00:00Fully comprehensive car insurance can be expensive and may provide coverage you do not actually need,
00:05especially as your vehicle gets older.
00:07The main disadvantages are the higher premium, policy excesses, exclusions,
00:12and the possibility that the insurer pays less than expected after a claim.
00:171. Higher premiums asterisk comprehensive policies generally cost more than third-party only or third-party
00:23fire and theft coverage because they can cover damage to your own vehicle as well as liability and other risks.
00:30The difference varies substantially by driver, vehicle, location, claims history, and insurer,
00:36so there is no universal percentage that applies everywhere.
00:402. Excess slash deductible costs asterisk even with comprehensive coverage.
00:45You may have to pay a compulsory or voluntary excess before the insurer contributes.
00:50A low premium can therefore come with a relatively high out-of-pocket cost when you claim.
00:563. Coverage exclusions asterisk comprehensive does not mean every possible loss is covered.
01:02Policies may exclude normal wear and tear, mechanical breakdown, certain modifications,
01:08driving violations, or damage occurring under specific circumstances.
01:124. Depreciation asterisk after a total loss.
01:15Many policies pay the vehicle's market value rather than what you originally paid.
01:20This can create a significant gap for newer vehicles that depreciate quickly.
01:245. Potentially poor value for older cars asterisk if the vehicle has a low market value.
01:30Paying comprehensive premiums plus an excess may not make financial sense.
01:34This is especially relevant when the annual premium represents a large share of the car's current value.
01:41The answer changes by country and policy wording.
01:44Because insurance regulations, mandatory coverage, claim settlements, and definitions of comprehensive differ.
01:51Before renewing, compare the annual premium and excess with the car's current market value.
01:56Check exclusions and settlement terms and obtain quotes for lower levels of coverage.
02:01If the vehicle is inexpensive and you can comfortably absorb a loss, comprehensive insurance may offer less value.
02:08Finally, remember that everything we discussed today is for educational purposes only and does not constitute financial advice.
02:16Good luck to everyone and see you in the next video.