When you go to purchase car insurance, you may be stymied by all the various options presented to you for coverage. Do you need them all? What’s legally required and what makes good common sense? Comprehensive coverage is one of those options that is routinely suggested for drivers and before you decide whether that’s an option you need, take a moment to educate yourself on what it offers and whether you need it. If you happen to be a car insurance customer of USAA Insurance, there are some benefits to adding comprehensive and some possible discounts for doing so.
USAA comprehensive basics
USAA (United Services Automobile Association) is a unique, niche financial services and insurance company dedicated to offering a wide range of financial products, services and discounts to active and retired members of the Armed Services and immediate family. This insurer has a very dedicated following of customers and as such, it routinely ranks high on national surveys for customer satisfaction and retention. If you qualify for membership in USAA, you and your family can build an extensive car insurance coverage plan and if circumstances warrant, you can easily add a comprehensive coverage option.
The first step in making such a determination is to know what comprehensive does. Comprehensive coverage is intended to protect you from the financial consequences of damage done to your car (as opposed to liability coverage that protects you against the financial consequences of damage you cause to other cars and drivers.) Even more specific, comprehensive is designed to cover what are known as non-collision events that can cause damage (or even total loss) to your car.
The typical events that generate a claim under a comprehensive provision include:
- Car fires
- Flood damage
- Severe weather (such as hail, tornadoes and hurricanes)
- Flying or falling objects
- Hitting or being hit by an animal
- Other Acts of God
Comprehensive is often coupled with collision, which covers damage to your car caused by you colliding with another car, a stationary object or in the event of a rollover accident. Most car insurance companies require drivers to have both of these options in place as a package. USAA allows you to select one or the other (or both should you choose), though each of these options will require you to select a separate deductible. (Here too, USAA is very flexible with the deductibles you can choose.)
Do you need this option?
Comprehensive coverage is not legally required of licensed drivers in any state, but there are some contractual situations that can dictate the need to have this option. For example, if you are leasing a vehicle, it’s very likely that the terms and conditions of that lease will require you to have either comprehensive or collision (in most cases, both) in place during the lease period.
Likewise, if you are financing the purchase of a car (especially a newer one) with a car loan, the lender generally requires you to protect its collateral interest in the vehicle by maintaining collision and comprehensive coverage until you own the car outright.
Beyond any contractual obligations you may have to carry comprehensive as a part of your car insurance package, there are a few questions you should ask to determine if you need this added protection:
- Do you live where severe weather is common?
- Does it flood often where you live or commute?
- Do you park your car in a driveway surrounded by trees?
- Do you live in a neighborhood where auto theft or vandalism rates are high?
- Do you routinely commute where wild or large animals may cross the roadways?
- Do you commute through construction zones where flying rocks are common?
There is also a simple calculation you can make to give you a sense of whether comprehensive (or collision for that matter) is a cost-effective add-on. Since the total limit of your protection under either comprehensive or collision cannot exceed the market or actual cash value of your car, add up what the additional premium cost will be to have comprehensive coverage over the expected life of the car, add in the deductible you’ve selected, and if the grand sum total of these amounts exceeds the market value of your car, adding comprehensive may not be a smart financial decision for you.
USAA makes it a little easier
Due to its specialized focus on a target market of customers, USAA is able to extend a number of attractive benefits and premium discounts to its members. Car insurance customers through USAA have numerous premium discounts they can apply for in three general categories:
- Driver Discounts (geared to driver profiles and behavior)
- Vehicle Discounts (geared toward safe cars, new cars and issues like miles driven)
- Membership Discounts (additional savings for USAA members).
One unique discount offered through USAA that may sweeten the pot when you start to determine if you need comprehensive coverage for your car is USAA’s Military Installation discount. With it, you can save 15 percent on the cost of comprehensive coverage if you garage your vehicle on a military base. (This reduction applies to both comprehensive and collision if you are in California. This discount is not available to drivers in Massachusetts or New York.)
If you’re currently a USAA car insurance customer, take some time to consider whether adding a comprehensive coverage option would be a smart way to add more protection against all the odd ways your car can be damaged.
(Note: this article is intended solely for informational purposes and should, in no way, be considered a solicitation or a promotion. The author has no affiliation with USAA or any other insurance provider.)
- License: Royalty Free or iStock source: Image courtesy of USAA Insurance
Jeffrey Davidson is a writer and advisor with more than 25 years of experience working in insurance and financial planning. He currently writes on automobile insurance and related topics for Reply!. You can find his accompanying article on other car insurance products to consider.