Car insurance is a package of different types of coverages. It's sometimes referred to as “full coverage” when your policy has a provision in place to address just about any eventuality. Some types of coverages are required by law, such as liability coverage. Your policy will pay the other driver for damages if you’re involved in an accident that’s determined to be your fault.
Other components are elective or optional. They protect you and your finances in the event that you experience a crisis involving loss of or damage to your car.
Comprehensive car insurance is one of the optional coverages. It’s not required by law in any state, although your lender will most likely require that you carry it if you finance or lease your vehicle. It repairs or replaces your car if it’s dinged or totaled, depending on the cause of the damage.
What Does Comprehensive Insurance Cover?
Comprehensive car insurance covers damage to or loss of your vehicle that occurs due to an event that’s beyond your control.
It pays if someone steals your car or if a bomb falls on it during a terrorist attack, but the event doesn’t have to be that serious. You can make an insurance claim due to damage or loss resulting from vandalism, civil unrest, fire, weather events like flooding or a hurricane, or animals – either one that you've hit or if an elk decides to drive its antlers through your window because it's having a bad day.
You won’t be covered against any of these things without comprehensive coverage on your car insurance policy.
What Doesn’t Comprehensive Insurance Cover?
The key issue with comprehensive insurance coverage is that you have no control over the event that's damaged your car. With the exception of accidents with animals, comprehensive insurance won’t pay for damages or loss if you’re behind the wheel and your car is moving at the time. These events fall under the umbrella of collision insurance. In fact, comprehensive coverage is sometimes referred to as “other than collision” coverage.
Comprehensive auto insurance won't cover normal wear and tear. It won’t step in if you live in the Arizona desert and the relentless sun bleaches your car’s paint to white, or if your brakes wear out over time. It won’t pay for items stolen from your car, even if they happen to be inside when someone steals the vehicle. It won’t pay medical claims if anyone happens to be inside your car when an insured event occurs and they’re injured.
There Are Coverage Limits
Like all insurance coverages, some limits apply to comprehensive car insurance as well. Your insurance company won’t foot the bill for a brand new car if yours is destroyed due to some circumstances that couldn’t have been prevented. You’ll receive the “actual cash value” of your vehicle instead if it’s destroyed or it's stolen and unrecoverable, or even if it suffers damage to such an extent that repairing it would cost more than its actual cash value.
Actual cash value isn’t what it costs you to get back on the road again. It’s what your car is reasonably worth after depreciation has set in. You might have paid $30,000 for your vehicle five years ago, but it’s not worth that much today. Actual cash value is the price for which you might have been able to sell the vehicle before the damage occurred.
And as for that elk that crashed its antlers through your window, that damage might fall through the cracks as well, simply because it involves glass. Some insurers require that you “add on” glass coverage because it’s one of the most common types of damage. This essentially means adding windshield and glass repair to your comprehensive coverage for an additional premium.
Read More: Market Value vs. Actual Cash Value
You’ll Have Separate Deductibles
Insurance coverages aren’t one-deductible-for-all. Each type of coverage typically has its own deductible – an amount you have to pay personally toward the claim you're making. The idea is that your insurer wants you to share in the risk.
For example, your insurance company will pay only $9,500 toward replacing your $30,000 car if its actual cash value is $10,000 five years after you bought it, and if you have a $500 insurance deductible. That first $500 is on you, and it's subtracted from your claim. You have to contribute the amount of your deductible toward repairs or a new purchase.
A comprehensive deductible can range from a couple of hundred dollars to $1,000 or more. You do get to select the amount, however. It’s not assigned to you.
How Much Will This Cost You?
Comprehensive coverage is an add-on to your policy, so the cost is added to your regular monthly premium. It might be as little as an extra $100 a month or so in some states, but it can ratchet way up, closer to $300 in other states, such as Wyoming where the odds of encountering an angry elk or suffering ice damage might be more significant.
Your location matters, as does the make and model of your car. Pricey vehicles cost more to repair, so you pay a higher premium. To-die-for sports cars are more likely to be stolen than small family sedans, so you pay more to insure them, too. Parking on a street or in a public lot carries a greater potential for damage than if you safely nestle your vehicle in a garage – or even your driveway – when you’re not using it.
Then there are personal factors: your credit score, your history of making claims, and even your age. Premiums tend to go up after you make a claim.
You do have some control over the portion of your monthly premium that’s represented by your comprehensive coverage, however. You are rewarded with a lower premium if you sign up for a higher deductible and you’re willing to dig more deeply into your own bank account in the event your car is damaged or lost. Likewise, you pay a higher premium if you elect a minimal deductible.
Do You Need Comprehensive Coverage?
You might want to carry both comprehensive coverage and collision coverage so you know you’re covered for any eventuality, particularly if you have an expensive car. In fact, some insurers won’t sell you just comprehensive coverage, and they require that you also carry collision insurance. They bundle these two optional coverages together, but this can drive your premiums up nonetheless because you’re paying for two different types of insurance add-ons rather than one.
On the other hand, it might not be worth carrying this type of coverage if your vehicle’s actual cash value is negligible. You’d be paying premiums for not much of a downside to replace it, assuming you feel comfortable that you could lay your hands on the necessary cash in an emergency.
Another factor to consider is how likely your car is to experience theft or damage. Your risk would be minimal if you work from home and your wheels are tucked into your garage all day. It would be greater if you live in a rural area where animal damage is possible or where weather patterns can be fierce.
- GEICO: Comprehensive Coverage
- Experian: What Is Comprehensive Car Insurance?
- Liberty Mutual Insurance: What Is Comprehensive Insurance Coverage?
- Dave Ramsey/Ramsey Solutions: What Is Comprehensive Car Insurance?
- Car and Driver: What Is Comprehensive Car Insurance?
- Insurance Information Institute: Auto Insurance Basics – Understanding Your Coverage
- Allstate. "What Is Comprehensive Insurance?" Accessed April 19, 2020.
Beverly Bird has been writing professionally for over 30 years. She is also a paralegal, specializing in areas of personal finance, bankruptcy and estate law. She writes as the tax expert for The Balance.