What is Comprehensive Coverage?
Not every car brought into a repair shop was damaged because of a collision. You may find your car vandalized when returning to the parking lot where you left. Or, maybe there was inclement weather, perhaps a tree branch or something else fell on your car. These are cases where collision insurance and liability coverage won’t cover any personal or auto damages. For auto damage that just couldn’t be helped or was out of your control, comprehensive insurance is there for you.
Comprehensive coverage lives up to its alternate name, “other than collision coverage,” by insuring you in the event of an accident that wasn’t caused by a collision with another driver. A comprehensive policy is an auto insurance add-on that is optional, much like collision. The only required auto insurance is liability coverage, which is because of state laws. Paying auto and personal damages to the other driver in a car accident that you caused is a legally required practice. It doesn’t matter to the government that your own vehicle is covered. Comprehensive insurance is one of the two coverages available to fully insure yourself and your car.
The main purpose of having comprehensive insurance is to help cover only the damages sustained in a nature-related incident with no human error. However, it’s important to know the limits of your insurance, the cost, and whether or not adding comprehensive coverage to your auto policy is a wise investment.
What does comprehensive insurance cover?
Comprehensive insurance covers damage to your vehicle in the event you should find it damaged after leaving it in a parking lot (let’s say) for a period of time. Some insurance companies would label these damages as “acts of nature” or “acts of God.” Outside of that, if your car was criminally targeted, you’d also be covered by comprehensive insurance.
Comprehensive coverage will pay for your car damages if you experience:
- Inclement weather - Weather, natural disasters, and anything else caused by nature that damages your car is covered by comprehensive insurance. Areas affected by hurricanes and tornadoes are a good place to invest in that coverage.
- Vandalism/theft - Damage caused to your car by criminal means, like targeted vandalism, is an area covered by comprehensive insurance. If your car is stolen, then your policy will pay out the value of your car prior to the accident to help replace it.
- Falling/flying object - If a tree branch or street light were to fall on your car, it counts as a comprehensive accident. It’s purely circumstantial, and gravity is technically a force of nature that could cause damage to your car.
- Civil disturbance - Your parked car is covered if it’s damaged or totaled while parked because of a riot or any other disturbance in the peace. This falls under a similar category as vandalism.
- Collision with an animal - Larger animals like deers can cause significant damage to your car if you hit them. Big animals are the kind you need to stop for and let them cross the road. Damage caused by accidents like this is covered by comprehensive coverage.
- Broken or cracked windshield - A cracked windshield is covered by your auto insurance depending on what caused the break in the first place. If your windshield was hit by a flying object like gravel from the car in front of you, that’s a comprehensive case.
What comprehensive insurance doesn’t cover
Comprehensive coverage is limited. For instance, if the damage was caused by a collision with another driver, then it won’t be covered. You would need to have liability or collision coverage. There are a couple of specific cases where comprehensive insurance won’t cover you.
These could include:
- Car collision - As is stressed, comprehensive insurance doesn’t cover you when you have an accident with another driver regardless of who is at fault. Collisions with stationary objects like a lamp post or guard rail are also not covered in comprehensive insurance.
- Medical costs - Any injury involved in the comprehensive situation is not covered; you would be responsible for any medical costs. Another part of your policy, be it liability or collision, would cover that instead.
- Legal expenses - Similar to medical fees, any legal or court-related expenses are not covered by a comprehensive plan.
- Towing fees - Comprehensive insurance does cover the cost of having your car towed if it breaks down. However, sustaining a flat tire or a dead battery isn’t a comprehensive situation.
- Substitute car - If you’re given a temporary car after your own is totaled, it won’t be covered for the time you have it.
- Stolen items - If your car is broken into and some of your belongings are taken, the damage to your car is covered but not the value of the stolen items.
When would I need comprehensive insurance added to my car insurance?
Comprehensive insurance isn’t required and is completely optional. The only time you’ll be required to carry it is if you have a loan on your car or you lease it. The leasing company is the owner of the car and not you, so they have their own insurance requirements for their cars. The leasing company may also require collision in addition to comprehensive –which is the full coverage.
Ideally, if you can’t pay for your auto repairs out of pocket, then you should buy comprehensive insurance. The annual cost isn’t that high, and it can easily save you in the long run. Even if you can afford the cost of repairs, don’t rule the possibility of comprehensive insurance out just yet. There are a couple more things to think about. Like, how much not buying coverage will save you annually, or what the odds are that you’ll require a repair.
On average, a driver who doesn’t opt for comprehensive insurance can save up to $200 in a year, assuming that nothing happens to their car. However, the area you live in may change that. Drivers living in areas with high crime rates or a history of inclement weather often purchase comprehensive insurance for this reason.
How much you pay for your insurance is judged based on personal things such as your driving record. There are several other factors like car type and value, which we’ll get into when discussing pricing specifically, and you should always keep it in mind when looking at insurance.
How much does comprehensive insurance cost?
The average cost of comprehensive insurance is $130 to $160 annually. It’s among the cheapest types of car insurance. The cost of your policy is calculated based on your car’s actual cash value or ACV. This is the present value or how much it would cost to replace if it was totaled, not the amount you purchased it for. When you file a claim, the insurance payout for repairs you would receive is equal to this value.
Because of this, a cheaper car would be cheaper to insure, but the payout wouldn’t be as large as you’d hoped in the event of a comprehensive accident. Similar to collision insurance, a good rule of thumb is to not insure a car with an ACV of less than $10,000, as the money involved wouldn’t be worth it. Car type and make are things that you can look out for. Typically, new, higher-tech cars cost a lot more to insure. It’s good that it will have comprehensive coverage, but your premiums may be above the average.
Other things that can be used to calculate your comprehensive coverage cost are your driving record, personal details such as your age, and the deductible amount you chose to receive on your policy.
How do deductibles work with comprehensive insurance?
Liability coverage doesn’t offer deductibles, but comprehensive does. In any case, a deductible is the amount of money you pay on your most recently filed claim before your insurance plan kicks in. A comprehensive deductible can average between $100 to $1,000, but can also go up to $2,500. You have the ability to customize and set it to whatever you like. Let’s say that you are charged $5,000 for auto repairs in a comprehensive situation, and you have $1,000. That’s all you would pay while the insurance company covers the remaining $4,000. Having a high deductible means you do have to pay more, but your monthly rates will be lower. A lower deductible would result in the inverse.
Important things to remember when looking at comprehensive insurance
Shopping for comprehensive insurance is like shopping around for any other type of auto coverage. It’s not exclusive and readily available at auto insurance companies. At Insurance Navy, we offer the customizable deductible with our comprehensive coverage. We’re also known to bundle it with liability and collision, so you’d be fully covered at a discounted price.
Whichever amount of coverage you choose when looking at comprehensive insurance, you should always keep in mind:
- If you lease a car - Since leasing companies require full insurance coverage on their vehicles, you may be required to carry comprehensive insurance as well as liability and collision.
- Your car’s value - If your car’s value is less than your insurance premium or what you would pay, then it may not be worth it. Remember, if you bought your car for over $10,000, then comprehensive insurance would be the smart move.
- Your place of residence - The higher the population, the more chance there is of being a crime rate. Since comprehensive insurance covers incidents of this nature, it may seem like a smart move. However, this doesn’t determine the cost of your insurance.
When would I be able to drop my comprehensive insurance?
A good way to tell that you may not need comprehensive insurance is if you can afford the repairs on your damaged car. In the worst-case set, you can afford to fully replace your car if it gets totaled. Another reason was perhaps that your car has decreased in value over time. At that point, coverage would be expensive, and the insurance payout you receive won’t be that much.
Remember that your car’s ACV is directly proportionate to your insurance cost. Another rule of thumb when it comes to how much you’re paying for insurance is to drop it when your rates are at least 10% of your car’s value. The last thing to keep in mind is how often you feel that you’ll file comprehensive claims.
What happens if I choose to forego comprehensive insurance?
Perhaps it’s not in your budget to take on another insurance policy, or you drive an older car with a value under $10,000. However, consider that comprehensive insurance is one of the most low-cost auto insurance policies in comparison to others. It’s for a good investment too. Returning to your car to find it damaged or stolen can result in a really steep repair and replacement costs. Around 76% of drivers in the country purchase comprehensive insurance. Truthfully, that is the only trouble you can get into when foregoing comprehensive coverage.
Let’s say that you live in an area with a lot of hurricanes and storms. While you would be covered under comprehensive insurance, you would have to file numerous claims since every storm risks damage to your car. At that point, it would be best to pass up on comprehensive coverage. Every claim affects your premiums.
Insurance Navy specializes in low-cost auto insurance and finding the best coverage match for you. Contact our agents today to get the comprehensive insurance you need.