What Is Comprehensive Coverage for Auto Insurance?
Many people wrongly assume that having comprehensive insurance means you are covered for "everything" after you have an accident. Comprehensive insurance covers you if your vehicle is stolen or vandalized or if it is damaged as a result of anything other than a collision.
Other types of car accidents, called "perils", covered by comprehensive insurance include storms and other natural disasters, hitting an animal, fire, riots, broken windows and windshields as well as damage caused by falling objects.
What is comprehensive insurance, other than the strange cousin of collision insurance? Clearly, collision insurance covers a car wreck of some sort, but what's the real definition of comprehensive insurance when the word "comprehensive" cannot possibly mean that it covers everything (and it doesn't)?
In this article, we will aim to clarify what comprehensive auto insurance actually covers while differentiating it from collision auto insurance, another very important coverage that is often bought together in a bundle with comprehensive insurance.
What Does Comprehensive Car Insurance Cover?
Comprehensive auto insurance is not required. It is an optional coverage designed to protect you against damage that is not defined as a collision with another car or object. The following are some events in which your car will be covered if you have comprehensive car insurance:
- Falling object
- Hitting wildlife
- Natural disasters (hail, flood)
Does Comprehensive Auto Insurance Cover Everything But Collisions?
No, not everything is covered under comprehensive coverage. The following are instances comprehensive insurance does not cover:
- Roadside assistance (towing)
- Tire change
- Gas, oil and water delivery
- Battery services
- Lockout services
- Rental reimbursement
- Personal property
Information on Deductibles with Comprehensive Coverage:
In some states, comprehensive car insurance covers glass replacement without a deductible payment but usually, there is a deductible unless you have a vanishing deductible, which means that you haven't filed any claims and are rewarded for it.
Usually, a deductible must be paid before insurance coverage kicks in. Deductibles often range from $200 to $1,000. The lower your deductible, the higher your monthly premiums and vice versa. Let's say your deductible was $500 and the damage to your car will cost $2,500 to fix. You'd pay the $500 and your car insurance company will pay $2,000.
Do I Pay the Comprehensive Coverage Deductible on a Vehicle to the Insurer?
When filing insurance claims, you always need to pay the deductible amount before insurance coverage can begin to pay for losses, which simply means that if you have a $500 deductible, you're responsible for that amount for repairs. You pay it to the mechanic, not the insurer.
You can always change your deductible amount. The higher your deductible, the lower your monthly premium.
Comprehensive vs Collision Insurance
You may still be wondering, "What is the difference between comprehensive and collision insurance?" There's a reason why these two very distinct coverages are thought of as one unit or are often paired together. Chances are that you are simply interested in getting compensated for your valuable, regardless of whether you hit a deer, an air conditioner fell on your roof or your car was carried away in a sudden flood.
When the damage to your car was not a direct result of a car accident chances are you would need comprehensive to be covered for it. If you know cars in your neighborhood get stolen, as expensive as comprehensive insurance will be, it's better than losing all the money you dumped into a stolen car (and the payments you'll still be responsible for).
Do I Have to Buy Comprehensive Coverage for My Vehicle?
Comprehensive coverage is not required by law but if you're leasing or financing a car, chances are that you will have to buy it as well as collision coverage.
Remember that both collision and comprehensive coverages are optional unless a financial institution or lienholder requires that you carry a full coverage insurance policy on your vehicle, which would include comprehensive coverage.
Are Collision and Comprehensive Always Bought Together?
Even though comprehensive insurance is different from collision insurance, often you must buy collision in order to buy comprehensive. Both are required by lienholders when you finance or lease a vehicle.
The reason why lienholders require collision and comprehensive is that the institution you borrowed from technically owns the car and wants to protect their asset while you're making payments on it.
Even if you own your car and aren't required to have it, comprehensive auto insurance is an important coverage to consider.
How Is My Coverage Rate Determined for Comprehensive Coverage
The rate for your comprehensive coverage will depend on several variables, one of them being its susceptibility to theft. Did you know that Hondas Civics are stolen more than any other car? It would naturally follow that despite its economical price tag, Honda Civics are a little bit expensive to insure.
Other factors that raise comprehensive car insurance rate:
Hazardous conditions (lots of wildlife crossing in the area, floods)
Insecure car parking (street parking in a city will probably yield a very high rate)
What Does Fully Comprehensive Insurance Mean?
Fully comprehensive insurance is just another way of saying comprehensive insurance or comprehensive car insurance. All of these terms are misnomers for a product that is not comprehensive in the least.
If you get into a car crash and it was your fault, comprehensive will not cover you. This is why in many states you need to have comprehensive to buy collision (in case you hit that deer and called it a collision because in a way it is one.).
In fact, most insurance companies will not allow you to buy collision coverage without comprehensive coverage. But many policies offer comprehensive without collision. Totally confused? It's okay. Just buy both unless the total of the two is more than 10% of the total blue-book value of your car.
Is Comprehensive Coverage Expensive?
No, comprehensive coverage is inexpensive. In fact, comprehensive coverage is three to four times cheaper than collision. For both types of coverage, there is a deductible (separate for each one) and the total claim amount will never exceed the market value of the vehicle the day the claim was filed.
Is Comprehensive Coverage Required Where I Live?
No, comprehensive insurance isn't required by law in any state. This doesn't mean that your financing company, or lienholder, won't require you to have it if you're financing or leasing a car from them. If you're still making payments you're required to have full coverage insurance, which includes comprehensive coverage.
What Else Should I Know About Comprehensive Auto Insurance Coverage?
If you have the latest safety features on your car, especially anti-theft protection, your insurer will provide discounts. The less vulnerable your car is to theft, the lower your comprehensive car insurance rate will be. Make sure to tell your insurance agent that you're eligible for a discount if you have a newer car or had safety features added on recently.
I Have an Old Car. Do I Still Need Collision and Comprehensive Insurance?
It never makes sense to overpay for car insurance. Keeping in mind that you will never get paid out more than the market value of the car, your optional auto insurance costs (this is not counting liability) should never exceed 10% of what the insurance company would pay you out.
So, find out what your car's worth today on Kelley Blue Book. Take 10% of that and compare it to your payments. As a general rule, cars worth less than $4,000 don't need full coverage insurance policies.
What Else Should I Know About Comprehensive Coverage?
Never pay too much for car insurance. Compare rates with us today to see if we can knock a couple of hundred dollars off your current rate. Access our free rate comparison tool by entering your zip code below. See what insurance companies will offer you for a car insurance policy that includes both liability insurance and comprehensive coverage. You don't have to put down a credit card, and our privacy rules ensure that we'll never track your IP address. We'll only ask for a working phone number and email address to deliver the insurance auto policy quotes to you within a couple of minutes!
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