higher premium for drivers, as you will pay less during the aftermath of a loss.
Furthermore, the value of your vehicle affects the price of your premium because your compensation is typically based on the Actual Cash Value (ACV) your vehicle is worth. This means that if you were to incur a loss to an older model vehicle, such as a tree falling on your car in your driveway, and you were to want a new year model, your coverage will not cover the entire cost of replacement. Any additional funds needed would come from your pocket.
How Your Deductible Works
Unique unto comprehensive coverage and collision coverage are deductibles, the amount you must pay before receiving reimbursement from your insurer. If you were to choose a $1,500 deductible, you would find that your monthly premium would be lower than if you had the same policy with a $500 deductible. Should you incur a loss that would cost $2,000 to repair, you’d need to pay your deductible first, and then you would receive the difference to help cover repairs. So, with the $1,500 deductible, you’d receive $500 from your insurance company, while choosing a policy with a $500 deductible would provide $1,500 in compensation.
Determining Your Deductible
Higher deductibles work best for drivers who have a claims history with fewer claims. If you are prone to suffering losses per the perils comprehensive coverage protects you from, a lower deductible could save you money in the long run even if you pay more in premium.
It also helps to consider the possible risks you may face and the possibility of incurring a loss. For example, for a driver with lots of trees posing a threat to their vehicle, comprehensive coverage may make more sense than a driver who keeps their vehicle in a garage away from trees or other potentially fallen objects. If your home is more prone to theft, comprehensive coverage may help protect against a stolen vehicle better than a driver living in an area of low crime.
Drivers less prone to submitting a claim should lean on higher deductibles but prepare for the out-of-pocket costs that come with such losses. If you are more likely to submit a claim, lower deductibles can help offset such burdens and keep you better protected. Speaking with an agent will help you determine your risks and the best course of action for managing such risks.
Comparing Comprehensive and Collision Coverages
Both comprehensive and collision coverage protect your vehicle but they do so in different scenarios. Collision coverage will help you pay for repairing your vehicle in the event of an accident even if you are at fault. Your protection with collision coverage does not cover the miscellaneous perils a comprehensive policy does. It is important to know the difference in how each of these coverage options protects you as they often go hand and hand, working together, yet separately:
- Comprehensive coverage is reimbursement for restoring your vehicle against perils not involving an accident.
- Collision coverage helps you restore your vehicle after an accident involving another vehicle, another object, or single-car crashes such as rollovers or damage from a pothole.
Who Benefits the Most From Comprehensive Coverage?
Drivers prone to the perils protected against by comprehensive coverage would benefit, but not every vehicle will benefit equally. If you own a vehicle that is older or with higher mileage, you may want to reconsider. Comprehensive coverage which costs more in premium and deductible than your auto’s ACV, it doesn’t make financial sense to enroll in such coverages. You’ll want to enroll in comprehensive coverage when the payout of your claim will cover a financial loss you wouldn’t ordinarily be able to cover without it being a problem.
Financed and Leased Vehicles
If you are financing or leasing your vehicle, comprehensive coverage may be a requirement. In some situations, you may be able to drop the coverage, but in doing so, you are opening yourself up to the financial responsibility of restoring losses due to unexpected risks to vehicles you do not fully own.
Find the Right Auto Insurance Coverages Without Overpaying
Freedom Insurance Group helps drivers throughout Texas save money on their auto insurance policies. Whether you are looking to stay legal with minimal coverage, prepare for the unexpected through comprehensive coverage, or looking for any other coverage option such as collision, we’ve got you covered. Working with more than 25 top-rated auto insurance providers, our average client saves 40% on their car insurance premiums.
The way we save you money is by getting to understand your coverage needs and comparing those needs to find the lowest price available. We understand that each client’s needs are different, and we work hard to tailor your coverage to these needs. This allows you the protection you deserve all while saving money.
Our agents can also bundle your home insurance coverage with your auto insurance to provide maximum savings. Get your free auto insurance quote or contact us today to find the right auto insurance coverage for you!