What is Auto Insurance Comprehensive Coverage?

By Jennifer Brozic 07/16/2021 4:25pm

What is collision car insurance coverage

Crashes aren’t the only things that can wreck your car. Adding comprehensive coverage to your auto insurance policy can help cover repair or replacement costs when something other than a crash damages your vehicle.

What Comprehensive Insurance Covers

Comprehensive coverage offers protection from events that are out of your control and don’t involve a crash, including:

  • Extreme weather. Hail, hurricanes, floods, wind, tornados, and wildfires. Comprehensive coverage can help pay for damage Mother Nature causes.
  • Animal damage. When you crash into a car or stationary object, collision covers it. But if you have a run-in with a deer, bear, or another wild animal, comprehensive covers it. It also covers damage mice, squirrels, marmots, and other rodents may cause if they get into your car.
  • Falling objects. If a strong gust of wind knocks down a tree branch that falls onto your vehicle or your car is in the path of a meteor or other strange falling space objects, comprehensive has you covered.
  • Theft. If you’re a victim of a string of car thefts in your area, comprehensive can help pay to repair or replace your vehicle.
  • Vandalism. If someone keys your car or slashes your tires, your insurer will pay for repairs if you have comprehensive coverage.

What Comprehensive Doesn’t Cover

While having comprehensive coverage can come in handy if something other than a collision damages your car, it won’t cover:

  • Medical bills. Comprehensive doesn’t cover medical bills for you or anyone else who’s injured in an accident.
  • Crashes. If your car is damaged in an accident with another vehicle or a collision with a stationary object, comprehensive won’t cover it. You need collision coverage for that. Comprehensive also won’t pay to repair anyone else’s vehicle.
  • Your personal property. If your phone is stolen from your car, comprehensive won’t pay to replace it or anything else that’s taken from your vehicle. However, your homeowner’s insurance policy might reimburse you for stolen items.

How Comprehensive Insurance Works

If you need to file a claim, you must pay for part of the repairs upfront before your insurance kicks in. The amount you pay is the deductible, which you select when you purchase the policy. Your insurance company will let you know what deductible amounts you can choose from.

Typically, the higher the deductible is, the lower your premium will be. After you pay the deductible, the insurer covers the remaining repair costs up to the policy’s limit.

Policy limits for comprehensive coverage are typically lower than the limits you might select for liability coverage. That’s because comprehensive coverage doesn’t pay for lawsuits that might result from an accident.

The policy limit on your comprehensive coverage is typically the market value of your vehicle. And it’s the maximum amount your insurer will pay for repairs even if it’s not enough to cover the damage.

For example, let’s say your car value is $2,000, and the hurricane that blew through your town caused the vehicle $5,000 in damage. The insurance company will likely “total” your vehicle and write you a check for $2,000 (minus your deductible).

To find out the fair market price range of your vehicle, check out our valuation tool.

What is the Difference Between Collision and Comprehensive Insurance?

When collision coverage kicks in, it’s usually because you had a run-in with a pothole, rolled your vehicle, or were in an accident. And you need to repair your vehicle. Comprehensive insurance also covers physical damage to your vehicle, but it kicks in when something other than a crash (e.g., severe weather) causes the damage.

Is Comprehensive Insurance Mandatory?

Comprehensive coverage is optional in all 50 states. But lenders usually require it. If you lease a car or take out an auto loan, you’ll likely need to buy comprehensive coverage as a condition of your financing.

How Much Does Comprehensive Insurance Cost?

In 2018, the average premium for comprehensive coverage was approximately $168, according to the National Association of Insurance Commissioners (NAIC). But the amount you’ll pay depends on multiple factors, including how old your vehicle is, how much it would cost to repair or replace it, the rates of theft and severe weather where you live, and more.

Is Comprehensive Insurance Worth It?

When deciding whether to include comprehensive coverage in your auto insurance policy, ask yourself if you can afford to repair your car or buy a new vehicle if the one you’re currently driving is damaged. If you can’t, maintaining comprehensive coverage can help protect your finances, but it depends on the value of your vehicle.

If the cost of your premium and your deductible exceed the value of your car, it’s probably not worth the added expense. But if the cost of your premium and deductible are significantly less than the value of your car, adding the protection may be worth it.

For example, let’s say the premium for your comprehensive coverage is $200 a year, your deductible is $500, and the actual cash value of your car is $13,000. If a tree falls on your vehicle, causing $5,000 in damage, the insurance company will cut you a check for $4,500. And you will have paid $700 for your premium and deductible.

But if the value of your vehicle is $1,500, the insurance company will only reimburse you for $1,000 in damages. So, carrying comprehensive coverage may not make sense in that case.

Can I Remove Comprehensive Insurance?

If you don’t have an auto loan or lease, you can remove comprehensive coverage from your auto insurance policy at any time. But before you drop the coverage, run the numbers to make sure it makes sense financially.