What Is Comprehensive Auto Insurance?

With so many different types of insurance available, deductibles to consider, and rates to compare, finding the right insurance for your vehicle can appear to be as difficult as learning to play the accordion. A perfect example is defining what comprehensive insurance is, and, more specifically, comprehensive car insurance.

If you are unfamiliar with insurance terminology, the mere mention of comprehensive insurance as a separate type of insurance can have alarming connotations because it may imply that your current coverage is insufficient to cover every eventuality.

The truth is that if you only have collision insurance and the liability auto policy required by law in your state, there are limitations to the types of claims you can file with your insurance company in the event of an accident.

If this sounds perplexing to you, you're not alone. That is why we have compiled the best information to answer any questions you may have about comprehensive auto insurance.

What Does Comprehensive Insurance Cover?

As any car owner with the state's minimum insurance coverage will tell you after having a claim for hail damage denied, your standard car insurance policy may not always suffice. Comprehensive car insurance protects your finances in the event that you are involved in an accident caused by any number of factors.

Comprehensive insurance covers damage to your vehicle that is not the result of a collision. And there's a long list of things that can damage your car that aren't caused by a traffic accident.

Here are some examples of the types of damage that comprehensive insurance will cover:

Falling or flying objects – The most common types are fallen trees and airborne debris from hurricanes and tornadoes.
Hail – Depending on where you live in the United States, hail can cause havoc on your car and cost a lot of money to repair.
Flood – Again, geography plays a significant role here, but in many parts of the United States, flood damage poses a significant risk to your car and home.
Vandalism – Your state minimum will not cover vandalism damage to your car, whether it is a key scratch in a parking lot or burst windows from a riot.
Earthquakes – If you live in an earthquake-prone area, you should make sure your insurance covers damage from tremors to "The Big One."
Fire – This includes engine, garage, arson and car accident fires. In addition, this extends to any damage caused by wildfires.
Theft – If you really love your car or can't afford to lose it, comprehensive auto insurance will definitely reimburse you.
Hitting Animals – Collisions with animals are treated differently than collisions with other vehicles or roadway features.

What Does Comprehensive Insurance Mean?

In a nutshell, comprehensive insurance protects you and your vehicle in a variety of situations that do not involve an actual accident, or when you are liable for damages to other people and/or their property.

Comprehensive coverage is typically included in a car insurance package that also includes collision and liability coverage. Collision insurance pays for damage caused by an actual collision in which you are at fault, whereas liability insurance protects you from the risk of being sued.

When these insurance packages are combined, they form what is known as full coverage car insurance, which means you are covered for the majority of foreseeable events.

It is critical to understand that comprehensive and full coverage do not mean the same thing.

So Who Needs Comprehensive Insurance?

Although comprehensive car insurance is not required by law, your lender may require it if you are still paying off your car or leasing one. If, on the other hand, you own your vehicle outright, you'll need to decide whether comprehensive insurance is worth the extra cost and how much coverage you need.

If you do not have enough savings to replace your car if it is deemed a total loss, comprehensive coverage is essential. However, if repairing or replacing your vehicle would not be a financial hardship, you may not require it.

Our advice is that you will almost certainly want it in most cases.

If you have an old car that is worth less than $1,000, comprehensive insurance may not be worth the money. This is because the total amount you would receive from a claim would most likely be less than your premium.

The actual cash value of your vehicle at the time of damage is the maximum amount you can receive from a comprehensive claim payout.

You can also get comprehensive coverage for your motorcycle.

How Much Does Comprehensive Cost?

The amount you will pay for it is determined by a number of factors, including your age, geographic location, claims history, and car value. These are the same factors that influence any other auto insurance policy.

According to the National Association of Insurance Commissioners, the average annual cost is only $132.

When shopping for insurance, keep in mind that not having a comprehensive policy may cost you money in the future due to the wide range of damage it covers.

Things to Consider: Your Deductible

Another important consideration is your deductible, or the amount you agree to pay when you file a claim. The most common deductibles are $200, $500, and $1,000, with the higher the deductible, the lower the overall monthly premium.

Choosing a higher deductible, on the other hand, may come at a cost. Always be honest with yourself about how much money you can afford to pay out of pocket if you have an unexpected claim, and adjust your deductible accordingly.