Your car spends a lot of time in motion.
Think about it. You drive to work, go shopping, and rely on your vehicle to get around for countless tasks.
But most cars spend most of their lives at rest. Collision insurance covers your car in motion. But what if your car is spending a lengthy time parked? Is damage from vandalism and other non-navigational incidents covered?
If you only have collision insurance, chances are you have to pay for the repaint on that keying yourself. Comprehensive coverage, however, protects your car while it’s parked. It covers all sorts of risks, including:
- Civil unrest
- Fallen trees
- Hail. And presumably, a plague of locusts. Or a rain of frogs, which, apparently has happened in Calgary
If your car is going to be in storage, or otherwise sitting idle for a length of time, there’s a negotiation you can make with your insurance provider that most people don’t know about: You don’t need collision insurance.
This is an attractive option for convertibles or sports cars that spend the brutal Canadian winter under a tarp, or if you’re going on a months’ long getaway (in which case you should look into buying travel insurance).
Simply cancelling the insurance on a parked car is not a good idea since it can cause a gap in coverage that may affect your rates when you want to reactivate your policy. However, you can temporarily reduce the coverage on a vehicle without being penalized.
Also, make sure you set a date with your provider to restart your collision and liability insurance when you want to roll down the roof again. It’s easy to forget details like that. Without collision and liability insurance, you may find yourself in trouble if something goes wrong, or even if it doesn’t — a routine traffic stop can result in a fine of $5,000 to $25,000 for a first offence, with the amount doubling for every subsequent offence.
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Do You Need Comprehensive Coverage for Your Vehicle?
If your car is leased or financed, the lender typically requires you to have full physical damage coverage including collision and comprehensive coverages until the vehicle is paid off. Also, bear in mind the basic calculus of car insurance: Higher deductibles can mean paying a lower premium.
At some point, comprehensive insurance becomes self-defeating. I had a Pontiac 6000 with 450,000 kilometres on it at one point. The deductible, let alone the annual premium, would have been more than the value of the car.
Different cars depreciate differently. The common belief that a car loses 30% in value as soon as you drive it off the lot is not true. A new vehicle should have comprehensive coverage as part of an overall policy, because trees fall on new cars, too. Without comprehensive insurance, your only benefit is a photo on the front page of the newspaper.
There are many considerations for a comprehensive-only policy, including:
- Will your lender allow it?
- Where are you storing your vehicle? Generally, a garage is safer than a driveway, which is safer than a parking lot.
- What’s your appetite for risk? (In other words, to quote Clint Eastwood, “Do you feel lucky?”)
- What’s the value of the vehicle? You could be paying more in premiums than its actual worth. The Kelley Blue Book is the standard for calculating the replacement value of vehicles. Discuss with your auto insurance provider how the Blue Book value of your vehicle corresponds to your additional premium for comprehensive coverage