OAI: Surge of Weather-Related Auto Insurance Claims Shows Value of Optional Coverages

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Drivers may want to consider the benefits of purchasing comprehensive coverage, says Online Auto Insurance.

The aftermath of bad weather that hit parts of the South and the Midwest last week is highlighting the usefulness of some optional car insurance coverages, according to OnlineAutoInsurance.com.

Although most drivers immediately think of damage from car accidents when they think of what is covered by their car policies, there is a handful of other coverage types that protect a wide assortment of other damages.

That's evidenced by the fact that State Farm reported that, as of Saturday, it had received 2,700 claims on auto policies issued to drivers in Kansas, Indiana, Alabama and North Carolina after residents there experienced a spate of destructive tornadoes and hail. That's nearly half of the total claims the insurer reported experiencing as a result of the storms. (Another 3,600 claims were filed on residents' homeowners insurance policies.)

The thing is that not all motorists in the region are able to get compensation from their insurers for damages from the storms.

That's because comprehensive coverage is the only type of policy that will protect against weather-related damages, and drivers are not required to purchase that type of coverage, although it comes with relatively cheap auto insurance rates and covers a wide assortment of damages.

According to data from the National Association of Insurance Commissioners (NAIC), about a quarter of the policies written by insurers in 2009 included comprehensive coverage, meaning approximately 1 in 4 drivers would have to pay for things like hail damage out of pocket.

Comprehensive is a relatively low-cost coverage option, although price will vary depending on the age and type of the vehicle, deductible and certain policyholder-specific factors.

NAIC data show that, in 2009, the average premium for the comprehensive portion of a policy was just over $130.

If the price is just out of reach for some consumers, they may want to consider raising the deductible, although this means that the policyholder would have to pay more out of pocket in the event of a claim.

According to the Insurance Information Institute, going from a $200 to a $500 deductible can cut costs for the coverage by 15 to 30 percent.

Source: http://publications.usa.gov/USAPubs.php?PubID=3187

For more on this and other coverage issues, head to http://www.onlineautoinsurance.com/cheap/ to get access to informative resource pages and a helpful rate-comparison generator.

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Benjamin Zitney
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