Comprehensive Insurance:
An auto insurance policy that covers damage to your vehicle resulting from events other than collisions is known as comprehensive insurance. If your car is totaled by a tornado, dented by a deer, spray-painted by a vandal, damaged by a break-in, or crushed by a collapsing garage, among other incidents, comprehensive insurance will pay for it.
IMPORTANT NOTES
- The purpose of comprehensive insurance is to cover repairs to your car that are not related to collisions.
- You might need to get both collision and comprehensive insurance if you finance the purchase of a car.
- It might not be financially prudent to purchase comprehensive coverage if you drive an older car that has already significantly lost value.
- Comprehensive insurance protects your vehicle against theft, vandalism, falling trees, animals, and natural disasters. It excludes coverage for harm to persons or other cars.
- Your premiums for comprehensive insurance may be reduced if you increase your deductibles.
How to Understand Full Insurance Coverage
An automobile insurance policy consists of three parts: liability, collision, and comprehensive insurance. Liability insurance is mandated by law in the majority of states, but comprehensive and collision coverage are not required if a person owns a car outright.
The auto loan provider may demand comprehensive insurance if the vehicle has been financed.
What is Covered by Comprehensive Insurance
The list of things that comprehensive insurance covers includes damages for things like:
- Animal contact, like running over a deer
- Natural catastrophes, such as hurricanes, floods, and earthquakes
- Flames
- Vandalism and riots
- Theft of vehicles or specific parts of vehicles
- shattered windshields
- Fallen items, such as hail, branches, or rocks
Comparing Collision and Comprehensive Insurance
Regardless of whether you choose to pay cash or with financing for your new vehicle, it may make financial sense to obtain comprehensive auto insurance. Regardless of any accident-related coverage you may have, comprehensive coverage can shield you from both minor and major losses brought on by events beyond your control.
The location of your residence may also influence when you should get comprehensive insurance. A person may want to get comprehensive insurance if they live in a stormy area that frequently receives hail or in a rural area where animal collisions are common. The same holds true for residents of areas of town with higher crime rates, where theft and break-ins are common occurrences.
When you have collision insurance, you’re covered in the event of a rollover, collision with another car, or collision with an object. It excludes coverage for weather-related damage, theft, and break-ins. You will have to get collision insurance if you are leasing a vehicle. When you are in an accident, collision insurance can help cover the cost of repairing your car and can also protect you against any damage caused by potholes in the road.
If you are in an accident, neither insurance will pay for your medical expenses or any damage to another person’s car.
Make sure to compare the prices offered by the top auto insurance providers when buying comprehensive coverage or any other kind of coverage.
How Much Does Comprehensive Insurance Cost?
Comprehensive covers damage to your vehicle resulting from events other than auto accidents. The average annual cost of comprehensive can vary depending on a number of factors, including the state in which you reside, from about $134 to almost twice that amount.
Drivers can select different deductibles for liability, collision, and comprehensive insurance depending on perceived risk levels in each of these categories. Liability insurance has no deductible.
A relatively high $1,000 deductible can be chosen to reduce premiums if a person believes they won’t file a comprehensive claim but doesn’t want to completely forgo comprehensive insurance. The cost of a comprehensive insurance policy increases with the vehicle’s cash value.
To estimate what you might pay for comprehensive coverage, it can be helpful to understand how insurance companies determine driver risk classes. The cost of your auto insurance, including comprehensive coverage, may vary depending on your residence, driving history, and level of coverage.
For instance, the average driver in Louisiana pays $1,495 a year for full auto insurance, making it the most expensive state to insure a vehicle in. Comparatively speaking, North Dakota is the least expensive state, with drivers paying an average of $692 annually for auto insurance.
Benefits and Drawbacks of Whole Life Insurance
Your financial security is ensured by comprehensive auto insurance against weather-related damage, theft, and natural disasters. If a tree falls on your car or your catalytic converter is stolen, you won’t have to pay for it out of pocket thanks to this insurance.
There are drawbacks. Your comprehensive insurance will not cover any damage if you are in an accident. Furthermore, if you buy comprehensive insurance in addition to collision insurance, the cost could be high. You may be able to save money by forgoing comprehensive coverage if your car is older and paid off, particularly if theft and weather-related incidents are not a concern in your area.
Advantages
- Comprehensive coverage protects you against theft, weather-related events, and other major things beyond your control.
- Comprehensive coverage often covers “unforeseen events” like break-ins or broken windshield wipers due to hail.
- If you own a new car and live in a high-crime area, comprehensive insurance will cover the damages caused by any break-ins or thefts.
Disadvantages
- Comprehensive insurance doesn’t cover damage caused by a collision.
- It may not be necessary to have for an older car with high mileage.
- Comprehensive insurance doesn’t cover anything personal stolen from your car.
- It doesn’t cover damage due to potholes.
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.
How Does Comprehensive Insurance Work?
Like other forms of auto insurance, comprehensive coverage pays for part of the loss if your car is damaged. The vehicle owner will also have to pay for part of the cost, known as the deductible. The insurance payment can be used for repairs, or for a new vehicle.
What Does Comprehensive Auto Insurance Cover?
Comprehensive auto insurance covers any damage to a car except for damage from a collision. This includes fire, weather, natural disasters, theft, vandalism, and natural hazards like deer strikes and falling limbs. It does not, however, cover injuries to passengers or third parties, nor does it pay for damage resulting from collisions with other cars.
What Is the Price of Comprehensive Auto Insurance?
A comprehensive insurance policy’s price will differ according to a number of factors, including the vehicle’s value, the zip code in which it is registered, and the driver’s prior insurance history. Prices can vary from roughly $134 to roughly twice that amount per year.
Does Pothole Damage Get Covered by Comprehensive Insurance?
No, damage to your car resulting from potholes in the road is not covered by comprehensive insurance. On the other hand, since collision insurance pays for any damages resulting from collisions with objects, it does.
The Final Word
You may believe that your risk of non-collision damage is low if you have paid for your car in full, you can’t afford comprehensive insurance, or you drive an older, low-value vehicle. You may decide not to get comprehensive insurance in this situation. You may also choose not to get comprehensive insurance if you would rather self-insure.
However, keep in mind that in this case, skipping comprehensive coverage could result in a hefty repair bill in the event that your vehicle is damaged. Therefore, in order to keep comprehensive coverage, compare the possible costs of repairs to the possible amounts you would have to pay in premiums or deductibles.
