Comprehensive Coverage

Comprehensive coverage is similar to collision coverage, except that it covers damages from non-collision causes such as fire, theft, or vandalism—although damage resulting from a collision with an animal is covered under this type of policy. Occasionally, certain types of repairs—such as window replacement—are not covered.

Comprehensive coverage also often provides a certain amount of money per day for transportation expenses (such as a rental car or public transportation) when your car has been stolen, usually until such time that the insurance company settles your claim. Some companies even offer “replacement coverage” and will cover the costs of a new vehicle of the same make and model as the one that was damaged. Usually such coverage is valid for a limited period, such as for the first six months after the purchase of the vehicle.

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What is comprehensive coverage going to cost me?

Like collision coverage, comprehensive coverage usually involves a deductible, which can range from about $100 to $1000. The higher the deductible, the lower the premium. Most states do not require drivers to carry comprehensive coverage, but if your vehicle is leased or financed, the lien holder may require you to have it. As with collision coverage, after the deductible, the insurer will pay to repair damages to your vehicle, or will reimburse you for its fair market value should the cost of repairs exceed the value.

Similar to collision coverage, if you are driving an older car with a lower resale value, it may not be worth it to keep paying for comprehensive coverage. A rule of thumb is if the cost of the premiums is more than ten percent of the car’s value, you might consider dropping it. But remember, you’ll be stuck with the bill should your car be stolen or ruled a total loss, or if you get into an accident that is your fault.

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Who needs comprehensive coverage?

Drivers who own a new or expensive car will probably want to carry comprehensive coverage to guard against large financial losses. Additionally, if you live in an area where theft or natural disasters such as floods and fires are not uncommon, you may want to consider comprehensive coverage to mitigate the risk of damage to your car.

*Auto Insurance Options is a free information resource that provides content on auto insurance products and policies for informational purposes only, but is not an agency or insurer. Products and policies may not be available in all states.