What Is Comprehensive Coverage?
Last Updated on July 31, 2020
Comprehensive coverage is the type of auto insurance coverage that pays to repair or replace your car after something other than a collision. Comprehensive coverage typically covers damage due to things like natural disasters, inclement weather, contact with animals, theft, and vandalism.
Comprehensive coverage can help you cover the costs of damages to your vehicle from “other than collision” scenarios. If you just wanted your car to be protected from collisions, you would get collision coverage. If you want your car to be protected from everything, you would get full coverage.
Continue reading below to learn all about comprehensive coverage including what comprehensive coverage covers, what it does not cover, how high you should set your comprehensive deductible, and whether or not you need comprehensive coverage.
What Does Comprehensive Coverage Cover?
Comprehensive coverage, as stated above, covers damage to your vehicle from non-collision situations. Common situations covered by comprehensive coverage include:
- Natural disasters (hailstorms, tornadoes, mudslides, etc.)
- Civil disturbances (protests, riots, flash mobs, etc.)
- Falling objects (trees, rocks, structures, debris, etc.)
- Fire damage
- Hitting or being hit by an animal (deer, bear, etc.)
- Rodent damage (rats chewing through wires, etc.)
- Vandalism (graffiti, break-in, joy ride, damage, etc.)
- Broken windshields
While comprehensive coverage is not required by law, if you own or lease your vehicle, your bank may force you to get comprehensive coverage.
What Doesn’t Comprehensive Coverage Cover?
Comprehensive coverage only covers damage to your vehicle from the non-collision scenarios listed above. It will not cover damages resulting from the following:
- Damage to your car from an accident or collision (Your collision coverage pays for this.)
- Medical expenses or lost wages for you or your passengers after a collision (Your health insurance, liability coverage, or medical payments coverage pays for this.)
- Damage to another person’s car that you cause (Your liability coverage pays for this.)
- Towing and labor coverage (Your roadside assistance coverage pays for this.)
- Medical expenses or lost income for someone else after an accident (Your liability coverage pays for this.)
- Rental reimbursement (Your rental reimbursement coverage pays for this.)
- Collision or rollovers (Your collision coverage pays for this.)
- Damage to your vehicle caused by an uninsured or underinsured driver (Your uninsured motorist coverage or collision coverage pays for this.)
Despite its name, comprehensive does not exactly mean “all-encompassing.” Because the word “comprehensive” is defined as “complete” or “of large scope,” many people confuse comprehensive coverage with full coverage. While comprehensive coverage is just one type of coverage that covers non-accident damage to your vehicle, “full coverage” insurance usually refers to an insurance package that includes liability coverage, collision coverage, and comprehensive coverage.
If you still have questions about comprehensive coverage, you should check with a car insurance agent to learn more about what exactly is covered. The aforementioned information should be sufficient for a broad overview. However, every provider and policy is different. Double-check it all with your insurance agent before you make any decisions.
What Should Your Comprehensive Deductible Be?
When picking a comprehensive deductible, or if you want to buy comprehensive coverage, it’s crucial you think about how old your car is and how much fixing it might cost you.
A comprehensive deductible is the amount of money you would be all right paying out of pocket if you ever experienced this kind of loss. So, if your car was stolen and you had a deductible of $500, you would pay $500 of your own money, and then your car insurance provider would pay the rest.
How much you pay each month for comprehensive coverage is determined in a different way than for personal injury liability and property damage. With that type of coverage, the amount of protection you get dictates what you pay. With comprehensive coverage, though, the cost varies based on the deductible you choose. The higher the deductible, the less you’ll shell out each month for a premium – but the more you’ll spend of your own money if you file a claim.
Comprehensive Coverage and Your Car’s Value
No matter what you choose for your deductible, the amount of comprehensive coverage provided depends on one big factor: the actual cash value (ACV) of your vehicle.
How do you calculate the actual cash value? Actual cash value is equal to what you paid for your car minus depreciation and your deductible. So, what will comprehensive coverage pay for? It will pay an amount up to the cash value of your car to either repair or replace it. If the cost repairing your car is more than the actual cash value of your vehicle, your auto insurance company will declare it a total loss and pay the sum of the actual cash value to ensure you can replace it – unless you want to retain salvage (keep the wrecked car). In that case, the salvage value will also be taken out of your payout.
The deductible amount usually ranges from $250 to $1,000. Increasing your deductible can reduce your monthly premium.
Ultimately, the biggest factor in determining whether you should get comprehensive coverage is your car’s value. If a covered car is damaged, the most that this coverage will shell out is the car’s cash value at the time it was damaged, minus the deductible amount. For a car that’s hardly worth anything – perhaps because it’s super old or a junk heap – the payout may be equal to or less than the price of the insurance.
The Legal Overview – Is Comprehensive Coverage Required?
There isn’t a single state that requires comprehensive coverage, but for people who finance or lease their car, their lender or lessee will probably require it. Lenders and lessees are the true owners of the vehicle, so they’ll want to make sure they’re protected in the event of a problem. For the same reasons, you’ll rarely be able to purchase comprehensive coverage without also buying bodily injury and collision coverage.
Who Needs Comprehensive Coverage?
Almost all drivers are at risk for the above, so the short answer to the question is, “everybody.” Now, deer collisions and tornadoes may be a little rarer, but the rest of the stuff on the list can happen to almost anyone.
If you live in a high-crime area with a serious threat of auto theft and vandalism, you’ll probably have some peace of mind with comprehensive coverage. There were nearly three-quarters of a million cases of car theft last year.
And, if you live in an area with unpredictable weather – like Dallas, Texas or Miami, Florida – then you really do need comprehensive coverage. Hail damage can be very costly. A tornado can destroy your car. Floods and fires can also wreak havoc. If you live in an area where natural disasters are an issue, you should strongly consider this type of coverage.
If you’ve decided that comprehensive coverage is the right option for your car insurance policy, get in touch with your insurance agent today. He or she will be able to point you in the right direction.