When you purchase a car insurance policy, one of the decisions you need to make is how much your comprehensive deductible will be if you file a claim. This seems simple enough, but how can you know if you are making the right choice?
The best comprehensive deductible is an amount you can afford to pay if your vehicle is stolen or damaged. Drivers with comprehensive insurance are given the option to choose their deductible, which means you can pick the amount that best suits your needs.
What is a comprehensive deductible?
Deductibles for comprehensive coverage are the portion of a claim you agree to pay out-of-pocket. Most insurance companies offer a wide range of deductibles for comprehensive coverage, from as little as $0 or $50 to as much as $1,000, or possibly more. For example, if you have a $1,000 comprehensive deductible and hit a deer that causes $5,000 in damage to your car, your insurance company would pay $4,000 and you would pay the other $1,000 toward repairs.
When thinking about comprehensive deductibles vs. collision deductibles, the most important thing to remember is that, with most insurance companies, they do not need to be the same. In fact, because the two coverages are so different, it might be a good idea to choose different deductible amounts for each type of coverage, depending on your needs.
For example, comprehensive coverage applies to a number of situations where the cost of repair might be relatively small, like hail damage or broken glass. If you want to make sure you can file a claim for smaller issues through your comprehensive coverage you can choose a $100 comprehensive deductible and set a higher deductible of $500 or more for collision coverage to help keep your insurance rates low.
How to choose your comprehensive deductible
There are several steps involved in choosing your comprehensive deductible, including:
Review your personal finances to determine how much you could afford to pay out-of-pocket if you file a claim
Talk to your insurance agent to find out how different deductible amounts will impact your insurance rates
Consider your risks (do you live in a high crime area, or a place where natural disasters are common, etc.) and think about the likelihood that you will end up filing a claim
Keep in mind that choosing a lower deductible usually causes your insurance rates to go up, while choosing a higher deductible can help lower your rates. Drivers who have $1,000 or more set aside for emergencies might choose a higher deductible to make their insurance more affordable, but drivers who can’t afford to pay very much out-of-pocket should choose a lower deductible, even if it costs a little more on their monthly insurance payment.
Is a $500 comprehensive deductible better than a $1,000 deductible?
A $500 deductible means you will pay $500 out-of-pocket toward the cost of repairing or replacing your car in the event of a comprehensive claim. $500 is a very popular deductible amount because it is low enough that many people could afford to pay that amount in an emergency while being high enough that it helps keep your insurance rates low.
A $1,000 deductible means you will pay $1,000 out-of-pocket toward the cost of repairing or replacing your car in the event of a comprehensive claim. A $1,000 deductible can help keep your insurance rates as low as possible, but the downside to having such a high deductible is that you may have repairs that you cannot file a claim for because they are less than $1,000.
For example, if you have a $750 repair because chipmunks chewed through several wires and hoses in your engine compartment, a $1,000 deductible means that the insurance company won’t pay a dime toward the repairs and you will have to pay the entire amount out-of-pocket.
While common knowledge is that a lower deductible is better, the reality is that the “better” deductible is the one that works best for you.
What is covered under comprehensive coverage?
Comprehensive coverage, which is sometimes called “other than collision” insurance or shortened to “comp coverage,” pays for damage to your car that was not caused by a collision.
Comprehensive insurance is part of a full coverage policy, which is a term for a car insurance policy that includes liability, comprehensive, and collision coverage. Full coverage is called that because it covers damage you cause to other people as well as damage to your own vehicle, but the name is a bit misleading because there is no such thing as an insurance policy that covers every possible issue.
Comprehensive insurance covers damage that is usually out of your control, like damage from falling rocks, storm damage, or even hitting a deer.
Comprehensive coverage pays for claims that are not caused by a collision, including:
Falling objects (rocks, tree limbs, etc.)
Vandalism, fire, riots, etc.
Storm damage (hail, wind, floods, lightning, earthquakes, etc.)
Animal-related damage (hitting a deer, etc.)
Windshield and glass damage
When it comes to glass and windshield damage, insurance companies in some states have coverage options that allow you to avoid paying a deductible when repairing cracked or broken glass. This is often referred to as a zero glass deductible or full glass coverage.