In this article, we take a closer look at what you can expect from comprehensive coverage so that you can decide whether you’d like to add it to your car insurance policy.
How Does Comprehensive Cover Fit Into Car Insurance?
When you purchase car insurance, you will have the opportunity to select the coverage that suits your unique circumstances.
For example, if you live in Florida—which is known for its annual hurricane season—you will want to consider selecting cover that protects your car in case it’s damaged during a storm.
Each insurance provider offers different packages at different rates. However, the types of coverage they have available within these packages usually include the following:
1. Liability cover
This is the most basic car insurance that you can take out, and it’s a legal requirement in 49 states.
Its purpose is to protect everyone and everything—except your car and its contents. Liability insurance typically includes:
- Bodily injury liability coverage: If you’re involved in an accident, such as knocking a cyclist from their bicycle, then this will cover their medical bills. It will take care of other drivers, passengers, and pedestrians. However, it won’t assist you with your own injuries or cover the medical bills of your own passengers.
- Property damage liability coverage: If you lose control of your car and drive into your neighbor’s garage door, then liability cover will pay for the damages. It will make sure that your neighbor gets a replacement door and that their mailbox is repaired, but it won’t fix the damage to your bumper or headlights.
2. Collision cover
Collision insurance will take care of your car if you’re involved in an accident. This may include driving into a traffic light, hitting a fence, or being rear-ended by another car.
If you live in a state that doesn’t require liability coverage but you have collision cover, then your insurer will fix your car, but you will have to pay for the repair of the traffic light or fence.
3. Comprehensive cover
Finally, you can choose to include comprehensive auto insurance coverage in your policy. This protects you financially if your car is damaged as a result of anything other than a collision.
If we return to our first example, where you live in a hurricane state, comprehensive car insurance will take care of your vehicle’s repair or replacement cost if it’s knocked around by a storm or a tree branch falls on it.
Once the weather settles, you won’t have to pay for the storm damage costs out of your own pocket.
On top of liability, collision, and comprehensive coverage, your insurance provider may also offer additional optional coverage. This can include the following:
- Personal injury protection (PIP): Regardless of whose fault the accident was, this will cover the cost of your and your passengers’ injuries, as well as any long-term impact it may have on your lives, such as lost wages or child care.
- Uninsured or underinsured motorist coverage (UUMC): Some drivers aren’t thoroughly insured, which means that you may end up footing the bill—even if the accident wasn’t your fault. This coverage will make sure that you’re covered when this happens.
- Medical payments (MedPay): This is similar to PIP, but it’s a lot more limited. While it will cover you and you and your passengers for medical expenses, it will not take care of additional expenses, such as funeral cover.
When you reach out to an insurance provider, they will allow you to determine the extent to which you want to be covered.
You may choose to opt in for liability coverage because it’s a legal requirement in your state, comprehensive coverage because you have vehicle finance, or collision cover because you live in a high-accident area.
But you could decide to skip PIP and MedPay because your health insurance already covers these costs.
Comprehensive car insurance is often considered “full coverage” because of its name.
Key Point: Comprehensive Coverage Is Not Full Coverage
Comprehensive coverage is often used interchangeably with “full coverage” because these insurance product names seem similar in meaning.
However, it makes up only one-third of full coverage, which would also include liability coverage and collision coverage.
What Else Does Comprehensive Car Insurance Cover?
Besides natural disasters—such as hail, wind, floods, lightning, and earthquakes—comprehensive car insurance coverage also protects your vehicle from a range of other instances:
- Theft: If your parked car is missing from the parking lot where you left it, then it’s likely been stolen. Comprehensive coverage will assist you with costs if it’s not recovered. If your car is still where you left it, but your handbag has been stolen from the backseat, you will have to pay the replacement costs.
- Vandalism: Whether a rebellious teenager forcefully knocks down your side mirror or a group of criminals spray-paint graffiti on your doors, you may end up with a large bill to cover these costs. Luckily, this is also included in comprehensive insurance coverage.
- Fire and explosions: If you live in California, you may have encountered a wildfire or two. If your car has the misfortune of being parked too close to the blaze, it may be set on fire and you will be left with a charred carcass. This is also covered by your car insurance policy.
- Riots: Civil unrest, such as what happened during the 1992 Los Angeles riots—which led to $1 billion in property damages—can result in damages to your car. For example, rioters may accidentally knock your car during an altercation with police, or it may be set alight or be parked too close to where shots are fired.
- Windshield and glass damage: Even though your handbag isn’t covered by comprehensive insurance, you will still be covered for the window they break to reach it. This applies to any of your car windows, including your windshield and rear windows.
- Falling objects: The most common falling items include trees, pieces of bridges, rocks, and debris from buildings. On top of this, you may even be covered if a TV falls from an upstairs apartment or debris falls from space. Just check in with your policy provider to get the specifics.
- Damage caused by rodents: If you leave your car in your garage for a couple of weeks while you’re away, you may find it infested with rodents when you return. This can lead to a range of damages, such as chewed electrical wires. Luckily, comprehensive insurance covers these costs.
- Car accidents with animals: You may think that cars only hit deer in the movies. However, it’s a common phenomenon during deer season. In fact, you have a 1 in 116 chance of hitting a deer each year.
What Does Comprehensive Coverage Not Cover?
There are certain exclusions to comprehensive car insurance that you should be aware of. The following situations won’t be covered:
- General wear and tear that builds up: You will remain responsible for the general maintenance of your vehicle. For example, you need to check and, when necessary, replace your tires, brakes, windshield wipers, and belts.
- When an excluded driver takes the wheel: You can choose to exclude certain family members from your comprehensive insurance policy. However, if they were at the wheel for an incident that would usually be covered, your insurance company may refuse to pay out.
On top of this, anything that’s covered by liability coverage, collision coverage, PIP, MedPay, or UUMC will not be included in comprehensive coverage.
Why Is Comprehensive Coverage a Requirement for Vehicle Finance?
If you apply for vehicle finance, your lender may require you to take out comprehensive car insurance. This will form part of your credit agreement, which means that you will have to agree to it to receive the funding for your car.
Lenders insist on this for surety. Vehicle finance is considered secured debt, which means that it’s linked to an asset—in this case, your car.
If you neglect your loan repayments, your lender needs to be certain that they can repossess an intact vehicle to make up for your debt.
For example, imagine you miss several installments, and shortly thereafter your car is stolen.
If you have comprehensive coverage in place, your lender will be able to cancel your credit agreement and claim their losses from your auto coverage.
What Are the Comprehensive Coverage Limits and Deductibles?
1. Annual deductible
Your deductible is the amount that you will pay toward your vehicle’s damages before your car insurance provider steps in.
Let’s say that your windshield has a bulls-eye crack after a small stone ricocheted from a truck and pierced right through it.
When you take it to the repair shop, you find out that it will cost $400 to replace. If your annual deductible is $300, then you will first have to pay this before your insurer will step in to cover their percentage of the remaining amount.
It’s important to note that you will have different deductibles for each of your coverage types.
In other words, if you’ve collided with another car right after the stone hit your windshield and your bumper was damaged, then you would have to pay a separate deductible for your collision coverage to kick in.
You’re allowed to choose your own deductible. Each provider will have different options available, and they usually range between $100 and $2,000.
2. Annual limit
Besides considering your deductible, you also need to be aware of your annual coverage limit.
Comprehensive car insurance usually has a maximum amount that you can claim from them within a year. This cap is often set at the actual cash value of your vehicle.
Key Point: What Does “Actual Cash Value” Refer To?
This is the amount of money that it will cost to replace your car, minus the value that it’s lost over time from general wear and tear. When you make a claim, your insurance provider will hire a third party to determine this amount.
If we use the example from above and assume that your car’s actual cash value is $10,000, then your annual limit will decrease to $9,900 because your insurer would have had to pay $100 for your windshield.
If you then get into a car accident that costs $12,000, your insurer will only pay $9,900 and you will have to cover the remaining $2,100.
What Are the Benefits and Limitations of Comprehensive Coverage?
Comprehensive car insurance prepares you for the unexpected. It will step in when an unusual event happens, such as a baseball falling out a window and denting your car’s roof.
If you have a new vehicle, comprehensive coverage will save you a lot of money. This is because it will be more expensive to fix a new car compared to an older one, and you would be more concerned with wanting to retain your new car’s value.
On the other hand, it’s an expensive addition to your liability coverage. If you’re working with a strict budget, you may be hesitant to add comprehensive coverage—especially if you have an older vehicle.
Get the Most Affordable Comprehensive Coverage through CheapInsurance.com
Your location plays a big role in whether you should take out comprehensive car insurance.
If you live in an area that’s prone to a certain natural disaster, then you should definitely consider adding it to your insurance policy.
Similarly, if you live in a city where the likelihood of riots, fires, explosions, vandalism, and theft is higher, then it might be a good idea to purchase comprehensive coverage.
However, even small towns have rodents, falling trees, and old bridges that may drop debris onto your car. You should, therefore, take some time to decide what’s best for your circumstances.
Another factor to consider is the value of your car. As it depreciates over the years, the value you will get from comprehensive coverage will decrease. This is because the amount you’re covered for will be lower every year, while your premiums may remain the same.
Overall, comprehensive cover will ensure that you’re taken care of during unexpected situations. If you’d like to make sure you’re prepared for anything, then this is the right cover for you.
If you’d like to get a comprehensive or car insurance quote, simply enter your zip code at the top of this page.
Our online quote finder will quickly connect you with quotes from different insurance providers. At CheapInsurance.com, we’ve got you covered!