What is Comprehensive Coverage?
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According to the Insurance Information Institute, 810,400 vehicles were stolen in the United States in 2020. Fortunately, comprehensive auto insurance coverage provides a lifeline if your car is stolen and non-recoverable.
But what is comprehensive coverage? This guide will cover all your questions, including how it works, what it covers, and what it does not cover.
If your current auto insurance policy does not have comprehensive car insurance, now is a good time to compare quotes from top-rated auto insurance companies. Enter your ZIP code below to get started.
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What is Comprehensive Insurance?
Comprehensive insurance covers repairing or replacing your vehicle due to non-collision-related events outside your control, such as theft, vandalism, hail, and falling objects. It also covers theft by reimbursing you for your vehicle’s depreciated value minus your deductible.
Purchasing comprehensive coverage involves choosing that deductible and liability insurance limits – the maximum amount your insurance will put up towards a covered loss. However, most car insurance companies automatically set the comprehensive limits as your vehicle’s “actual cash value.”
How Does Comprehensive Insurance Work?
To explain how comprehensive coverage works, consider the following scenario of a vehicle damaged by a recent wildfire. Estimated auto repairs come out to $4,700. With a $500 deductible, your insurance company would pay the remaining $4,200.
Policyholders can select deductibles in increments as low as $500 and upwards of $2,000. But remember, the lower your deductible and the higher your car’s value, the more you pay.
What is the Difference Between Comprehensive and Collision Coverage?
Collision coverage covers damages to your vehicle caused by vehicle-to-vehicle, vehicle-to-object, and rollover accidents.
Comprehensive coverage covers non-collision-related damage to your vehicles, such as theft, natural disasters, and falling objects.
Both of them require set deductibles and coverage limits. In addition, many auto leasing and financing companies require that you carry both comprehensive and collision insurance to better preserve your vehicle’s value.
What Does Comprehensive Insurance Cover?
Comprehensive coverage covers non-collision damages to your vehicle, including but not limited to the following:
- Vehicle theft
- Damage from falling or flying objects like a tree branch
- Fire or explosion
- Tornadoes and windstorms
- Water or flood damage
- Riot or civil unrest
- Animal damage (e.g., deer)
What Does Comprehensive Insurance Not Cover?
Comprehensive insurance has the following exclusions:
- Lost personal possessions
- Damage caused by ride-sharing or delivery
- Intentional acts, such as spray paint tagging
- Mechanical breakdowns or car maintenance
- Freezing damage to the engine or other car parts
- Damage to other people’s property or bodily injuries
- Extreme events like nuclear accidents, war, and insurrection
- Normal wear and tear (e.g., worn upholstery or chipped paint)
- Tire wear or road damage (punctured or worn-down tires aren’t covered by insurance)
- Special vehicle modifications (unless you get an endorsement that says they’re covered)
How Much Does Comprehensive Insurance Cost?
According to the Insurance Information Institute, comprehensive insurance has an average annual cost of $159.72 or $13.31 per month.
The amount drivers pay for comprehensive coverage varies depending on several factors, including but not limited to the following:
- Age, make, and vehicle model. Newer, higher-priced, and electric vehicles cost more to insure.
- State of residence. Some states, such as Louisiana, Michigan, and Florida, are known for having costly car insurance. Other states like Maine, Iowa, and Idaho offer much cheaper rates.
- Address. If you live in a higher crime rate neighborhood, insurers might charge you more.
- Deductible. The deductible is the amount you pay out of pocket before your insurance company pays the rest — the lower your deductible, the higher your premiums.
- Liability limit. The higher your comprehensive liability limit, the higher your premiums.
- Claims history. Expect higher rates with one or more insurance claims on your record.
What is a Comprehensive Deductible?
A comprehensive deductible is the amount you pay before your auto insurance provider pays for the rest. For example, policyholders with vehicles with $2,000 worth of damage due to falling tree limbs with a $500 deductible must pay $500 out of pocket before the insurance covers the remaining $1,500.
What Deductible Should I Have For Comprehensive Insurance?
Policyholders can opt for deductible amounts as low as $100 or a higher deductible like $2,000.
Base your comprehensive coverage on your vehicle’s actual cash value (it’s okay to opt for lower deductibles for lower-value vehicles), monthly budget, and inclusion of any deductible add-ons. These deductible add-ons include vanishing deductible and “full glass” coverage. Full glass coverage promises no out-of-pocket expenses due to glass damage or broken windshields.
As already noted, the higher your deductible, the cheaper your auto insurance premium.
How Do I Buy Comprehensive Insurance Coverage?
You can purchase comprehensive coverage through your auto insurance provider.
Top-rated auto insurance companies like Liberty Mutual, Travelers Insurance, and Nationwide offer comprehensive insurance as an optional add-on to your existing car insurance policy. Note it is not required in all states, but your leasing or financing company may require it.
How Can I Save On Comprehensive Coverage?
There are several ways you can save on comprehensive coverage.
One way is to raise your comprehensive deductible. Increasing your comprehensive deductible from $500 to $1,000 will lower your premiums, although it will increase out-of-pocket costs paid to cover losses like broken windshields.
Another way to save on comprehensive coverage is to exclude it entirely. Although this may save you several hundred dollars a year on your premium, you still need to cover any comprehensive-related damages out of pocket. It’s possible that you could end up spending more than any savings you incurred.
Lastly, remember to shop around. Shop around and compare quotes from a minimum of three auto insurance providers to find the best comprehensive rates and terms for your financial situation.
Do I Need Comprehensive Coverage?
The decision to buy comprehensive coverage comes down to your vehicle’s value and the requirements by your leasing or financing company to cover damage.
Typically, the maximum comprehensive coverage paid out on a full coverage insurance policy is the actual cash value of your vehicle, which is its pre-collision value minus the deductible. However, most leasing and financing companies require comprehensive coverage to better preserve your vehicle’s value.
Your vehicle’s value also plays an important role. For example, suppose you drive an older SUV with a $1,500 cash value. Recent flooding forces your insurance company to declare it a total loss. Minus a $500 deductible, your provider cuts you a check for $1,000. The estimated $200 per year paid towards comprehensive coverage would be better put to use purchasing a new vehicle.
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