Comprehensive car insurance
Comprehensive insurance is a type of coverage that helps to pay for the replacement or repair of your vehicle in the event that it is stolen or damaged in an incident that is not a collision. Comprehensive coverage, sometimes referred to as "other than collision" coverage, typically covers damage from fire, vandalism, or falling objects (such as a tree or hail). If you are financing or leasing your car, chances are that your lender requires you to have comprehensive coverage. However, if you own your vehicle outright, this type of coverage is optional on your car insurance policy.
If you're in the market for auto insurance, you should definitely consider getting comprehensive coverage. Here's what you need to know about this type of insurance: what it covers, how it differs from collision coverage, and how limits and deductibles work. Let's go!
What does comprehensive cover?
Comprehensive coverage protects your vehicle from damages in a variety of situations. It's sometimes called "other than collision" coverage because it covers damages that collision coverage doesn't. This may include (but is not limited to) things like
- Fire, vandalism, and explosions
- Windshield and glass breakage
- Storms, floods, hail, lightning, and earthquakes
- Hitting an animal
- Theft
- Falling trees, limbs and other objects
What's comprehensive insurance doesn't cover?
Although comprehensive coverage includes a lot, it does not cover everything. For example, it will not cover damages caused by hitting another vehicle or object. These incidents are covered under collision coverage. Comprehensive coverage also will not cover normal wear and tear on your vehicle. Normal wear and tear include items that normally need to be replaced over time from usage such as
- Brakes
- Windshield wipers
- Belts and hoses
- Tires
- The other person's vehicle sustained damage from the collision
- Medical expenses for you or your passenger after an accident
- Damage to your car from a collision
What is a comprehensive deductible?
When you agree to a comprehensive deductible, you're essentially agreeing to pay a certain amount out-of-pocket before your insurance company will start covering any damages. This is an important decision to make because it will affect how much financial risk, you're willing to take on if you're ever in an accident. In general, the more risk you're willing to take (higher deductible), the lower your insurance cost would be. Conversely, the less risk you're willing to take (lower deductible), the higher your insurance costs would be.
Comprehensive coverage limits and deductibles
When you purchase comprehensive coverage, you can choose your own deductible amount. For example, if you choose a $400 deductible and your car is later damaged in a covered claim, you would only have to pay $400 out of pocket. Your insurance would cover the remaining $1,000. So, by choosing a higher deductible, you can save money on your monthly premiums.
Your comprehensive coverage has a limit, which is the most your policy will pay for a covered claim. The limit is usually the actual cash value of your vehicle.
Your insurance company should reimburse you for the full value of your stolen car, minus your deductible. If you want to replace your stolen vehicle with a newer make and model, you should not have to use any of your own money to do so. The reimbursement from your insurer should be enough.
It's important to remember that your policy's comprehensive deductible and limit are separate from the collision deductible and limit.
Choosing a comprehensive coverage deductible
Your insurer offers comprehensive deductibles in set increments, such as $500, $1,000, or $1,500. Generally, choosing a higher comprehensive deductible will lower your premiums, which can save you money upfront. However, you may have to pay more out of pocket toward a covered claim. Likewise, choosing a lower comprehensive deductible means the amount you pay for coverage will increase. Your agent can help you determine what deductibles and limits fit your needs.
The difference between collision and comprehensive insurance
If you get into a car accident, collision coverage will help pay to repair your car. This type of coverage comes into play when your car is damaged in a collision with another vehicle or object, such as a fence. Having collision coverage can give you peace of mind knowing that you'll be covered financially if you are in an accident.
Comprehensive coverage vs. collision coverage
If you're worried about what will happen to your car in the event of an accident, then comprehensive coverage and collision coverage can provide some peace of mind. Both types of coverage come with a deductible that you'll need to pay before the insurance kicks in, but they differ in the situations they cover. So be sure to do your research and choose the right coverage for your needs.
There are three instances when comprehensive coverage applies:
- If your car hits a deer
- If someone steals your vehicle
- If your car is damaged by a hailstorm
Collision insurance covers damage to your car when it hits, or is hit by, another object. This includes other vehicles, buildings, trees, animals, and fences.
When it is appropriate to add comprehensive coverage to my policy?
Adding comprehensive coverage to your auto, motorcycle, RV, or boat insurance policy is a smart way to protect your investment. In many cases, you can add this coverage at any time. You may also be able to purchase comprehensive coverage for snowmobiles, golf carts, ATVs, and other types of vehicles.
Why should you add comprehensive coverage to your policy?
If you're involved in an accident, comprehensive coverage can help pay for repairs, regardless of who is at fault. It also helps to cover your deductible, so you're not stuck footing the entire bill on your own. Most lienholders require comprehensive coverage along with collision coverage, in order to protect their investment in the vehicle.
Is comprehensive insurance the same as full coverage?
Comprehensive insurance is a vital form of coverage that protects your vehicle from non-collision-related damage. "Full car coverage" is an ambiguous term often used to refer to both comprehensive and collision coverage, as well as any other coverage your state mandates. Most states require liability insurance, while comprehensive insurance is optional.
Is comprehensive insurance required?
Although comprehensive coverage is not required by law, most lenders will require it if you are leasing or financing your vehicle.
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