Comprehensive coverage refers to a kind of insurance that offers the possibility of repairing or replacing the item that is insured. Comprehensive coverage is usually used in the context of car insurance policies, although it can also be used for other specific kinds of insurance policies. For the purposes of this article, comprehensive coverage will be limited to car insurance policies.
In general, when people take out insurance for their vehicles, they choose to include comprehensive coverage. This is due to the fact comprehensive coverage offers more security to the policyholder. Basic car insurance will only cover damages that result from simple car accidents. On the other hand, comprehensive coverage will go further and pay for damages that result from events aside from vehicular accidents. For example, if your car gets damaged because of flooding in your area, comprehensive coverage may pay for the repair of the car. In cases wherein vehicles are damaged beyond repair, comprehensive coverage may give a payout as well.
While many people opt to include comprehensive coverage, it is not always compulsory, depending on the location where you purchase a vehicle. In some cases, it also depends on where you get financing for your car. Some auto loan providers will require that you purchase comprehensive insurance for the car, at least for the life of the loan. This provides the lender with more security regarding their investment.
The cost of comprehensive coverage will also depend on your location, the insurance provider, and the vehicle that you purchase. It is important that before you set out to buy a car, you already have an idea regarding the cost of insurance. This will help you in deciding which is the best deal for you.