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What Is Comprehensive Insurance & When Do You Need It?

There are four main types of car insurance that you can have. Comprehensive is the top of the line that covers most accidents that may happen. Compulsory Third-Party insurance is the lowest amount of coverage that you can legally have. Before we go deeper into comprehensive insurance, we need to cover the other three types first.

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Compulsory Third Party Insurance

The rock bottom policy that is required by law is the Compulsory Third-Party policy that is usually added to the registration of your car, guaranteeing that you have the type of policy that covers any third-party person or persons that may be injured or killed in an accident. The only state that does not include this coverage is New South Wales so you will have to purchase this policy, which is required by law, from an insurance carrier of your choosing. 

Third-Party Property Insurance

The next step up in insurance is the Third-Party Property insurance policy that covers any damage that is done to the other people in the accident. It covers expenses to repair or replace their car, and the cost of replacing any property inside of the vehicle that may have a high value. It does not cover any of your repairs or replacements.

Third Party Property, Fire and Theft Insurance

Third-Party Property, Fire and Theft is the next version for which you can opt. This policy will cover the damage done to the other people’s property that was involved in the accident. It does not cover your car if in an accident, but it will cover your repairs or replacement in the case of fire or theft.

Comprehensive Insurance

Now we get to the reason that you are reading this article, and that is what does comprehensive car insurance cover, and when do you need it? Comprehensive insurance will cover the costs of the other persons property, as well as yours. It also covers costs to repair your car if it is stolen, or damaged, in any type of natural disaster. This is whether you are at fault, or not. 

Comprehensive Insurance: Needed or Not

Now, for you to know when you need it, and when you do not, you will need to sit down and analyze your specific situation. You now know what comprehensive insurance is, so compare that coverage to what you have. Remember that even though you may think that you should always have top of the line insurance, there are instances when it is not worth the money.

Let us say that you have a classic car that is worth more than most new cars coming off the production lines. A car that is hard to find parts for and may be impossible to replace. In this instance you would want to have the best coverage possible, so a comprehensive policy designed for classic cars would be the way you want to go with your auto insurance.

On the other hand, if you own a car that is simply meant to get you from point A to point B you may not want to spend the extra money. Cars like this are usually not worth as much as the tires that are on them, so you could easily replace it if an accident should ever occur. In this case you would only want to carry the minimum amounts set by the laws in your area. 

Final Thoughts

You should get the point by now. If the car is expensive to buy, hard to find cheap parts for, or one that is being financed, you would want to have comprehensive coverage. If you are going through a lender to carry an auto loan they will require it, but even if not, you should have it. It is better to have it and not need it, then to not have it and need it. 

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