Comprehensive Coverage

Comp coverage covers your insured automobile against damage or theft. Damage must be defined as not-at-fault if you strike another object. Rolling or upset of a vehicle is always classified as At-Fault. However accidentally striking a deer that bolts out in front of you is a Comp claim. All claims are subject to a deductible.

Example 1: Your deductible is $500 and your vehicle is stolen

First you would report it to the Police, then second you would report the claim to your insurance company. Normally there is a waiting period of a couple of days to make sure that your car doesnt turn up. After the waiting period, it is deemed a total loss and the claims adjuster will determine the amount of money that your vehicle was worth. If for example your auto was worth $20,000. The insurance company would subtract your pre-set Comprehensive deductible amount from that amount and issue a check in the amount of $19,500.

In other words, the $500 is your amount of "Co-Insurance" on your vehicle. The higher you Co-Insure or raise your deductible, the more money the insurance company will subtract from your premium. $500 isnt a great deal in the event your entire vehicle is lost, however look at the next example.

Example 2: Your deductible is $500 and your automobile is broken into, vandalized and items are stolen.

First you would need to report this event to the Police because the insurance company will want to see a Police Report. Second though, you dont always jump out and make the claim. You need to first figure out if enough damage was made to your car to justify a claim. We stress that the damage has to be made to the car and theft of items must be either be installed or attached permanently to the vehicle to be covered. If you had personal items stolen from the car but they were things like CD's, digital music player, clothes, laptop computer, etc. Then your Automobile Insurance Policy will not cover those personal items! You can still recover economic loss of these items but they must be filed under a Homeowners or Renters Insurance type of Policy.

In this example, the window of your car might only be worth $200 and a hole poked in your seat for another $100, a total of $300 in damage. If you file this claim on your auto policy you will receive $0 and a claim posted on your record (see below for more about comp claims). If a higher amount of damage is sustained by your car, then it might be prudent to make the claim against your auto policy. That is really up to your judgment if the damage is estimated to exceed the amount of your deductible. You should always see advice from your Licensed Insurance Agent if you are unsure on if you should make a claim.

Comprehensive Claims - Can they hurt you?

In short, yes but this claim is considered minor if the amount is low and you dont make them with frequency. Frequency is by far the deciding factor.

The long answer is that even one comp claim might keep you out of a top rating insurance bracket of certain insurance carriers that would otherwise offer you the best possible rate. Each insurance carrier has its own appetite as to what is too often of a frequency of comp claims made. However if you have a noticeable trend of making one at scheduled intervals, it is very likely that this trend will be spotted. Even though these claims are often only counted for the previous 36 months, they remain on your CLUE Report for as long as 5 years. Some insurance carriers will view the 5 year claims history and look for things like a stolen vehicle every 32 months or large comp claims every 24 months. You might even be turned down for having 3 or more comp claims within a 36 month period.

Some people are bitter that they have to pay for insurance but seem to get nothing out of it. Make sure you dont make insurance claims just to do it or to try and "Get your money back" from the insurance company. It would be a bad situation if you make 3 claims for $500 then all the sudden your car gets stolen and you have a 4th claim in a short period of time, your rate goes up and you cant even switch to another company because of your claims history.

Glass Claims

Glass Buyback deductibles can be stapled on to any auto insurance policy that has Comprehensive Coverage on it. Many insureds drove to this coverage in masses and demand that they have it on their vehicle. Why? While some can say they've never been in an accident and others can testify that they've never gotten a speeding ticket or ran a red light. Nobody can say they haven't had a cracked windshield. But what is very commonly misunderstood is that Glass Coverage really only applies to the replacement of the entire windshield. Many insurance companies will cover chips and repairs to windshields without the addition of this rider to your auto policy. Think back now of how many of those windows had to be replaced as opposed to only fixed! If you've had 1 replacement made in the last 10 years but have paid for glass coverage that entire time then you probably lost a little money since the repairs would have been done for free.

Heres a suggestion to save some money, this works especially well if you have more than one car:

1. Verify that you can get your windshield fixed for free without carrying the Glass endorsement.
2. Find out how much that endorsement is per year
3. Find out how much it would cost to reduce your Comprehensive deductible by one or two steps. If its less to do this then lower your Comp deductible then remove the glass endorsement and if you still have savings left over take that amount of money and place it in a savings account you never touch
4. Every year when your insurance renews, place the amount it would cost for the coverage in the account
5. When you've accumulated $100 or so dollars or enough to raise your deductible back up one bracket and take the total amount saved and place that new amount in your savings account
6. If you end up having a claim, empty the account and use that towards your deductible and start over
7. If you dont have a claim, keep piling the money up in the account until you reach $1000 or so on your deductible. Some finance companies will only allow you to have a $500 max deductible, so you might have to hold it steady there. But after a period of time a few hundred dollars in your savings account and building. You have just earned free money!

Exclusions: This tends to work better for drivers that dont drive more than 12,000 miles a year or dont often drive in areas with lots of debris on the roads at higher rates of speed. If you have a long history of breaking entire windshields then you probably already know you are going to be making this claim. However, keep in mind that anything that is not a repair is still a Comprehensive Claim and can increase your premium rate! You might try a variation of this theory because 5 windshield replacements in 3 years will hurt you with most companies if not completely exclude you from qualifying as an insured. Saving $300 every 8 months but paying $2000 a year more in premium will never benefit you.

A Final Note About Deductibles

We have heard reports of one company that very aggressively markets deductibles higher than the very common $500 one. They have even gone to the extent of creating oddball $750 and $1250 deductibles. There are many reasons why they do this and you might initially think its because their being nice trying to save you money by offering you all these additional options. The bottom line is its a sales tool in that they can offer you a policy with a deductible that cannot be compared to a standard auto policy. The main reason is that it discourages claims. Whats the biggest expense of an insurance company besides employees and stock dividends? Claims Payouts! If the average Comprehensive Claim is $800 and Insurance Company A has a $750 deductible, they will see a huge decrease in paid out claims in comparison to the $500 deducts! How many people will file a claim to get $300 as opposed to how many would file to get $50?

GetCoveredUSA.com Insurance Tip: Comprehensive Coverage is always cheaper than Collision Coverage. Mainly because comp claims tend to be small in amount compared to the average Collision Claim.