What is comprehensive car insurance?
Despite what it sounds like, comprehensive car insurance is not an all-encompassing policy. It’s still a smart investment, though. Comprehensive car insurance is protection against sudden, direct or accidental loss outside of a car-on-car collision. In other words, it covers any damage occurring out of your control (other than getting hit by another driver.) For example, it covers events such as hail causing a cracked windshield, a wildlife run-in denting your hood or other serious damage stemming from vandalism.
While liability coverage is required in nearly every state, comprehensive car insurance is optional.
While liability coverage is required in nearly every state, comprehensive car insurance is optional. Still, nearly four out of five drivers opt to add comprehensive coverage according to the Insurance Information Institute (III). Discover below exactly what comprehensive car insurance covers, what it doesn’t, how much it should cost, and whether you need it.
So what exactly does comprehensive car insurance cover?
As stated above, comprehensive car insurance covers against non-collision damage. That includes theft of both the entire car and parts of the car. In the same vein, comprehensive car insurance covers damage caused by another individual as an act of vandalism or terrorism as well as harm occurring during a civil disturbance like a riot or protest.
Damage caused by natural disasters and extreme weather are also covered by comprehensive insurance. Think hurricanes, tornadoes, earthquakes, lightning, floods, hail, windstorms, and volcanic eruptions. Falling objects like branches and rocks, along with fire, and explosions are listed in most comprehensive car insurance policies too.
Contact with animals is another important feature of the policy. Sadly, there are more than 1.5 million deer-vehicle collisions each year, which means thousands of injuries and over $1 billion in vehicle damage. And deers are just one small fraction of the different types of wildlife that can be dangerous on the road. Overall, comprehensive car insurance covers damage whether you hit the animal, the animal hits you, or your car somehow suffers extensive damage from animals through various other types of scenarios.
Another useful feature of comprehensive car insurance is the coverage of cracked or broken windshield and windows. In fact, glass damage is one of the most common comprehensive insurance claims. There is rarely a safe way to avoid a stone or other small road debris flying toward your vehicle while you’re driving. If you notice a small crack or chip, be sure to file the incident and get it fixed before the damage grows. Cracks and chips can limit your visibility, and eventually shatter the entire pane if left unattended over time.
What doesn’t comprehensive car insurance cover?
It may be obvious by now, but comprehensive car insurance does not cover damage that results from collision with another car or object. That includes damage to your or another person’s car as well as any medical expenses for you, your passengers, the other driver involved and any passengers in their car. Lost income or legal action is also unrelated. All of these losses fall under bodily injury and liability coverage.
Comprehensive insurance also doesn’t cover towing expenses as a result of breakdown, accident, flat tire, or dead battery. Additionally, it won’t cover rental car costs in case your car becomes inoperable after an accident or event. Roadside assistance and towing and rental reimbursement coverage compensates for these expenses.
Another important exclusion to note? While comprehensive car policies cover car theft, they do not provide payouts for any personal property stolen from inside your car. No car insurance does. Typically, this falls under your homeowners or renters insurance policy.
How do collision and comprehensive car insurance compare?
Collision and comprehensive car insurance are both optional coverages where your insurer pays for repairs to your vehicle. They’re usually offered together, though they provide different types of coverage. Collision insurance is exactly what it sounds like. It offers protection in case your car collides with something else, including other vehicles and objects like guardrails, flagpoles, and fences. It also covers damage as a result of flipping over. Comprehensive insurance is basically everything else. Some states refer to it as “other-than-collision” insurance.
The key difference between these two insurance types is the element of driver control. Collisions are generally considered within a driver’s control, while any acts of God or nature are not. For example, animal collisions are covered by comprehensive insurance rather than collision insurance because these accidents are considered out of the driver’s control.
All of these losses can be quite costly without the right policy in place, but collisions are usually more expensive. That being said, comprehensive insurance covers many more incidents. It is smart to choose both if you want to be adequately covered. Though some drivers expect comprehensive insurance to include collision insurance if they don’t have both, this is not the case.
How much does comprehensive car insurance cost?
Comprehensive car insurance policies generally cost between $100 and $200 per year. Exact premiums are calculated based largely on two factors: the actual cash value of your vehicle, meaning the purchase price minus depreciation, and the deductible, which is the amount of money you agree to pay out-of-pocket for any claim before insurer payouts kick in.
Most drivers choose a deductible amount between $250-$500. You can choose a higher deductible to cut premium costs, but that means you will pay more out-of-pocket when you file a claim. It’s usually a good strategy for drivers with high-risk or high-value cars and a healthy emergency fund. Keep in mind that you will not be reimbursed when the damage is below your deductible, so you will have to pay that amount yourself.
Comprehensive coverage has a limit, which is the maximum amount your policy will provide in the event of a covered claim. Typically, the comprehensive policy limit is the actual cash value of your vehicle. Even if your car is a total loss, comprehensive insurance will compensate only up to that amount.
Do you need comprehensive car insurance?
Most drivers need to pay for comprehensive car insurance to stay current on their lease or loan. Others choose to have it for peace of mind. If you’re struggling to decide whether a comprehensive policy is right for you and your car, consider whether you have leased or borrowed money to pay for the car. If so, you probably don’t have a choice.
You should also think about how likely the car is to fall victim to hazardous conditions, which will depend on where you live and whether you keep your vehicle in a garage when not in use. Keep in mind that some dangers, like weather-related incidents, can cause havoc whether you’re out driving or not.
Above all, you’ll want to evaluate the value of your car and the cost of your current policy with comprehensive insurance added. Some people think older cars don’t need comprehensive insurance, but it isn’t as simple as that. Research suggests that you take the amount you'd pay in one year for comprehensive coverage and multiply that number by 10. If your car is worth less than that result, then comprehensive and collision coverage might not be a cost-effective option for you.
On the other hand, comprehensive coverage is relatively affordable considering everything it covers. If you can’t, or don’t want, to pay repair and replacement costs if your car gets stolen or damaged by an act of god, you should buy it. If you live in an area with high rates of car theft, vandalism, or severe weather, you should buy it. Ultimately, you should always compare insurance quotes from a range of providers to ensure you get a comprehensive policy that is right for you.