Comprehensive Car Insurance: What Is It and How Does It Work?
Comprehensive car insurance is a form of auto insurance coverage that will cover damages to your vehicle that have been caused by anything other than a collision.
While most forms of auto insurance offer protection from a collision, your comprehensive insurance coverage provides further protection as there are more ways than one for a vehicle to become damaged.
Comprehensive car insurance covers your vehicle in the event of damages that aren’t the result of an accident and can include things like hail damage, vandalism, or even theft.
A big bonus with comprehensive auto coverage is that it’s relatively cheap compared to liability auto insurance. The main drawback of comprehensive auto coverage is that it only covers things related to physical damage – so if you accidentally hit someone while driving, their medical bills won’t likely be covered unless you also carry liability insurance.
This is a guide to comprehensive insurance that can help you in choosing the best coverage options for your needs.
Comprehensive Car Insurance Explained
Comprehensive car insurance is a form of auto insurance coverage that will cover damages to your vehicle that have been caused by anything other than a collision. Many people know about collision insurance, which covers damages that occur when you’re in an accident, but comprehensive car insurance goes one step further. This additional coverage means that if something happened to your car—even if it wasn’t because of a collision—your insurance would still pay for repairs or replacement.
What is Comprehensive Insurance Coverage?
If you want to have broader insurance coverage on your vehicle to ensure that you are protected at all costs, then you may want to buy comprehensive coverage.
Comprehensive insurance covers these risks:
- Falling objects
- Fire
- Theft or Larceny
- Explosion or Earthquake
- Windstorm
- Hail, wind, or flood
- Vandalism or mischief
- Riot or civil commotion
- Contact with birds or animals
- Breaking of glass (not caused by a collision)
If you own a vehicle, then you will be required by your state to have at least state minimum liability coverage. Liability insurance is different than physical damage coverages and this is why a lot of people question what is comprehensive insurance and how it will be useful to them if they already have liability coverage for bodily injury and property damage.
In most cases, a standard car insurance plan will offer liability protection for bodily injury and property damage caused by your vehicle, but there are other forms of insurance that you can buy for further coverage.
It is a state law that all drivers carry liability insurance, but collision and comprehensive auto insurance are considered to be optional coverage for those who require it. These kinds of insurance can be purchased by the person who owns the vehicle outright. Comprehensive insurance and collision insurance are additional forms of car insurance coverage that you can choose to buy if you want to protect and repair your vehicle in an accident.
Do I Need Comprehensive Insurance?
Is it worth having comprehensive insurance? Comprehensive insurance is not required by law like liability insurance. It is optional coverage. It is possible that if you are financing a vehicle, the finance company that you are using may require you to also buy comprehensive insurance for your car.
In some cases, you may not have to or want to purchase comprehensive insurance for your car, which is a valid option.
For example, if you own an older vehicle, cannot afford the insurance company cost of additional coverage, consider yourself to be low-risk when it comes to non-collision damage, or want to self-insure, then you do not have to purchase comprehensive insurance.
However, if you live in a rural area where collisions with animals are a common issue, or perhaps you are living in a state that experiences extreme weather like hailing and storms then comprehensive coverage is a great thing to add to your auto insurance plan as it ensures you will be protected for more than a collision with another car.
Both collision insurance and comprehensive insurance have deductibles, which means that the insurance policy can be tailored to suit each drivers’ needs. A driver can choose the deductible limits as they see fit.
For example, even if you do not feel as though you will file a comprehensive coverage claim, but you still want this coverage just in case, then you can choose a relatively high deductible to lower the overall premiums of your comprehensive insurance policy. Deductibles can be as low as $0 up to $2,500.
It is important to note that the higher the cash value of your car, the higher the comprehensive insurance coverage will cost as there will be a higher risk of these kinds of vehicles. When you do own a car that has a high value, it makes sense that you want to have the best coverage possible to keep it protected from any kind of damage.
This will ensure that you are getting your money’s worth for the car.
How Does Comprehensive Insurance Work?
To help you understand what comprehensive insurance is a little more and how this kind of coverage works, the following is an example of a claim that drivers can make for damage to their car.
If someone owns a vehicle with an actual cash value of $10,000 and has a comprehensive coverage deductible of $1,000, they can receive $9,000 in comprehensive coverage from the insurance company if a covered loss occurs (example theft or vandalism) to their car. For example, if your car is damaged in a tornado or other weather conditions, you can contact the insurance company to make your claim.
However, if the same driver did not have comprehensive coverage for their car and it was damaged in a tornado, then the collision and liability portions of their insurance plan will not cover the damage to their vehicle. This means that without the right insurance plan, the driver could have to pay out of pocket for the $10,000 worth of damage to their car.
Without comprehensive insurance, the driver in this situation may have to take out a loan to cover the $10,000 damage to their car or replace the model with something less expensive, which may not be suitable for their lifestyle.
Without comprehensive insurance, drivers will face a great cost when it comes to damage to their car that has not been caused by a collision. As you can see, various forms of damage can happen to your vehicle outside of a collision. Are you prepared to handle the cost of this alone?
The kind of coverage that is available will differ based on the insurance company you have, but all will offer high comprehensive insurance rates for vehicles that have a high cash value.
How much does Comprehensive Insurance Cost?
The cost of comprehensive insurance may not be as much as you think to add to your existing insurance plan.
Below we show an example of the cost of comprehensive auto insurance coverage vs other coverages. For example, for a 38-year-old female driver in Kentucky with a 2020 Jeep Cherokee, the additional cost for adding comp to her policy with a $500 deductible was $223.40 a year. Considering the amount of money that can be paid out during a comprehensive claim, this is a great deal.
However, considering the value isn’t the only thing you should do when looking for the best insurance policy. It is important that you also consider what kind of comprehensive coverage is being offered, which means reading the small print and ensuring that you will be able to claim the forms of damage that you are concerned about.
Comprehensive car insurance products may vary by state or zip code, so make sure that you learn as much information as you can during your search for the best coverage to ensure that it is the right one for you.
How To Find The Best Insurance Company For Comprehensive Coverage
Just as there is a range of insurance types and policies available, there are just as many insurance companies available.
This can make it very difficult for drivers to find the best insurance company for their needs, as each seems to offer a better deal than the next.
When it comes to looking for the best comprehensive insurance policy for your car, of course, value is going to be the first thing on your mind. You want to make sure that you will be able to afford the additional cost of comprehensive coverage to make it worth it.
When you get a quote from Insurance Geek you will get to compare a variety of auto insurance companies to see which offers the best deals.
Thank you for explaining about comprehensive insurance and how it works. I’ve been wondering about this since researching car insurance. I’ll be sure to keep this in mind when figuring all of this out.