What is Comprehensive Insurance?
Comprehensive insurance coverage, also known as “other than collision” coverage, is a type of car insurance that can help pay the cost of damage to your car for non-collision-related claims. For example, it can help pay for damage caused by hail, theft, fire, or hitting an animal.
It’s important to keep in mind that this coverage is optional. You have to add it on top of other coverage you may have, like liability insurance. But, if you’re financing or leasing your car, your lender will likely require it.
Most drivers benefit from this coverage, and you can learn more by getting a quote from the AARP® Auto Insurance Program from The Hartford today.
There are several factors you need to think about when you’re looking at your auto insurance. We think of auto insurance as a way to protect us if we get into an accident, but what about if your vehicle is damaged without actually being involved in an auto accident?
Like if a tree branch falls on your parked car, your windshield gets a chip in the glass or a deer suddenly runs out in front of your car while you’re driving, then what? Your comprehensive insurance covers you and will help get things back to normal.
What does comprehensive insurance cover?
Collision insurance helps you fix or replace your vehicle when you get into a car accident. However, collision insurance doesn’t cover the other things that can inflict damage on your car.
That’s where a comprehensive insurance policy can protect you. Here’s a list of some of the things a comprehensive policy would cover:
- Fire and explosions
- Vandalism, such as when someone keys or tags your car
- Theft-related damage, for example, damage caused when breaking into the vehicle
- Storms, such as wind, hail, tornadoes, floods, earthquakes and hurricanes
- Falling objects such as a tree limb falling on a parked car, or if someone’s hauling materials and something falls and lands on your car
- Windshield cracks and chips
- Animal-related damage, such as damaged caused by hitting a deer that leaps into the road
Comprehensive insurance can also make life easier after your vehicle has been damaged. At ERIE, car rental coverage is available in the event of a comprehensive loss.
How Much Does Comprehensive Insurance Cost?
According to the Insurance Information Institute, the average car insurance cost per year for comprehensive car insurance in the U.S. was about $170 in 2018, which is the most recent year that data is available. Comprehensive car insurance rates can vary, and some factors that influence the cost are:
- Driving history
- Car’s model and age
- Deductible amount
If you plan to buy comprehensive auto insurance coverage, choosing a higher deductible can help lower the cost of your premium. However, it also means you’ll have to pay more out-of-pocket if you have an accident.
In most cases, you’ll want to base your deductible choice on your car’s actual cash value (ACV). For damaged cards, our comprehensive insurance coverage will help pay an amount up to your ACV to either repair or replace it. If the cost of repairs exceeds your car’s ACV, it’s totaled.
In this case, we’ll pay the sum of its ACV to you to help replace it. When deciding how much car insurance you need, it’s important to think about the ACV of your vehicle. To learn more, get a car insurance quote for comprehensive coverage today.
What does comprehensive insurance not cover?
- Damages caused by a collision
- Damages caused to another person’s vehicle
- Damages caused by running into a stationary object, such as a tree or building
- Medical expenses incurred by you or other drivers or passengers
What is comprehensive vs. collision?
There’s an easy way to understand the differences between the two kinds of coverage. It comes down to the question of what happened to the car to damage it?
Collision insurance covers you when your car is in an accident, whether it’s with another vehicle or an inanimate object, such as a guardrail, pothole, tree, or building. It depends on the accident, of course, but in many instances, it insures you against things within your control.
It can make sense to have comprehensive car insurance if you’re buying a brand-new car, regardless of whether you finance it or pay cash. Comprehensive coverage can protect you against minor and major damage caused by things beyond your control, regardless of what coverage you may have that extends to accidents.
Where you live can also play a part in your decision on when to have comprehensive coverage. If a person lives in a rural area where collisions with animals are common or in a stormy area that often gets hail, they might want to purchase comprehensive insurance.
The same is true if a person lives in a higher-crime part of town where break-ins and theft occur regularly.
Collision insurance protects you in the event of a single-car rollover, a collision with another vehicle, or a collision with an object. It does not cover break-ins or thefts, or weather-related damage. If you lease a car, you’ll be required to purchase collision insurance.
Collision insurance comes in handy when you get into an accident to help pay for your vehicle’s repair, and it covers any damage to your car due to potholes in the road.
Neither insurance will cover medical bills from an accident or damage to another person’s vehicle if you are in an accident.
Comprehensive insurance covers you when things other than a car accident damage your cars, such as a falling tree branch, a break-in, or hail damage from a storm. These things are considered beyond your control.
Many lenders require drivers to carry both collision and comprehensive on their policies. When the car is owned outright, these coverages can be optional*.
Does comprehensive insurance cover theft?
Car theft can mean different things. These are the kinds of things that are covered under a comprehensive insurance policy.
- A car break-in: Comprehensive insurance can help you cover your expenses for fixing the broken lock or smashed window, as well as damaged or stolen fixtures on your car when it’s vandalized or broken into.
- Stolen car: If your vehicle is never recovered, your collision insurance will cover the actual cash value of your car, minus the deductible. When your vehicle is stolen, report it to the police as well as your insurance company as soon as possible.
- What about personal items? If you have comprehensive or collision coverage from ERIE, your policy may come with some coverage for items stolen from your car. Check your policy or contact your ERIE agent to learn more.
When is comprehensive insurance required?
If you have a car loan, your lender may require you to take out comprehensive and collision insurance. That makes sense: if you’re financially shielded, you’re more likely to make on-time loan payments.
Do I need comprehensive coverage for my older or paid-off car?
Once your car is paid off, having comprehensive coverage is optional.
As your car gets older, the overall replacement cost of your car can be a factor in whether you want to continue. Here’s one measure offered by the Insurance Information Institute: Multiply your premium for comprehensive coverage by 10.
If the value of the car is worth less than that total, it may be a good time to drop comprehensive. (And put the savings toward your emergency fund.)
Your deductible is the amount you pay on your claim before your auto coverage kicks in. Once you pay that, your car insurance will cover the rest of your costs, up to your limit. Let’s say your car is damaged and will cost $6,000 to repair, and your deductible is $1,000.
You’ll only pay out of pocket for the $1,000 deductible, and then your insurance company will pay the other $5,000 on your comprehensive claim. When you buy comprehensive insurance, you’ll choose a deductible amount.
Example of Comprehensive Insurance
Comprehensive insurance works similar to any other type of auto insurance if you need to file a claim. But if you’ve never had to do so, it helps to have an illustration, so you know what to expect. Here’s an example of how comprehensive insurance works if a driver files a claim for vehicle damages.
Say someone drives a Honda Accord worth $10,000 with a $1,000 comprehensive deductible. If a tornado destroys the car, the driver will receive $9,000 from the insurance company.
If they don’t have comprehensive coverage and a tornado destroys the vehicle, the collision and liability portions of the policy won’t cover the damage. The driver will be responsible for the entire $10,000 loss.
A driver might have to get a loan to purchase a replacement vehicle or settle for something less expensive if they don’t have $10,000 to spend on an equivalent replacement.
Seeing an example of comprehensive insurance in action can offer some perspective on how valuable it can be if your car is damaged. If you’re leaning more toward the “when to drop comprehensive insurance” side, it’s helpful to know how much damages may cost you to repair out of pocket.
The Bottom Line
If you’ve paid for your vehicle in full and you can’t afford comprehensive insurance, or you own an older automobile that doesn’t have much value, you might feel that you’re at low risk of non-collision damage.
In this case, you might choose to skip comprehensive insurance. Or, if you prefer to self-insure, then you might also decide not to purchase comprehensive insurance.
But remember that, in this instance, forgoing comprehensive coverage means you could end up with a steep repair bill if your car is damaged. So weigh the cost of any potential repairs against what you might pay in terms of premiums or deductibles to maintain comprehensive coverage.
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