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Comprehensive insurance covers your vehicle for things outside your control, such as flood damage, theft or hail damage. While states do not require comprehensive coverage to remain compliant with insurance laws, your lender may if your vehicle is financed or leased. If you’re not required to carry comprehensive coverage, it’s still an excellent way to protect yourself financially. For many, comprehensive coverage is affordable. Bankrate has broken down the basics of comprehensive insurance so you can decide if this coverage is right for your vehicle.
- Full coverage car insurance coverage typically refers to a policy that includes state-mandated coverage types, plus comprehensive and collision insurance.
- Your state will not require you to have comprehensive insurance — but your lender may.
- Comprehensive coverage provides coverage for your vehicle for many perils such as theft, weather, hitting an animal and falling objects.
- Comprehensive also covers glass damage; some insurance companies will allow you to carry a separate glass deductible.
What is comprehensive insurance?
Comprehensive insurance is not its own insurance policy, but is instead an optional coverage — called “comprehensive coverage” — that can be added for full coverage on your vehicle. It does not cover your typical auto accident. Instead, it covers just about everything else that damages your vehicle.
Comprehensive coverage helps repair or replace your car if a covered event or peril occurs. This is because comprehensive auto insurance is generally seen as supplemental auto insurance, meaning it fills the gaps left behind by liability and collision.
When shopping for car insurance, most people do not think about their car being damaged by anything except another car. However, many claims are caused because your vehicle was damaged by a non-collision event, like a flood, vandalism or hailstorm.
What does comprehensive insurance cover?
First, it’s essential to understand comprehensive vs. collision. Hitting a stationary object or a pothole falls under collision coverage. Additionally, collision applies to your vehicle’s damage if you hit another vehicle or rollover in a single car accident.
Comprehensive coverage covers repair costs for many other instances where your vehicle is damaged (minus your deductible). Below are examples of instances that are typically covered and not covered under comprehensive insurance:
|Comprehensive insurance||Hitting an animal
Windshield and glass
Hitting stationary objects
Comprehensive covers several things that could easily damage or destroy your car. Because of this, many insurance experts consider comprehensive to be a vital part of an auto insurance policy.
How much does comprehensive coverage cost?
For many, comprehensive insurance is an affordable way to protect their vehicles from the unexpected. According to data compiled from Quadrant Information Services, the average cost for a full coverage policy in the U.S. is $2,014 annually. Comprehensive coverage, however, is usually cheaper than collision and is just a small portion of that total premium.
Insurance companies consider many different rating factors when calculating the cost of coverage, including:
- Driver’s age (in most states)
- Driver’s gender (in most states)
- Marital status
- Driving experience (in years)
- Driving history
- Claims history
- Insurance discounts
- Type of car
- Age of car
- Car ownership status
- Annual mileage
- Credit-based insurance score (in most states)
- Vehicle Location
- Insurance history
- Amount of coverage you need
Many factors play a role in determining your car insurance quote, but each company calculates a different amount due to how they perceive risk based on their rating algorithms. Because of that, the cost of comprehensive coverage will differ among carriers.
The cost of comprehensive coverage also varies depending on your deductible or the costs you pay out of pocket in the event of a claim. Some standard deductibles include $250, $500 and $1,000, but more options may exist depending on your carrier. Generally, the higher your deductible, the lower your premium will be for that coverage.
Although choosing a higher deductible can result in a cheaper premium, a high deductible may cause financial hardship if you need to file a comprehensive claim. For this reason, many insurance professionals advise choosing the highest deductible you can reasonably afford.
Do I need comprehensive insurance?
It depends. Nearly every state has a minimum amount of coverage you must carry, but comprehensive coverage is not one of them. Even though your state does not legally require this coverage, your finance or leasing company will usually require it. Since your lender technically owns your vehicle until it is paid off, it will want to protect its investment from damage.
Even if your vehicle is not financed, consider the following questions before dropping comprehensive from your policy:
- Is there a lot of wildlife in your area?
- Are forest fires a common occurrence at the moment where you live?
- What is the crime rate in your neighborhood?
- Do you get a lot of hail in your state?
- Do you live in a flood zone, according to the FEMA flood map?
- What is the depreciated value of my vehicle?
Even if comprehensive coverage isn’t required, you may consider including it if you live in a risky area for certain incidents. Floridians, for example, may find that the cost of comprehensive coverage is worth it because of the high probability of extreme weather events in their state.
Insurance experts recommend that if additional financial protection is possible with your budget then you should consider purchasing comprehensive coverage.
Frequently asked questions
Comprehensive coverage is optional if you are not financing or leasing your vehicle, and some drivers drop comprehensive coverage if their car is more than 10 years old. As a vehicle ages, its value depreciates, and some may feel that their car is no longer worth the added expense of comprehensive coverage.
Rather than drop comprehensive coverage, another option is to adjust your deductible. If you raise your comprehensive deductible, you will be responsible for a larger portion of the cost of repairing your vehicle, but it may lower your premium. If you decrease your deductible, you will increase your chances of your insurer covering more of the repair costs, even as your vehicle depreciates, but it will probably increase your premium. You may want to speak with your insurance agent to review your coverage options to help decide what coverage is best for you.
Comprehensive insurance is only part of what most people consider full coverage. Instead, full coverage usually means comprehensive and collision carried together. Emergency roadside service, rental reimbursement and gap insurance are also considered add-ons in a full coverage package. Since everyone’s interpretation of full coverage car insurance is slightly different, it is best to review your coverage in detail with your agent to make sure you have the coverage you need that also fits your budget.
Whether you should file a comprehensive car insurance claim depends on several factors, including the cost of repairs and your deductible. If the cost of repairs is below your deductible, you can’t file a claim. In addition, if the damage amount exceeds your deductible by only a small amount, you’ll have to weigh the pros of filing a claim against the possibility of a rate increase.
If you carry comprehensive coverage on your vehicle, it generally extends to car rentals — up to your existing policy limits — as long as the rental is for personal use. If you don’t have comprehensive coverage, you can purchase a rental car insurance policy from a rental car company.