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Comprehensive Car Insurance: What Is It & Why Isn’t It Mandatory?

When it comes to car insurance, many people feel confused by the different types of policies offered and the terminology used by insurance companies. By doing a bit of reading and research, however, one can quickly understand the differences between various insurance policies and the type of damage that they cover. One question that is asked rather frequently is: what is comprehensive car insurance and is it better than other types of car insurance? In order to answer this, we first need to understand the components that make up a comprehensive car insurance policy.

Comprehensive Car Insurance Liability and Own Vehicle Coverage

It is made up of two different types of coverage: liability coverage and own vehicle coverage. The first type protects you from civil liability should you get into a car accident where you are at fault and cause property damage or bodily injury to another person. In most states it is mandatory to have this type of coverage on all motor vehicles as it guarantees that you will be able to pay for any damages that you have caused when involved in an accident. This could include damage to another vehicle, public or private property, in addition to injuries caused to the passengers of another car.

Know the Minimal Auto Insurance Requirements In Your State

Each state sets a minimal amount of liability insurance that every motorist is required to carry. Failure to have adequate liability insurance could expose you to lawsuits should you be found to be at fault in an accident where someone was injured or property was damaged. In contrast to liability insurance, own vehicle coverage insures the value of your own vehicle. If you are involved in an accident in which you were at fault, this type of coverage will pay for damages that were caused to your car. It can also cover events other than automobile accidents, such as fire, theft and acts of vandalism.  Be sure that you know how to compare aspects of comprehensive car insurance vs. collision insurance coverage when shopping for a policy.

Comprehensive Car Insurance Coverage is Not a Necessity

Comprehensive auto insurance basically is a policy that covers both: damage to your own car and well as 3rd party liability. While it is not absolutely necessary to have comprehensive insurance in order to meet minimum legal requirements, getting this type of policy is recommended in most cases. If you only have liability insurance and your car is stolen, for example, you will not receive any compensation from your insurance company. This would mean that you would lose all the money that you have paid for the car. Unless you have a vehicle that is practically worthless, it is therefore recommended that you take comprehensive insurance.

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