Everthing You Need to Know About Comprehensive Auto Insurance Coverage
What is Comprehensive Auto Insurance Coverage?
You'd think, wouldn't you, that comprehensive car insurance would cover everything. After all, it's comprehensive! However, comprehensive insurance doesn't necessarily mean that it's all inclusive. In fact, it only covers specific things, so you need to be sure before you buy that you're getting all the coverage you need.
Comprehensive auto insurance, simply stated, protects you against any damage that happens to your car that isn't caused by a collision. Sometimes it's called "other than collision" or OTC insurance, or just "comp." It can be a bit confusing, though, so let's talk about insurance in general before we move on to comprehensive.
Understanding all your options when it comes to car insurance is important, and the first thing you need to know is that your next level of coverage over and above liability is comprehensive. It's also known as storage insurance, "other than collision" insurance, fire and theft insurance, and comp. Whatever you choose to call it, what it means is that you're covered for damage that isn't caused by collision, and that it's a higher level of car insurance than liability.
What Kind of Coverage is Comprehensive Insurance?
You can't add collision coverage to your vehicle policy if you're not carrying comprehensive, but you can add comprehensive without collision. If you don't want to go for full coverage, you should still consider adding comprehensive insurance to your policy.
Comprehensive insurance covers your vehicle against damage, even if it's not being driven. If you have your car in storage, and the building burns, you're covered. If anything happens to your vehicle, even if it isn't being driven, comprehensive insurance covers the cost of any repairs, minus your deductible. If you're not driving, you can remove liability insurance from your vehicle and just keep the comprehensive auto insurance coverage.
The Two Components of Auto Insurance
Generally speaking, auto insurance is two-fold - it includes liability insurance, and coverage for physical damage. Your liability insurance covers you if you cause an accident that causes death or bodily injury to another party. It's not optional. Coverage for physical damage is optional, and it covers the cost of any repairs that might be needed for your car, less the deductible, that occur as a result of events or acts that are covered under your auto insurance policy.
Under the physical damage component, there are two types of coverage - collision and comprehensive. Collision insurance covers any damage to your car if you're in an accident that involved a collision. Whether it's a collision with another vehicle, or with an object like a building, power pole, fence, or fire hydrant, it doesn't matter - you're covered. Comprehensive insurance covers damage that isn't caused by a collision.
What Does Comprehensive Auto Insurance Cover?
Believe it or not, comprehensive coverage actually indemnifies you against certain types of collisions that aren't covered under collision coverage. Your collision coverage will protect you if you hit another vehicle, a building, a light pole or a fire hydrant, but if you hit an animal, you're out of luck. If you should happen to have the bad luck to get up close and personal with a deer on the road, that's where your comprehensive coverage comes in.
Comprehensive insurance also covers you if your windshield or windows are damaged. The cause of the damage doesn't matter - your windshield, your rear window, other windows and sunroof all are protected under comprehensive insurance, no matter what the cause of the damage.
Comprehensive auto insurance coverage doesn't cover you for everything that your collision insurance doesn't cover, but it does cover a lot of things that can harm your car. Basically, comprehensive insurance covers damage that's not due to a collision, including rockslides, fires, vandalism, natural disasters, glass damage, theft, and damage from colliding with an animal.
Much of the time, people think that having comprehensive coverage means that they're covered for any type of damage, but this isn't the case. You're only covered for damage that doesn't involve a collision, and it only covers the cost of replacing or repairing your car. If the damage is due to vandalism, for example, you'll be covered for damage to your car, but not for the cost of items that were stolen out of your vehicle.
Comprehensive insurance covers, essentially, the following:
If your vehicle catches fire, or is even set on fire by criminals, comprehensive insurance covers you.
Comprehensive insurance will even protect you against damage from unusual weather, like hail storms.
If you get keyed, or your car is egged, or any other type of damage is incurred as a result of vandalism, you're covered.
If your vehicle disappears and isn't recovered after 30 days, your comprehensive insurance will pay you the cash value of your vehicle minus the deductible.
If your vehicle is damaged in a flood, whether it's due to sewer backup, broken dams or hurricanes, or even unusually heavy rain, the damage will be covered under your comprehensive insurance.
Trees are not always your friends. Sometimes they fall on cars. If this happens to you, your insurance company will cover you if you have comprehensive insurance.
When you buy your comprehensive insurance, you'll have to select a deductible amount that you'll pay in the event of damage before your comprehensive insurance kicks in. Some companies offer no deductible, but your premiums for car insurance will be higher.
The following are also covered under comprehensive insurance:
- Water damage
- Damage incurred by colliding with an animal
- Broken windshields and window glass
- Damage due to falling objects, like trees
That stated, you won't be covered for vandalism or theft that is caused by a member of your family, or by someone who is in your employ.
What Does Comprehensive Auto Insurance Not Cover?
If you hit an object, have personal property stolen from your car, need to be towed or have other roadside assistance, you will not be covered. You can get coverage under other policies for these types of occurrences.
So, comprehensive insurance isn't really all-inclusive, but it does cover a number of occurrences. If you're worried about theft, damage to your windshield or windows, or other types of vandalism, then you should definitely consider carrying comprehensive insurance on your automotive policy. And, of course, if your lender requires it, you won't have much of a choice.
Do I Need Comprehensive Insurance?
The short answer is that you do. Just as an example, all vehicles are vulnerable to glass damage, whether it's due to stones falling off gravel trucks, or outright malicious damage by vandals. There's hardly a vehicle owner in existence who hasn't at one time or another had to have a windshield replaced, and often the cost of a year's premiums on comprehensive insurance can cover the whole cost.
Also, if you live in a rural area, you might want to consider comprehensive insurance. Between July of 2011 and June of 2012 alone, there were 1.2 collisions between motor vehicles and deer reported nationwide, with an estimated $3,000 in damage per crash - and that's just deer; let's not even get started on the bears.
If you're in an urban area, your issues are theft and vandalism. In 2012, which was the last year for which data was available, approximately 724,000 cars were stolen. Vandalism is a little more difficult to quantify, since many people don't report acts of vandalism.
If your car is worth a lot of money, you need comprehensive insurance coverage unless your pockets are very deep, and you don't care how much it's going to cost you to replace or repair your vehicle if it's damaged.
No state requires comprehensive insurance, but if you have a car loan, chances are that your lender will. Obviously, they want to protect their interest in the car. And even if your lender doesn't require it, you should consider it.
What Will You Pay for Comprehensive Insurance?
It varies considerably, and basically the level of protection that you want will determine the cost. The higher the deductible, the lower your premiums, but the more you'll end up out of pocket if you need to file a claim. The lower the deductible, the higher the premiums, but the less out of pocket if a claim is necessary.
Mainly, though, your car insurance premiums will depend on the value of your car. It's calculated based on the buying price, minus your depreciation and minus your deductible. Comprehensive insurance pays up to the actual cash value of your car. If the damage exceeds the actual value, your insurance company will declare the car a write-off and pay you its actual value.
How Much Does it Cost?
Comprehensive insurance is usually very affordable, and it's worth the cost. Just replacing a windshield can cost hundreds of dollars, and everyone knows how common cracked windshields can be. In the worst case scenario, like a tree falling on your car, carrying comprehensive insurance can save you thousands.
Contact your insurance agent and talk about how much you want to carry in terms of comprehensive insurance. It's definitely worth adding this type of coverage onto your insurance policy, especially if your vehicle is worth a fair bit of money and it's not paid off.
The cost of comprehensive insurance is determined by the same factors as any other component of your vehicle policy - the value of the vehicle, the age of the driver, the experience level of the driver, and the level of risk in the area where the car is driven.
You should always shop around and try to find the best rate for comprehensive insurance in your area. Also see full-coverage-comprehensive-collision-car-insurance to learn more about coverage costs.