There are two main things you want to protect yourself from when you buy car insurance: accidents and theft. A recent report from the National Insurance Crime Bureau (NICB) highlights the latter issue: theft, which is covered only by comprehensive coverage. Below we will look at how a vehicle’s theft record could affect the cost of covering it, and whether comprehensive coverage is definitely worth having for all cars.
A recent report released from the NICB details the 10 most frequently stolen vehicles in the United States for 2011, with the ’94 Accord topping the list. You can find the full list at the bottom of the article to see how your car stacks up. According to the NICB, FBI crime statistics show 2011 is continuing a recent trend in theft decline, down 3.3 percent from 2010. In fact, the number of thefts is the lowest it has been since 1967.
Since this coverage type is not required by law, a natural question for many people becomes, “Is it worth it to have comprehensive coverage?”
According to Jonathan Hoffman of The Hoffman Agency in Los Angeles—Hoffman has been in the car insurance business for over 25 years—the replacement value of your car and your financial situation comes into play with this issue.
Hoffman says if a car is not worth more than $2,000 to $3,000, it may not be worth having comprehensive coverage. Why? Because of two things: the cost of coverage, which can be from $500 to $600 a year for a car of that value, and your deductible, which is around the same. Hoffman says you should add those two together and figure out what percentage of that equals your payback. It could be a negative sale, which does not make it worth your while.
Any car worth between $3,500 and $5,000 is questionable on comprehensive coverage for those same reasons, he says. But if you have a car worth around $5,000 to $9,000, then the return on your money is much greater and it makes more sense to have comprehensive coverage.
He cautions, however, that a vehicle’s value is not the only thing to take into consideration when deciding on comprehensive coverage.
“If you own a car free and clear and have no money in the bank and your car is everything to you, then that $50 or $60 dollars a month in coverage is worth it,” he says.
If, however, you have money in the bank to buy a new car, and your car’s value is around $5,000, then you start deciding if comprehensive coverage is something that makes sense for your situation.
So does a car’s vehicle theft rate have anything to do with the cost of your comprehensive vehicle coverage? Yes, but it’s also affected by a host of other factors, and the auto insurance quotes you get for comprehensive coverage will be chiefly influenced by the replacement cost for your car.
In addition to the year, make and model of your car, theft rates, and where you live, other factors like replacement parts and labor are factored into your comprehensive coverage price. If you have a $5,000 dollar Audi and a $5,000 Honda, the Audi is going to have a higher cost for comprehensive coverage because of higher parts and labor costs for the Audi.
There are things to do to safeguard your car from theft, including locking it up in a safe place, and having LoJack and/or an alarm put on it.
“You want to protect your investment,” Hoffman says.
1. 1994 Honda Accord
2. 1998 Honda Civic
3. 2006 Ford Pickup (Full Size)
4. 1991 Toyota Camry
5. 2000 Dodge Caravan
6. 1994 Acura Integra
7. 1999 Chevrolet Pickup (Full Size)
8. 2004 Dodge Pickup (Full Size)
9. 2002 Ford Explorer
10. 1994 Nissan Sentra
