What is Comprehensive insurance and what does it cover?

What Is Comprehensive Insurance?

Comprehensive insurance is a type of motor vehicle insurance that covers damage to your car due to causes other than collisions. Comprehensive insurance will protect your vehicle if it is damaged by a tornado, hit by a deer, scratched by vandals, damaged by a robbery, or destroyed by a garage collapse, among other causes.

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Comprehensive insurance, collision insurance, and liability insurance are the three components of a motor vehicle insurance policy. In most states, the law requires drivers to carry liability insurance, but collision and comprehensive insurance is an option if someone owns the vehicle outright. If a person has financed the vehicle, the auto loan company may require comprehensive insurance.

What is covered by Comprehensive insurance

In terms of what is covered by comprehensive insurance, this list includes damages related to:

Contact with animals, such as hitting a deer.

Natural disasters, including earthquakes, floods, and hurricanes.

Fire.

Riots and vandalism.

Theft of a vehicle, or theft of some specific part of the vehicle.

Broken windshield.

Falling objects, including branches, rocks, or hail.

Comprehensive insurance vs. Collision Insurance

Taking out comprehensive car insurance can make sense if you're buying a new car, regardless of whether you're financing it or paying in cash. Comprehensive coverage can protect you from minor and major damage caused by things beyond your control, regardless of any coverage you may have that covers accidents.

Where you live can also influence your decision when to have comprehensive coverage. If a person lives in a rural area where collisions with animals are common or in cloudy areas that are often exposed to hail, they may want to purchase comprehensive insurance. The same is true if a person lives in a part of the city with a high crime rate where robberies and thefts are frequent.

Collision insurance protects you in the case of an overturned car, a collision with another vehicle, or a collision with an object. However, this insurance does not cover robbery or theft, or weather damage. If you rent a car, you will be required to purchase collision insurance. Collision insurance is useful when you have an accident to help pay for repairs to your vehicle, and it covers any damage to your car from potholes in the road.

Neither will cover medical expenses from an accident or damage to someone else's vehicle if you have an accident.

Comprehensive Insurance Costs

Comprehensive insurance covers damage to your car as a result of accidents and disasters other than car accidents. The average cost of comprehensive insurance can vary from about $134 per year to almost twice that, depending on several factors, such as the state in which you live.

Collision and comprehensive insurance each have a number of deductions (liability insurance has no deductions), so a driver can choose different deductions based on the perceived level of risk within each of these areas.

If someone thinks they're unlikely to file a comprehensive claim, but they don't want to completely ignore comprehensive insurance, they could opt for a relatively high $1,000 rebate to lower premiums. The higher the cash value of the vehicle, the more expensive the comprehensive insurance policy.

Understanding how insurance companies determine a driver's risk class can help you estimate how much you might pay for comprehensive coverage. Where you live, your driving record, and your coverage amount can determine how much you pay for car insurance, including comprehensive coverage.

For example, the most expensive state to insure a car is Louisiana, where the average driver spends $1,495 on full car insurance each year. The least expensive state, by comparison, is North Dakota, where drivers pay just $692 a year on average to insure their vehicles.

Advantages and disadvantages of Comprehensive insurance

Comprehensive car insurance protects you financially from theft, natural accidents, and damage caused by the weather. This insurance means you won't be out of your pocket if a tree falls on top of your car or a thief steals your catalyst.

But there are some disadvantages. If you have an accident, comprehensive insurance will not pay for the damage. And comprehensive insurance may be expensive if you buy it in conjunction with collision insurance. If your vehicle is old and paid off, you could save money by not buying comprehensive coverage, especially if theft and weather-related events aren't an issue where you live.

Advantages

Comprehensive coverage protects you from theft, weather-related events, and other major things that are out of your control.

Comprehensive coverage often includes "unforeseen events" such as robberies or windshield wipers damaged by hail.

If you have a new car and live in an area with a high crime rate, comprehensive insurance will protect against damage from robbery or theft.

Disadvantages

Comprehensive insurance does not cover collision damage.

It may not be necessary for an old car with a high number of kilometers.

Comprehensive insurance does not cover personal items stolen from your car.

It does not cover damage caused by potholes on the road.

Examples Of Comprehensive Insurance

Comprehensive insurance works similarly to other types of car insurance if you need to file a claim. However, if you've never done it, it's useful to have examples so you know what to expect. Here's an example of how comprehensive insurance works if a driver files a claim for vehicle damage.

Let's say someone drives a $10,000 Honda Accord, with a comprehensive cut of $1,000. If a tornado destroys the car, the driver will receive $9,000 from the insurance company. If they do not have comprehensive coverage and the tornado destroys the vehicle, the collision and liability portion of the policy will not cover the damage.

The driver will be responsible for the entire $10,000 loss. A driver may have to get a loan to buy a replacement vehicle or accept a cheaper vehicle if they don't have $10,000 to spend on an equivalent replacement.

Seeing an example of comprehensive insurance in action can give you an understanding of how valuable it is if your car breaks down. If you're more inclined toward "when to stop comprehensive insurance," it's useful to know how much loss you might pay for repairs out of your own pocket.

How Does Comprehensive Insurance Work?

Like other forms of car insurance, comprehensive coverage pays for a portion of the loss if your car is damaged. The vehicle owner must also pay part of the costs, known as deductions. Insurance payments can be used for repairs or to acquire a new vehicle.

What does Comprehensive Auto insurance cover?

Comprehensive auto insurance covers damage to the car except for collision damage. These include natural hazards, such as collisions with deer and falling branches, as well as fires, bad weather, natural disasters, theft, and acts of vandalism. However, this insurance does not cover damage resulting from a collision with another vehicle, or injury to passengers or others.

How Much Does Comprehensive Auto Insurance Cost?

The cost of a comprehensive insurance policy will vary, based on the value of the vehicle, the zip code where the vehicle is registered, and the driver's past insurance history, among other factors. The cost can range from about $134 per year to about double that.

Does Comprehensive insurance cover pothole damage?

No, comprehensive insurance does not cover any damage to your car from potholes on the road. However, collision insurance does, as it covers damage from a collision with an object.

Conclusion

If you have paid off your vehicle completely, and you cannot afford comprehensive insurance, or you have an older car that does not have much value, you may feel that you are at low risk of non-collision damage. In this case, you may choose to skip comprehensive insurance. Or, if you prefer to do your own insurance, then you may also decide not to purchase comprehensive insurance.

However, remember that in this case, ignoring comprehensive coverage means you could end up with a large repair bill if your car breaks down. So consider the cost of potential repairs against what you might pay in terms of premiums or deductions to maintain comprehensive coverage.

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