Posted August 24th, 2011 & filed under Articles .
When asking how much does fully comprehensive auto insurance cost, it is important to first qualify the question by asking some things about your age, which state you live in, and what kind of car you drive. Without knowing the answer to these questions, it is impossible to say exactly how much does comprehensive insurance cost, but we can give you some basic ideas.
For the purpose of this article we will be using insurance in New York as our state of choice, and be saying that we are a male driver of around age 35. In order to get these figures, we used the New York State Insurance website’s Sample Premiums Tool. which lists over 30 insurance companies and the average premiums they charge for various different services.
What is Fully Comprehensive Auto Insurance?
At this point it is worth making a distinction between Comprehensive Insurance and Collision Insurance, or a Collision Damages Waiver
Comprehensive Insurance insures not only damage done by you to another party (like basic third-party insurance) but also damage done to your own vehicle. This comes in especially handy if you caused the accident, or if you are hit by an uninsured driver.
A Collision Damages Waiver applies only to rented cars, and is usually an expensive but advisable extra. Causing damage to a rental car can be very expensive!
So How Much Does it Cost?
The exact cost of fully comprehensive insurance varies greatly from one company to another, and so do cover levels. Each company has “minimum coverage” levels, some of which are higher than the state’s minimum levels. Assigned Risk Plan, for example, offers a very high level of cover as a minimum, and charges over $2,000 for plain third-party insurance. Adding a fully comprehensive option to that increases the cost by nearly $800.
That’s probably not insurance we’re going to be buying today. We’re looking more at companies like GEICO. GEICO’s price for minimum cover is $1,243 per annum, which seems a little bit steep, but their cover is good and they have a good reputation for treating customers
What makes their offer attractive, however, is that you can upgrade to fully comprehensive auto insurance for only $207, making your total premium $1,450. It is also advisable to add Property Damage cover up to $50,000 at $27 per annum, and No-Fault cover up to $100,000, which costs $38 a year.
This brings your total premium up to $1,515 per year, or $126 per month. Compare that to their most basic product, at $103 per month, and you can see that you’re only paying the price of a few beers and a burger every month to make sure you’re fully covered.
It may seem like a big add on to pay for the cost of fully comprehensive auto insurance, but it could save you a great deal of financial trouble if you cause a large accident, or are hit by an under-insured driver.
But Is It Worth It?
One question people often overlook is whether or not it is financially viable to buy this type of insurance. On the face of it, people will either take the cautious approach, and figure they’d rather have it and not need it than need it and not have it, or they decide that they’d rather take the risk. The problem here is that it is unlikely that either person has properly calculated the actual financial risk.
In order to do that, you have to take a look at the value of your car. In a year and a half, you will probably pay around $500 in extra premiums to cover your car in case anything goes wrong. Since you also have a deductible, you are going to be out a few hundred dollars either way, if you do need your insurance.
Let’s say your deductible is $300, and your very well-used car is worth only $700. If your car is totaled, you’ll have to pay $300, but your insurance company will pay the other $400 to have it replaced. However, if you’ve already paid $500 in insurance premiums, then your insurance company has still scored, and you’ve been left financially worse-off than you would have been had you simply had to replace the car.