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What Is Comprehensive Coverage?
Comprehensive coverage is a type of auto insurance that pays for car damages that don’t result from a collision with another vehicle. The following are a few common examples of comprehensive claims:
- Collision with a deer, moose, or another animal
- Damage due to the activities of rodents, insects, and other animals
- Damage resulting from a flood or weather-related event such as a hailstorm
- Theft or vandalism
It’s important to note that comprehensive auto insurance doesn’t cover normal wear and tear. Also, it provides strictly restricted coverage on maintenance costs.
What Is the Difference Between Comprehensive and Collision Coverage?
Comprehensive coverage and collision coverage work together to protect you against financial losses that result from physical damage to your vehicle. If you have collision coverage, you can claim compensation if your vehicle is damaged after colliding with another object. Examples of collision claims include:
- Collision with one or more vehicles
- Crash into a stationary object such as a wall or pole
How Does a Compensation Claim Affect Your Auto Insurance Rates?
In a survey, The Zebra discovered a comprehensive claim increases auto insurance premiums for a standard six-month policy by an average of $36. The most affordable insurance companies for drivers who have previously filed a comprehensive claim are USAA, GEICO, and State Farm. Below are the average rates for a six-month policy from different insurers:
- Allstate: $944 with no claim and $949 with one comprehensive claim
- Farmers: $762 with no claim and $786 with one comprehensive claim
- GEICO: $638 with or without a comprehensive claim
- Liberty Mutual: $823 with no claim and $829 with one comprehensive claim
- Nationwide: $673 with or without a comprehensive claim
- Progressive: $802 with no claim and $908 with a comprehensive claim
- State Farm: $656 with or without a comprehensive claim
- USAA: $474 with or without a comprehensive claim
What Are the Factors Affecting Your Premiums After a Claim?
In most cases, filing a claim will cause your auto insurance premiums to rise by an average of 3 percent to 32 percent for three to five years, says WalletHub. The extent of the rate increase depends on the following factors:
- Type and amount of claim
- Your claims history
- Your insurance company
- Your location
- Availability of accident forgiveness
The most important factors influencing your car insurance premiums following an accident are the type and amount of claim you made. An at-fault accident will increase your rates the most, especially if it leads to more than $2000 worth of damages. Your premiums won’t jump as much if you aren’t the at-fault party, or if the accident is beyond your control, but you’ll likely still see a rise in your insurance costs. Find out below how different types of claims bump up your auto insurance rates:
- Bodily injuries in an at-fault accident: 32 percent
- Property damage exceeding $2000 in an at-fault accident: 31 percent
- Property damage below $2000 in an at-fault accident: 26 percent
- Comprehensive claim exceeding $2000: 3 percent
- Comprehensive claim below $2000: 3 percent
Although it may seem unfair, insurance companies have the right to increase your auto insurance rates after you make a claim, even if you aren’t at fault in the accident. They determine your premiums based on risk, and statistical data shows that drivers who have recently made a claim are more likely to file another in the future.
Some car insurance providers charge more than others when it comes to premiums for drivers with previous non-at-fault accidents. Progressive charges the most, increasing rates by an average of over 16 percent, while State Farm doesn’t raise prices for not-at-fault drivers.
What Should You Do If You Have Multiple Comprehensive Claims?
If you have multiple comprehensive claims, Insurance Panda recommends that you take these steps to lower your auto insurance premiums:
Limit the Number of Times You File a Claim Each Year
It’s important to be cautious when you’re driving. Whether they’re comprehensive or not, the more claims you file, the more likely an insurance company will raise your premiums or cancel your policy. If you really need to use your comprehensive coverage, you should do the following before you file a claim:
- Get an estimate of the damage to your vehicle from your local body shop.
- Determine if the repair cost is below your deductible payout. If so, you’ll have to pay the deductible first, so you may be better off paying out of your own pocket and skipping the claim.
Avoid Paying for More Coverage Than Necessary
While you don’t want to be underinsured and risk putting yourself in a dire financial situation in the event of an accident, you should also avoid buying more coverage than necessary. Consider the value of your vehicle first. If the value of your vehicle is less than $5000, getting high coverage can cause you to pay more in premiums than your car is worth.
Use In-Car Monitoring to Reduce Your Deductible
Allowing in-vehicle monitoring is another effective way to lower your auto insurance premiums and deductible. More and more insurance companies are offering this service to monitor how their customers drive and reward them with lower insurance rates over time.
Usually, you’ll receive a discount immediately after the monitoring device is installed in your vehicle. After several weeks, your insurer will evaluate your driving habits and further reduce your premiums if you prove to be a safe driver. Some of the factors your auto insurance provider will take into account when monitoring your driving habits include:
- Number of miles you drive per day
- Times of the day you use your car the most
- Your average driving speed
- The way you come to a complete stop
- Frequency of sudden stops
- The way you accelerate
A comprehensive claim will generally increase your auto insurance costs. However, you can save money by becoming a safer driver or choosing an insurance company that doesn’t increase premiums for drivers with previous comprehensive claims.
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