Written by Tim Marsh
Comprehensive insurance is a must if you want coverage for your car or for damage to other people’s property. The compulsory insurance that you have does not provide coverage for either of these things – which can leave you with a significant financial burden if you are involved in any kind of car accident.
The good news is that you can get a comprehensive insurance policy – and there are 6 questions that you should ask when you shop a policy.
What kind of policy will I get?
When you take a look at the different insurance policies, take a good look at what kind of coverage you can get for comprehensive. This means assigning a dollar value to how much you get per accident to cover the damages to your car as well as any property damage that does not belong to you.
Market value versus agreed value – what’s the difference?
The market value is what your car is currently worth on the market. This has nothing to do with how much you paid for your car or how much you owe on your car. It is an arbitrary number that the market establishes based upon the year and make/model of the car. The problem that you may encounter is when a manufacturer changes model names, leaving yours obsolete. Your car may end up with a lower market value, which means you won’t be able to get the amount of money you deserve.
The agreed value is the amount that you and the insurance provider determine is fair based upon such factors as a manufacturer changing the model name. If you ask about this when you shop for comprehensive car insurance, you can protect yourself further. Mitigate the terms to avoid assuming risk.
Will I get new or old part replacement?
This is a big issue with insurance providers all around the country. Many companies want you to settle for a used part when you get your car repaired in order to reduce the cost of the repair on their end. The problem with this is that you had a new part in your car, although it had been used over time. Find out what the insurance company covers. Whenever possible, you want new part replacement when your car is in need of a repair following an accident.
Can I hire a rented vehicle?
Before you purchase comprehensive insurance, find out if you will be able to hire a rented vehicle as part of your insurance policy. In the event you are in a car accident that leaves your car undriveable until repairs are made, you need reliable transportation. The insurance company should allot a certain amount of money per day that you can put toward hiring a rental vehicle.
The dollar amount that you are given per day will vary by insurance providers. Find out what the dollar amount is (if any) before you choose a new or used car warranty. If you aren’t covered for car hire, then you would have to rely on public transportation or paying for the car hire out of your own pocket.
Would I get reimbursed for my car?
If you were to to have a significant accident to your car, the easiest thing may be to have your car reimbursed in its entirety so that you can go out and buy a new car. This isn’t always provided. In many instances, you will get market or agreed value. However, if your car is new – three years or newer – then you may be able to get full reimbursement. This is something that you will need to check with the insurance provider on to make sure you understand what is and isn’t covered.
Comprehensive insurance can provide you with a lot of extra financial coverage beyond what is compulsory. Even still, you will need to ask these 6 questions to avoid any surprises in the event that you have to file a claim after being involved in some kind of car accident. This will be the only way to get the best policy for your money.