Comprehensive insurance is a type of insurance that covers damages caused on your car because of any factor other than collision.
It is meant to cover damage to your car that is not covered under the collision insurance policy. Here’s a little more about Comprehensive insurance.
Table of contents
What Is Comprehensive Insurance?
Comprehensive insurance is a type of car insurance that covers damage to your vehicle caused by factors other than a collision. This insurance will cover your vehicle if it is destroyed by a tornado, dented by a deer, vandalized, etc.
Comprehensive, collision, and liability insurance are the three components of an automobile insurance policy. In most states, the law requires drivers to carry liability insurance, but collision and comprehensive insurance are optional if someone owns a vehicle outright. If a person has financed the vehicle, the auto loan company might require comprehensive insurance.
Do I Need Comprehensive Coverage?
Comprehensive insurance is not under state law. However, if you lease or finance your vehicle, your lender may require that you purchase a comprehensive policy until the end of your lease or until your vehicle is paid off.
Even if you don’t want to purchase comprehensive car insurance, you can add it to your liability car insurance policy. To determine if a comprehensive policy is a good idea for you, start by calculating what your car is worth and subtracting the amount of your deductible — this is the most value you can expect to get from your policy should the worst occur. Compare this number with the cost of your payments.
It’s typically recommended that drivers maintain full coverage car insurance. This means protecting yourself with liability insurance, collision insurance, comprehensive insurance, and personal injury protection. Some drivers may also choose to hold uninsured motorist coverage.
What Comprehensive Insurance Covers
Here’s an outline of what comprehensive insurance covers:
- Contact with animals, such as hitting a deer
- Natural disasters, including earthquakes, floods, and hurricanes
- Fire
- Riots and vandalism
- Vehicle theft, or theft of certain parts of the vehicle
- Broken windshields
- Fallen objects, including branches, rocks, or hail
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What Doesn’t Comprehensive Insurance Cover?
Comprehensive policies do not cover damage to another person’s property, medical expenses, or the value of items stolen from your car.
Comprehensive insurance does not cover damage that is covered by collision insurance. This includes:
- Collision with another vehicle
- Collision with a road hazard, tree or guardrail
- Damage resulting from your car being flipped
Comprehensive Insurance vs. Collision Insurance
If you’re buying a new car, whether you finance it or pay cash, it may make sense to have comprehensive car insurance. Comprehensive coverage can protect you against minor and major damages caused by events beyond your control, regardless of any accident coverage you may have.
Where you live can also play a part in deciding when to have comprehensive coverage. If a person lives in a rural area where collisions with animals are common or in a stormy area that often gets hail, they might want to purchase comprehensive insurance. The same is true if a person lives in a high-crime part of town where break-ins and theft occur regularly.
Collision insurance covers you if you have a single-car rollover, collide with another vehicle, or collide with an object. It excludes break-ins, thefts, and weather-related damage. If you lease a car, you must purchase collision insurance. When you get into an accident, collision insurance comes in handy to help pay for your vehicle’s repair, and it also covers damage to your car caused by potholes in the road.
Neither insurance will cover medical bills from an accident or damage to another person’s vehicle if you are in an accident.
When purchasing comprehensive coverage or any other type of car insurance, compare the best car insurance companies to find the most affordable rates.
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Cost of Comprehensive Insurance
Comprehensive covers damage to your car caused by accidents and disasters beyond car accidents. According to the Insurance Information Institute, the average comprehensive cost is approximately $134 per year. However, Insurance.com reports that figure is $192, depending on your state. Either way, you are looking at under $200 a month just for comprehensive insurance for your car.
Collision and comprehensive insurance each have their deductibles (liability insurance has no deductible), so a driver can choose different deductibles based on perceived risk levels in each of these areas. For example, if someone thinks they’re not likely to file a comprehensive claim, but they don’t want to forego comprehensive insurance altogether, they could choose a relatively high $1,000 deductible to lower the premiums. The higher a vehicle’s cash value, the more expensive a comprehensive insurance policy will be.
Understanding how insurance companies assign risk classes to drivers can help you estimate how much you might pay for comprehensive coverage. The amount you pay for car insurance, including comprehensive coverage, can be determined by where you live, your driving record, and your coverage.
For example, the most expensive state to insure a car is Louisiana, where the average driver spends $1,545 per year on full car insurance. On the other hand, North Dakota drivers pay an average of $686 per year to insure their vehicles.
Advantages and Disadvantages of Comprehensive Insurance
Comprehensive auto insurance protects you financially from theft, natural accidents, and weather-related damage. This insurance means you won’t pay out of pocket if a tree falls on your car or a thief takes off with it at night.
There are downsides. Comprehensive insurance won’t pay for the damage if you are in an accident. And comprehensive insurance may be expensive if you purchase it and collision insurance. If your vehicle is older and paid off, you could save money by not purchasing comprehensive coverage, especially if theft and weather-related events are not concerns where you live.
Pros
- Comprehensive coverage protects you against theft, weather-related events, and other major things beyond your control.
- Comprehensive coverage often covers “unforeseen events” like break-ins or broken windshield wipers due to hail.
- If you own a new car and live in a high-crime area, comprehensive insurance will cover the damages caused by any break-ins or thefts.
Cons
- Comprehensive insurance doesn’t damage caused by a collision.
- It may not be necessary to have for an older car with high mileage.
- Comprehensive insurance covers nothing personal stolen from your car.
- It doesn’t cover damage due to pot holes.
Example of Comprehensive Insurance
Comprehensive insurance works similar to any other type of car insurance if you need to file a claim. But if you’ve never had to do so, here’s an example of how comprehensive insurance works if a driver files a claim for vehicle damages.
Say someone drives a Toyota worth $10,000, with a $1,000 comprehensive deductible. If a tornado destroys the car, the driver will receive $9,000 from the insurance company. If they don’t have comprehensive coverage and a tornado destroys the vehicle, the collision and liability portions of the policy won’t cover the damage. The driver will be responsible for the entire $10,000 loss. A driver might have to get a loan to purchase a replacement vehicle or settle for something less expensive if they don’t have $10,000 to spend on an equivalent replacement.
Seeing an example of comprehensive insurance in action can offer some perspective on how valuable it can be if your car is damaged. If you’re leaning more toward the “when to drop comprehensive insurance” side, knowing how much damages may cost you to repair out of pocket is helpful.
Final Thoughts
If you’ve paid for your vehicle in full, can’t afford comprehensive insurance, or own an older automobile that doesn’t have much value, you might feel that you’re at low risk of non-collision damage. In this case, you might choose to skip comprehensive insurance. Or, if you prefer to self-insure, then you might also decide not to purchase comprehensive insurance.
Forgoing comprehensive coverage means you could get a steep repair bill if your car is damaged. So weigh the costs of any potential repairs against what you might pay in terms of premiums to maintain comprehensive coverage.
References
- What Is Comprehensive Insurance, and What Does It Cover?
- Comprehensive Insurance
- What is comprehensive insurance, and do you need it?
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