What Is Comprehensive Car Insurance Coverage?

A guide on comprehensive insurance and why you may need it.
Car stuck in water after flood

At any point, a random disaster or event could damage your car. This could cost you thousands of dollars. Comprehensive insurance is one of the best ways to ensure that you don’t have to pay out of pocket in the event of an incident that’s not in your control. This article will cover the basics of comprehensive auto insurance, including:

  • A full definition
  • What it does and doesn’t cover
  • Collision vs. comprehensive
  • Deductibles and limits
  • How much it costs and what you can do to save money

Knowing the basics of comprehensive car insurance will help you decide if it’s right for you. It may even help you save money, too.

What Is Comprehensive Car Insurance?

Comprehensive car insurance is one of the primary types of insurance coverage drivers can buy. It’s a key part of what many insurers refer to as full coverage. This type of insurance is there to protect you from natural accidents or damages that don’t involve a collision.

There are no states that require comprehensive coverage. It’s completely optional. The only time you may need it is when you don’t fully own your car and the loaner requires it. Typically, a lender will require you to have full coverage.

What Comprehensive Insurance Covers

When you buy comprehensive car insurance, you’ll have coverage for many types of damages. It covers anything that doesn’t involve a collision with another car or object. Here are some specific examples of what it covers:

  • Vandalism
  • Civil disturbances and riots
  • Theft
  • Fire
  • Hitting an animal
  • Falling objects
  • Natural disasters (e.g., hurricanes, tornadoes, earthquakes, hailstorms, etc.)

Most incidents that comprehensive insurance covers are out of the driver’s control. At times, many refer to these incidents as an “act of God,” meaning that what’s causing damage is out of your control. For example, if your car is sitting in the driveway and a tree falls on it, your comprehensive insurance will cover the damages.

What Comprehensive Insurance Doesn’t Cover

There are many different causes of damage that comprehensive insurance covers. But it doesn’t protect you from all risks out there. Here’s what you won’t get coverage for:

  • Damage to your vehicle involving a collision with another car or object
  • Any damage you cause while driving (liability coverage)
  • Medical costs of any kind

Keep in mind that comprehensive won’t cover any medical costs to you or your passengers. Even if a natural disaster causes them. You’d have to get personal injury protection (PIP) or medical payments coverage (MedPay) if you need coverage for medical bills.

The Difference Between Collision and Comprehensive Insurance

Comprehensive car insurance and collision insurance are very similar. Both aim to cover the costs of a vehicle’s damages. And each one is part of “full coverage.” But there are still some major differences. The following is a breakdown of how each type of coverage is different:

Comprehensive

  • Covers your car’s damages in the event of a natural accident or disaster
  • Doesn’t cover any medical costs
  • Covers when an animal hits your car (Only if the animal runs into your car)
  • Covers theft or vandalism

In short, comprehensive coverage handles the damage costs of a vehicle from incidents that you can’t control.

Collision

  • Covers damages to a car due to hitting an object such as a pothole
  • Covers roll-over accidents
  • Covers accidents involving one or more other cars
  • Covers collisions with other objects like trees or rocks

The types of accidents may seem similar, but the accidents that collision insurance covers are incidents where the driver is in control. Collision covers accidents that involve your car hitting other objects. It can even cover your car if it’s sitting in a parking lot and another vehicle hits it.

Is Comprehensive Car Insurance Necessary?

By legal standards, comprehensive car insurance is optional to you. No state requires it. An exception is if you are financing or leasing your car. Many lenders may require that you buy full coverage to protect their asset. Even though it’s optional in most cases, there are many reasons for you to buy comprehensive coverage.

It’s more important for some people to buy comprehensive insurance than others. Below are a few items to consider:

It Depends on Your Risk

Deciding not to purchase comprehensive insurance is a risk you may not want to take. For example, people living in rural areas are more likely to hit animals on the road. Living in a big city can also pose a risk. Vandalism and theft are more likely to occur in areas with a larger population.

Another risk is living in areas where natural disasters are common. For instance, you may need to buy comprehensive if you live in a state that’s prone to hurricanes or tornadoes. This way you’ll be able to sleep at night knowing you have protection from natural disasters.

Considering the risk factors for potential damage to your car is an important part of determining if you need comprehensive car insurance. It’s hard to know when disaster will strike. Comprehensive can help you be ready for those life-changing disasters.

Are You Financing Your Car?

Comprehensive insurance may be mandatory when you’re taking a loan on a car. The amount of coverage that you need to buy is up to your moneylender. In many cases, your lender will require that you buy full coverage. They do this to protect their financial interest in your car.

How Much is Your Car Worth?

Your car’s value is important to consider if you’re thinking about getting comprehensive coverage. If you happen to drive an old car, there may not be a reason to purchase comprehensive. This is because the cost of the coverage may exceed the value of the car itself. On the other hand, if you drive a much newer car that’s worth far more than an old car, it may be wise to protect your assets and the car by buying comprehensive insurance.

What Are the Risks of Not Having Comprehensive Insurance?

While no state requires comprehensive, it may be smart to buy it if possible due to the risks of not having it. Without any comprehensive coverage, you’ll need to pay for any damages that occur to your vehicle. Remember that these only include damages that don’t involve other vehicles, as well as events that the driver can’t control.

As with any type of insurance, comprehensive protects your finances. A major disaster could wipe out your savings. Buying coverage will help you make sure that you never have to pay out of pocket.

Comprehensive Deductibles and Limits

If you buy any amount of comprehensive insurance, you must choose a deductible. A deductible is the amount of money that you pay the insurance company each time you file a claim. Comprehensive has a separate deductible from collision or liability, even if it’s part of full coverage for a car.

If it’s financially viable, having a higher comprehensive insurance deductible could help you save more money on your rates. Per the Insurance Information Institute (III), setting your deductible at $1,000 could discount your premiums by as much as 0%.

Comprehensive insurance also has a limit that drivers can buy. A limit is the total amount that your insurer will pay to cover an insurance claim. Normally, the limit for comprehensive is equal to the actual cash value (ACV) of your car.

Cost of Comprehensive Insurance

Comprehensive insurance can be a bit more expensive than basic liability coverage. The III says that the average yearly cost of comprehensive is about $134 a year. If you’re looking at buying comprehensive coverage, there are some factors to look into that could affect the price you’ll end up paying.

Insurers consider many factors when they calculate your rates. They’re usually small details about you that indicate your risk for filing claims. The higher your risk is, the higher your rates will be. Here’s a list of common factors that could greatly impact your insurance rates:

Keeping these rate factors in mind will help you decide how much comprehensive insurance will cost you. These aren’t the only factors that insurers use when pricing insurance. But they are some of the most common ones to consider.

Finding the cheapest comprehensive insurance can seem like a tough task. However, knowing the key rate factors and how much each company charges are a big part of finding the best price.

Insurance prices will likely vary between different companies. You don’t have to settle for the first insurer that you come across. It’s a smart practice to compare auto insurance quotes from each company. That way, you can find the best deal for you.

Frequently Asked Questions

Q: Will I need to buy rental insurance if I already have car insurance?

A: The short answer is that you might have to. If you already have insurance such as comprehensive or collision, it could carry over to your rental car. Be sure to check with your insurer.

Q: Does comprehensive insurance cover any medical bills?

A: No. Comprehensive only covers damages to your vehicle up to the limit that you choose. The limit will typically be equal to the actual cash value of your vehicle or the amount of money it’s worth on the market.

Q: If a car hits my vehicle in a parking lot, does comprehensive insurance cover it?

A: Since another car hit your vehicle, collision insurance covers it. If the other driver leaves their insurance info, their liability coverage would pay for it. Otherwise, you’ll likely need to pay for it out of pocket.

Q: What is full coverage car insurance?

A:  Besides liability insurance, full coverage is the other insurance that people buy. Comprehensive and collision insurance are often a package under full coverage. You can also buy each type on its own. Keep in mind that you may need full coverage if you’re leasing or financing your car. Lenders almost always require that you buy full coverage to protect the car and their stake in it.

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