Is Comprehensive Car Insurance Worth the Money?

Tips to Use When You Can't Afford Car Insurance

When you buy or lease a car, insurance is a legal requirement to go along with it in most states around the US. Car insurance ensures that if your car requires repairs, or if you are involved in a crash, the car can be repaired or replaced. There’s no getting around it: you need car insurance to be within the law when you drive. 

The type of insurance you buy, however, is completely up to you. Investing in insurance is a requirement, but comprehensive insurance is not. In this article, we’ll weigh up the pros and cons of comprehensive car insurance vs third party, fire, and theft insurance. We’ll take a look at the financial aspects of this decision, as well as the personal ones. 

What is comprehensive car insurance?

Comprehensive car insurance is a popular choice because it covers all forms of damage and theft to your car. Not only does comprehensive car insurance cover damage to your car, but it can also cover injury to the person or persons if they are hurt during a crash.

This means that not only your car is covered, but you’re covered too. Medical bills, recovery, and damage to other drivers’ cars can all be covered in comprehensive insurance policies. Essentially, you don’t have to worry – whatever it is, it’s covered.

The average cost of comprehensive car insurance is around $1,592 per year. This, of course, depends on the driver’s credit rating and other factors, such as previous claims. Working out at around $133 per month, comprehensive car insurance isn’t cheap. This is the main downside of investing in comprehensive car insurance: it won’t be cheap!

What is “third party” car insurance?

Third party insurance is a cheaper, but less comprehensive, version of car insurance that you can access in most parts of the US and all of the UK. Third party insurance covers claims made by others but doesn’t cover claims made by you.

Need an example? Let’s get into it. If you have third party car insurance, and an uninsured driver slams into you on the freeway, you aren’t liable for damages against you or your car. If a third party causes the damage (including theft or fire on most policies), you aren’t required to pay for that damage or replacement.

However, there’s a catch. Under third party insurance, if you cause damage to your own vehicle, you are liable to cover the cost of the damages. For example, if you reversed your car into your driveway wall, or caused an accident on the road, you would have to pay out of pocket. These are unlikely scenarios, but ones that cost huge amounts to put right if they do occur.

There are also different strains of third party vehicle insurance, including bodily injury and property damage insurance. This means that you may pay more to insure both a person and the vehicle, as opposed to one or the other.

How much does third party car insurance cost? It is difficult to say; there are very few figures detailing these costs online. However, it is safe to say that third party car insurance won’t set you back hundreds of dollars per month, particularly if you don’t have any DUIs or a low credit score.

Should I get comprehensive or third party car insurance?

Car insurance is not just about momentary spending; it’s also about thinking long term. Although there is only around a 0.6% chance of you having a car accident at some point in your life, these considerations are still important for your financial and physical safety. 

78% of drivers in the US buy full coverage car insurance. This is, simply, because it is the safer option long term. Although comprehensive cover will cost you more in the long run, you will save thousands of dollars in payouts if you are involved in an accident. When it comes to calculating your car insurance, you need to factor risk into the balance, not just money.

To sum up…

While it is important to search for bargains and lower your financial outgoings over your lifetime, lowering your personal risk is equally important. The financial risk of a huge payout after a car accident is much more serious than the risk posed by slightly higher monthly payments for comprehensive car insurance. Full coverage car insurance is definitely worth it, even if the price tag seems high for what it is.

Have you been involved in a car accident? Contact an auto accident law firm today to ensure you are getting the help you need.

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