Comprehensive Insurance

Comprehensive insurance is a type of automobile insurance that covers damage to your car from causes other than a collision. Comprehensive insurance would cover your vehicle if it was destroyed by a tornado, dented by a run-in with a deer, spray painted by a vandal, damaged by a break-in or crushed by a collapsing garage, among other causes. 

Comprehensive insurance, collision insurance and liability insurance are the three components of an automobile insurance policy. State law requires drivers to carry liability insurance, but collision and comprehensive insurance are optional if someone owns a vehicle outright. If a person has financed the vehicle, the auto loan company might require comprehensive insurance. If the car owner has paid for the vehicle in full, and they can’t afford comprehensive insurance, they own an older automobile that doesn’t have much value, they think they’re at low-risk of non-collision damage or they prefer to self-insure, the owner can choose not to purchase comprehensive insurance. On the other hand, even if someone owns an automobile free and clear, if they live in a rural area where collisions with animals are common, in a stormy area that often gets hail or in a higher-crime part of town where break-ins and theft occur regularly, they might want to purchase comprehensive insurance.

Collision and comprehensive insurance each have their own deductibles (liability insurance has no deductible), so a driver can choose different deductibles based on perceived risk levels in each of these areas. For example, if someone thinks they’re not likely to file a comprehensive claim, but they don’t want to forego comprehensive insurance altogether, they could choose a relatively high $1,000 deductible to lower the premiums. The higher a vehicle’s cash value, the more expensive a comprehensive insurance policy will be.

Here’s an example of how comprehensive insurance works if a driver files a claim. If someone drives a Honda Accord worth $10,000, with a $1,000 comprehensive deductible and the car is totally destroyed by a tornado, the driver will receive $9,000 from the insurance company. If they don’t have comprehensive coverage and the car is totally destroyed by a tornado, the collision and liability portions of the policy won’t cover the damage, and the driver will be responsible for the entire $10,000 loss. A driver might have to get a loan to purchase a replacement vehicle or settle for something less expensive if they don’t have $10,000 to spend on an equivalent replacement.