What You Should Know about Comprehensive Auto Insurance

Everyone is required to have auto insurance, but not everyone understands the details of their policy. Between bodily injury, collision coverage, and comprehensive auto insurance in Nashville, TN, there is a lot to remember. Below you can find out what your comprehensive coverage consists of and what it has to do with your lender.

What It Covers

Comprehensive is often referred to ‘other than collision’ coverage. That’s because it covers physical damage to your car that wasn’t caused by a car accident. For example, if your car was damaged or destroyed due to fire, natural disaster, theft, vandalism, or contact with animals, your comprehensive coverage would kick in. in part, the rate might be determined by your address. For example, someone who lives in a shady part of town might be at a higher risk of vandalism or theft of their car.

Lenders Require It

If you took out a loan to purchase your vehicle, you can’t wave comprehensive coverage. If something damaged your car beyond repair, you would stop making payments on it. While your insurance can repossess the car, they will have nothing of value to recoup their loan in that situation. That’s where insurance comes in.

One problem that people run into is that the loan balance is sometimes higher than the current value of the car. Your comprehensive coverage only insures your car up to its current value. If your car was totaled, your insurance would pay its value before the accident, but you may still owe your lender more. In that case, you’d need gap insurance to cover the difference for you. Gap insurance is most beneficial in the first 2 years of the loan. After that the loan balance should be more in line with the value of the car.

Your Deductible

Before your comprehensive coverage pays for damages, you must meet your deductible. This may be the same as your deductible for collision damage, but you should check your policy to find out. If damages are less than your deductible, you must pay for the repairs out of your own pocket. If the damage is minor, you could choose not to get it repaired.

Now that you know what your comprehensive auto insurance in Nashville, TN, covers, you can shop around for the best value. However, if you’re a great driver, lowering your deductible probably won’t affect your premiums much, but paying for 6 months at a time might.