What is comprehensive coverage?

By Insurance.com Posted : 01/01/2011

Comprehensive coverage is optional car insurance protection. It covers damage to your vehicle from non-collision mishaps involving your vehicle, such as flood, fire, earthquakes, hail, animals, birds, falling trees and vandalism.

Of particular note, comprehensive coverage is the portion of car insurance protection that pays out if your car is stolen. Typically, it also covers windshield repair or replacement.

Unless excluded, comprehensive coverage pays you a check for your losses – less the comprehensive deductible – when such damages occur.

If the vehicle is leased or financed, comprehensive coverage is almost always required by the financing company.

Comprehensive coverage vs collision

Collision coverage applies if your vehicle is damaged because you've hit another car, you were struck by another car, you hit any non-living object or you flipped your vehicle. Otherwise, the damage is likely to fall under comprehensive coverage.

When a claim is made, the auto insurance company pays for damages, less your comprehensive deductible. However, exclusions apply to comprehensive coverage. For example, your comprehensive coverage will not cover the following:

  • Intentional damage done to your vehicle by you or family members.
  • Theft of personal belongings stored inside a vehicle. (Your homeowners insurance or renters insurance provides this coverage.)
  • Damage resulting from improper vehicle maintenance.

You can get a full list of exclusions and limitations before purchasing a policy, and it is worthwhile to review that list beforehand.

Comprehensive deductible tips

A comprehensive deductible is the out-of-pocket cost you are financially responsible for before auto insurance coverage begins. Typically, a comprehensive deductible ranges from $100 to $300, but is also available at higher levels, according to the Insurance Information Institute (III).

As a general rule of thumb, your comprehensive deductible should be set as high as you feel comfortable paying out of pocket. Carrying a higher comprehensive deductible will lower your premium costs.

Many experts recommend dropping comprehensive coverage altogether as your car ages. One rule of thumb is to drop coverage once the cost of collision and comprehensive insurance exceeds 10 percent of the payout you would get from your insurer if your car was stolen or totaled.

Another way to evaluate whether you need comprehensive coverage is a simpler calculation. According to Insurance.com, determine the value of your vehicle on Edmunds.com, Kelley Blue Book or one of the other reputable auto-pricing websites. Then, consider dropping collision coverage first and comprehensive coverage second if your vehicle is worth $5,000 or less.

If you do decide to drop comprehensive coverage, it is important to be more proactive than ever making small repairs so your car remains safe.

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