What is Comprehensive Insurance Coverage?

We all know that driving comes with risks, but sometimes your car may be unavoidably damaged by something other than an accident with another car. That’s where “comprehensive coverage” comes in to play. Your comprehensive coverage, also known as “other than collision” coverage, helps pay for damage to your car for non-accident claims. For example, if you hit a deer or hail damages your car, your comprehensive coverage helps pay for the repairs.

What Does Comprehensive Coverage Cover?

Some frequent events covered by comprehensive coverage include:

  • Damage from animals
  • Falling objects like trees and hail
  • Natural disasters like floods and hurricanes
  • Damage to your windshield or glass
  • Theft or vandalism
  • Fire

Comprehensive coverage does not cover:

  • Damages from a collision
  • Damages to someone else’s car from a collision
  • Medical expenses from a collision

Comprehensive coverage helps pay for other physical damages beyond your control, while collision coverage covers damages from a car accident or collision.

Comprehensive Coverage Deductibles and Limits

Typically, your comprehensive coverage will pay up to the car’s actual cash value (ACV), minus your deductible. If you select a higher deductible, it will lower your comprehensive coverage cost, but increase your out-of-pocket costs if you need to use your insurance. For example, if your car has $5,000 worth of hail damage and your deductible is $1,000, your insurance company will pay up to $4,000 towards the repairs, and you will pay $1,000.

However, remember that your insurance will only pay for repairs up to the ACV of your vehicle. In the above hail damage scenario, if your car is worth $4,000 and the hail causes $5,000 worth of damage, your insurance will only pay up to the ACV of your car, minus your deductible. In that case, your insurance will pay $3,000, and you will bear $2,000 of the costs.

Who Needs Comprehensive Coverage?

If you are financing or leasing a car, your contract will typically state that you must have comprehensive coverage on your vehicle. This contract provision protects your lender if someone steals your car, or something damages your car. If you didn’t finance your car, consider the ACV of your vehicle and whether or not you could afford to pay for the repairs or replace it in the event of a natural disaster. If your car is more expensive, you may be more likely to consider comprehensive coverage a must-have.

What Does Comprehensive Coverage Cost?

The cost of your comprehensive coverage will vary depending on your location. Insurance companies typically consider your:

  • Car’s make, model, and age
  • Driving history
  • Deductible

The higher your deductible, the lower the cost of your comprehensive coverage will be. However, with a higher deductible, you will have higher out-of-pocket costs if you need to use your comprehensive coverage. When determining the best deductible for your car, consider your car’s actual cash value (ACV). If the damage costs exceed your ACV, the car is totaled, and your insurance company will pay the ACV to you or your lender.

When deciding whether you should get comprehensive coverage for your car, consider the value of your car, whether or not you financed your car, the cost of coverage where you live, and whether you can afford to pay for repairs or the loss of your car.

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