If you have been looking up insurance and what types of coverages you want, you would have likely heard about comprehensive coverage and liability. However, you probably have noticed that there is a great price difference between the two policies.
You are likely curious as to why comprehensive is more than liability. I did some digging, and here is what I learned!
Why Is Comprehensive More Than Liability?
Comprehensive costs more than liability because comprehensive coverage covers various forms of damage to your car, such as theft and flooding. However, liability only covers the damages that you caused to other drivers, but not damages caused to you or your property. Moreover, comprehensive insurance costs go up depending on age, car, etc.
Do you want to find out more reasons why comprehensive coverage is more expensive than liability? I made a list of reasons below, so keep reading!
1. Does Not Matter Who Is At Fault
A major reason why comprehensive coverage costs more than liability is that it does not matter who was at fault for the accident.
If you have a liability policy, liability will only cover the damages done to another person or their property when you are at fault.
On the other hand, comprehensive damage will cover your expenses to your car whether you or another person caused the accident.
However, liability policies will not pay for any damage that has happened to your own property or car if you are in an accident, especially if you caused it.
2. Also Contains Liability
Generally, this will depend on the insurance company, but some comprehensive coverage policies will cover some liability costs as well.
For instance, if you purchase bodily injury liability by itself, you will only get that policy.
On the other hand, some comprehensive coverage policies will also cover bodily injury liability, which will add to the overall cost.
If your comprehensive policy also covers bodily injury liability, it will also often include property damage liability.
Instead of buying separate policies to cover liability, you would have multiple policies in one coverage.
Therefore, you would get more policies when you purchase a comprehensive policy compared to liability alone.
3. Offers Coverage Other Than Collision
Generally, comprehensive coverage will cover damage to your car that does not include collision since collision coverage is a separate policy.
Comprehensive coverage often offers you insurance in specific situations where your car was damaged.
Some examples of what comprehensive coverage will cover are theft, fire, hail, floods, glass breakage, and hitting an animal.
You would not get this sort of coverage from liability since liability will only cover damage that you caused to a different car.
4. Your Car’s Market Value
Normally, most insurance coverage rates are decided are based on multiple factors, especially your car’s market value.
Usually, trying to get comprehensive insurance for a brand-new car is more expensive because the car will have a high market value.
On the other hand, paying for comprehensive insurance for a second-hand car will not cost you as much because the car will have a lower value.
Moreover, having an older car can make comprehensive insurance more affordable because the car’s market value will depreciate over time.
5. Type Of Car
Other than how new or old your car is, another way that comprehensive car insurance becomes more expensive than liability is the type of car you drive.
For instance, you will normally face a higher rate for comprehensive insurance on a sports car.
This is because most insurers will see sports cars as high-risk cars that are more likely to get into accidents since they are fast cars.
On the other hand, comprehensive insurance costs for a sedan will be cheaper since they are family cars that often drive slower.
Moreover, more expensive and risky cars like sports cars have more expensive car parts and costs for repairs, which contributes to the comprehensive insurance cost.
Therefore, getting comprehensive insurance for a cheaper car like a sedan would be more affordable.
6. Likelihood Of Claims
Generally, another huge reason why your comprehensive insurance would be more than liability is the likelihood that you will make a claim from your comprehensive coverage.
Usually, insurance companies factor in how much they would need to profit based on how often you may need to take out a claim.
For instance, if flooding is very common in your area, your comprehensive insurance rate may be more expensive because your car is more likely to be damaged by flooding.
7. Accompanies Collision Insurance
A common reason why comprehensive insurance coverage looks like it costs more than liability is that you may have collision coverage with your comprehensive coverage.
Depending on how you financed your car, you may be required to get collision coverage with your comprehensive coverage, making yoru comprehensive insurance look more expensive.
For instance, most people who took a lease out on a car or are currently paying for their car in installments will likely need to get comprehensive and collision coverage.
8. Lower Deductibles
Generally, most insurance policies will be more expensive when you choose a low deductible for the policy.
Deductibles refer to how much you are willing to pay in case of an accident before you use your insurance.
Therefore, choosing a lower deductible will give you more expensive comprehensive insurance costs while a higher deductible will make your rate cheaper.
9. Age Of Driver
Usually, insurers will make your comprehensive insurance more expensive based on you as a client, especially based on your age.
Normally, teenage and senior drivers have to pay more for comprehensive insurance because they are more likely to get into accidents.
To know more, you can also read our posts on why use a pintle hitch, why car is leaking water but not overheating, and Nissan Altima won’t start.
Comprehensive insurance usually costs more than liability because comprehensive offers more benefits than liability.
Generally, comprehensive insurance covers the costs of various damages to your car whereas liability only covers the damage that other drivers experienced if you were at fault for the accident.