You might have heard the horror stories of people whose cars were broken into in their driveways or flooded in a big storm. Comprehensive car insurance typically covers what collision or liability car insurance doesn’t: damage from an incident that’s not a collision. Comprehensive car insurance will cover the costs if your windshield is broken or a tree falls on your car. Below, you’ll find the answer to the question, what is comprehensive car insurance? You’ll also find key considerations to decide if you need comprehensive insurance and how much you should get.
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Understanding comprehensive car insurance
Comprehensive car insurance is sometimes called non-collision or “other than collision” coverage because it covers issues like fire, vandalism, or other damage that occurs when the vehicle isn’t in a collision, like damage from flooding, hailstorms, or fallen trees. The notable exception to the no-collision part of comprehensive car insurance? If you have a run-in with wildlife, it’s usually covered under this type of insurance.
Car owners are generally not required to have comprehensive car insurance if they purchase the vehicle with cash. However, if you finance the vehicle with an auto loan or lease the vehicle, especially if you lease a car with bad credit, you will usually be required to have comprehensive car insurance. On the other hand, purchasing comprehensive car insurance may not make sense if you drive an older vehicle that has already lost significant value.
Comprehensive vs. full coverage car insurance
Full coverage car insurance is the solution if you want all-in-one vehicle insurance. Full coverage car insurance usually combines liability insurance, collision coverage, and comprehensive coverage. This option is best for newer vehicles or those who want the convenience of knowing their vehicle is protected in case of any issue.
In most cases, if you want comprehensive insurance, full coverage car insurance is what you’re actually looking for. However, in some cases, it could make more financial sense to purchase these plans separately.
Comprehensive vs. liability car insurance
Liability car insurance protects you from liability in case you are involved in a car accident or accidentally harm another driver or vehicle. This financial protection means you can cover the repair, bodily injury, and medical expenses of those involved in the accident. Liability coverage insurance requirements are regulated at the state level in the U.S., but this coverage is mandatory in almost every state.
While comprehensive car insurance protects you from expenses related to damage to your vehicle, liability car insurance protects you from financial responsibility in case you accidentally cause harm to others.
Comprehensive vs. collision car coverage
Collision insurance covers expenses related to collisions, including a collision with an object, another vehicle, or a single-car rollover. It will not cover weather-related damage, natural disasters, or vandalism. That’s where comprehensive car insurance comes in. However, neither comprehensive nor collision car insurance covers another person’s vehicle if you are in an accident. It also doesn’t cover medical bills from an accident.
Collision insurance is important to protect your vehicle from accidents beyond your control. Comprehensive insurance makes sense if you’re in a rural area or have a newer vehicle that could lose significant value from non-collision-related damage.
Benefits of comprehensive car insurance
The benefits of comprehensive car insurance are numerous. Key reasons to consider this type of car insurance include:
- Protection against non-accident-related damage
- Recovery of value in case of theft or vandalism
- Repair or replace your vehicle in case of natural disasters
- Offers protection in extreme or unusual weather events, like hail damage
- Offers peace of mind if you live in a high-crime area
- Offers protection against unforeseen or unexpected events
How much is comprehensive car insurance?
How much comprehensive car insurance coverage you should purchase and how much it costs can vary widely. Factors affecting comprehensive car insurance costs include total coverage and location. Here’s how each of these factors plays into your premium.
1. Coverage limits
Insurance companies work on probability and total possible payouts to protect themselves. A higher coverage limit generally results in higher premiums. For example, premiums for $10,000 in coverage will cost less than $100,000 in coverage.
2. Additional coverages and add-ons
Optional auto coverage or add-ons such as roadside assistance, rental car reimbursement, or gap insurance could increase the overall cost of comprehensive car insurance. Consider how often you will use the add-ons and whether you can add them inexpensively as needed or through a different plan.
3. Deductible chosen
The deductible is the amount the auto policyholder must pay toward a claim before the auto insurance coverage kicks in. Choosing a higher deductible often results in a lower premium, while a lower deductible may lead to higher premiums. If you have some savings or cash reserves, you could use to cover the deductible amount, comprehensive car insurance could become more affordable, but you also risk paying more out of pocket without reaching beyond the deductible threshold.
4. Insurance Score
An insurance score for car insurance is a numerical rating used by insurance companies to assess the risk associated with insuring a particular individual or vehicle. This insurance score relates to the probability of accidents or payouts and may increase insurance premiums. Like a credit score, the higher your insurance score, the less likely you are to file a claim. With insurance scores, high-risk drivers may face higher monthly premiums.
5. Credit history
In some jurisdictions, insurance companies may consider a driver’s credit history when determining insurance premiums. A poor credit history may result in higher premiums. However, if you have a low credit score, you can shop for auto insurers to find one that doesn’t consider this factor.
6. Age and driving experience
Inexperienced or young drivers tend to pay higher insurance premiums because of the higher risk associated with their age group. Statistically speaking, any age group or demographic more likely to be involved in an accident will face higher premiums as the frequency of insurance payouts increases.
7. Location
Location is one of the biggest factors in determining the cost of car insurance premiums. Areas with higher rates of accidents, thefts, or vandalism may result in higher premiums. If you move, you might notice your premium increasing or decreasing based on the new relative risk.
8. Driving record
Drivers with a history of accidents, traffic violations, or claims may face higher premiums as they are considered higher-risk individuals. That’s why some drivers pay out of pocket for repairs when possible to retain lower insurance premiums and focus on major repairs. Learn more about when not to file an insurance claim. Likewise, insurance companies may ask for odometer readings, as driving more can statically increase your chances of a claim.
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9. Make and model of the car
Cars with higher values or expensive repair costs generally have higher insurance premiums. This factor ties into total coverage amounts, as replacing a high-value vehicle costs more than replacing an older vehicle. A new Mercedes or Tesla will have higher insurance premiums than a 10-year-old Honda. When purchasing a high-value vehicle, consider higher insurance premiums in your total costs to accurately understand whether it makes financial sense.
Tips for choosing a comprehensive car insurance policy
If you’re ready to add a comprehensive car insurance policy to your existing car insurance, consider your needs, compare providers, and don’t forget to read the fine print. Here’s what to consider.
1. Assess your needs
Before choosing an auto insurance policy, assess your needs and determine what coverage you require. Consider factors such as your car’s value, your driving habits, and your budget.
For example, if you’re driving a vehicle worth $10,000, minor cosmetic damage to the body won’t likely affect the vehicle’s resale value. However, totaling the vehicle in a storm would be a costly replacement. In that case, focusing on comprehensive car insurance with a higher deductible could result in lower premiums.
If your budget allows and you have a new vehicle, opting for comprehensive car insurance to cover everything could be a smart move.
2. Research and compare coverage options
Look for comprehensive coverage that includes protection against theft, vandalism, natural disasters, and other non-accident-related damages. Double-check that the policy covers fire, water damage, and other unpredictable events. Then, evaluate each policy’s limits and deductibles and choose one that aligns with your needs.
3. Consider additional benefits
Some additional benefits could more than pay for themselves if you ever need help, including roadside assistance, rental car reimbursement, or coverage for personal belongings inside the car. Note that some comprehensive car insurance doesn’t cover personal belongings.
If you left a $2,000 laptop, a $1,000 camera, and another $1,000 in sports equipment in a vandalized vehicle, not all comprehensive car insurance policies will cover replacement. If you live in a rural, low-crime area, this coverage might not matter. But if you live in an area where break-ins are frequent, coverage for personal belongings could be an important consideration.
4. Read the policy terms and conditions
Insurance providers are notorious for packing policies with fine print. Carefully read all policy details, and don’t be afraid to ask questions if it’s unclear. Pay attention to exclusions, limitations, and specific conditions that may affect your coverage.
5. Check the insurance provider’s reputation
An insurance provider should have your back if the worst happens. Check the insurance provider’s reputation and customer satisfaction to understand the type of service and coverage you can expect. You can find ratings and reviews on sites like Trustpilot, Google, or the Better Business Bureau. Look for customer reviews, ratings, and complaints to gauge the company’s customer service and claims handling.
Are You Overpaying for Car Insurance?
There is such a thing as being over-insured. If you have a car whose cash value is $5,000, spending $200 a month on insurance doesn’t make sense. However, if you’re clear on the coverage you need, it’s important to research the best options and compare providers to balance excellent service, coverage, and protection. Learn if you’re overpaying for auto insurance and then start researching options to get the coverage you need at greater savings.
FAQ
Does comprehensive car insurance cover medical expenses?
No, comprehensive car insurance doesn’t cover medical expenses. Full coverage car insurance helps cover medical expenses, liability, and collision damage.
Does comprehensive car insurance cover rental cars?
In most cases, comprehensive car insurance covers rental cars. However, it’s important to read the policy and understand the coverage offered by your insurance provider and any limitations. Check that your policy covers rental car reimbursement to ensure you’re covered before you travel.
Can I file a claim for comprehensive car insurance if my car is stolen?
Yes, you can file a claim for comprehensive car insurance if your car is stolen. Comprehensive car insurance is the only auto insurance covering theft or vandalism.
