All You Need to Know About Comprehensive and Collision Car Insurance Coverage
How Much is Full Coverage Auto Insurance?
If you're thinking about buying a new car, or a gently used one, you're probably wondering what it's going to cost you for full coverage auto insurance. It's a cost that you're going to have to absorb in addition to your car payments, so you want to be sure that you get the best deal. Your premium will be determined by a number of factors.
Full coverage auto insurance includes both collision and comprehensive insurance. Collision car insurance is your most important type of coverage, and in many states, you're required by law to have it. Comprehensive insurance covers you for damage due to occurrences other than collision - fire, vandalism, theft, falling objects, weather, and damage by animals. Comprehensive insurance isn't required by law, but just the same, it's a good idea to have it, especially if the car that you're driving is valuable.
What Does Collision Insurance Cost?
Collision car insurance varies widely depending on where you live, how old you are, how long you're been driving, the make and model of your car, and many other factors. For this reason it can be very difficult determining how much collision insurance will cost. Most estimators suggest that it will be between $40 and $100 per month.
What Does Comprehensive Insurance Cost?
Again this depends on a wide variety of factors, but typically you can expect to spend between $1,100 and $3,000 annually depending on essentially the same factors as for collision car insurance. You also have to consider your deductible, which could be anywhere from $250 to $1,000. If you have a higher deductible, you'll have to pay for more of the damage before your insurance company begins to pay, but you'll be paying a lower premium. If you raise your deductible, you can actually reduce your premiums anywhere from 15% to 30%. Of course, you want to be sure that if you go with a higher deductible, you can be assured of meeting your obligations if you should ever have to submit a claim.
The make and model of your car can also affect what you pay for comprehensive insurance. For example, a vehicle type that has a lot of claims against it will mean that your premiums will be higher. Vehicles that are equipped with anti-theft devices may result in lower premiums.
Read the Fine Print
The first thing you should do when you're considering collision or comprehensive auto insurance (or, for that matter, anything else you might be considering buying), is read the fine print. You'll want to know exactly what's covered, and if there are caps on coverage for things like your GPS system, your satellite radio, or your sound system.
Also, think about where you're likely to be using your car. If you're commonly on very busy streets, or parking in bad neighborhoods, you may find that your rates for full coverage auto insurance will be higher.
Consider Your Car's Value
In the final analysis, the value of your car is going to determine the type of insurance you should carry. If you're driving a beater, you likely don't much care about carrying comprehensive insurance - if something happens to it, you just scrape up a bit of cash and go buy another beater. If your car is only worth a thousand dollars, and your deductible is $500, then the most your insurance company is going to cough up is $500. Given the cost of your premiums, it wouldn't make any sense at all for you to carry comprehensive insurance. Of course on the other hand, if you're driving a brand new Mercedes, you likely do care very much about what happens to your car, and you're going to want to carry significant comprehensive insurance.
The purpose of insurance is to put you back in the same position you were in before the loss or damage occurred. So, if your car is totaled in a collision, or damaged in some other manner, you have to ask yourself if what you've paid into your insurance is likely to be worth what you're likely to get out of it. Given that the cost of full coverage auto insurance can vary so much, you have to do some number crunching before you decide what level of coverage you want to purchase.
What Type of Car Did You Buy?
This is the main factor that's going to determine how much you'll pay for full coverage auto insurance. Faster cars will have higher premiums - this is simply because you're more likely to speed in a fast car, and more likely to have an accident. A convertible will cost you more, because the damage if you have an accident can be so much more significant than if you're driving a hardtop. Family sedans are typically going to cost you a good deal less to insure than "muscle" cars.
What Are the Features?
Your car's features can help you or hurt you when it comes to buying insurance. Anti-lock brakes, airbags, and anti-theft systems will lower your premiums. Features like four-wheel drive, GPS and chrome finishing will cause your full coverage auto insurance rates to go up. This is because certain features are highly desirable to thieves. And when it comes to four-wheel drive, although it can help you out in certain situations, you're usually in that position because you took a risk, and that makes you less desirable to your insurer.
How Old Are You?
Insurance companies prefer drivers who have a clean record and who are experienced. If you're under 25, you'll pay a higher premium because the company considers you to be inexperienced, and therefore at a higher risk for an accident. As you age, the cost of your premiums will go down, unless, of course, you have a poor driving record.
How Old is Your Car?
Older cars break down more often, and that means that they can cost more to repair. It's also harder to find parts, and that raises repair costs. Additionally, older cars don't have the safety features that newer cars have, and that will also increase the cost of your premiums.
Do you drive a diesel? That will affect your premiums, because diesels cost more to repair than gas-powered automobiles. If you drive a muscle car, your premium will be higher because usually, the engine dies sooner than it does in a lower-powered car - your insurer knows that you're going to be using all that extra power. Oh, and you've heard of "gimme a ticket red?" It's not a myth. If you drive a red car, or you have a custom paint job, you're considered to be a higher risk, and your premiums will go up.
Average Insurance Rates
This is very general, but as of 2010 (which was the last year for which figures were available), it was estimated that you could expect to pay $1,544 annually for insurance on a car, $1,419 for a truck, and $1,346 for an SUV for liability insurance. Full coverage auto insurance would be higher. It varies by state - Louisiana topped the chart at $2,510, while Maine came in at a relatively low $902.
Your insurance agent can advise you on the best possible rates for full coverage auto insurance. Keep in mind that rates can range widely from provider to provider, so you'd be well advised to get several quotes before you commit to an insurance company.