What Is Comprehensive Car Insurance?
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You love nature, but does nature love you or your car? A fallen tree branch, hail storms, and hungry squirrels that confuse electrical systems for pasta primavera can cause damage to your ride. That’s before you even leave the safety of your driveway. What about those bored teenagers who were loitering outside the movie theater when you took your family to see Transformers 19?
You need to worry about more than just traffic accidents. Vehicle damage comes in a variety of flavors, and you need vehicle insurance that can help you plan for whatever is thrown your way. That’s where comprehensive car insurance comes into play. But how does it even work? How much do you need? More important, how much will it set you back?
It's these types of important questions I’m here to help you answer. Read on to figure out whether or not comprehensive car insurance is right for you.
What Is Comprehensive Auto Insurance?
Comprehensive car insurance protects your vehicle from damage caused by natural disasters, storms, fires, vandalism, and theft. In other words, it's auto insurance for vehicle damage not caused by traffic accidents, which is what collision insurance is for. Similarly, depending who is at fault, your liability insurance or personal injury protection (PIP) will cover injuries or medical expenses sustained while inside a vehicle. However, comprehensive insurance is just for automobiles, not people.
As an example, if a tree falls on your car or truck, then comprehensive insurance will pay for repairs. But if you hit the tree, then that’s a claim for your collision policy. What’s more, if anybody is hurt during either scenario, then your PIP coverage will pay for medical expenses.
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How Much Comprehensive Car Insurance Costs
The cost of comprehensive car insurance is about $130 per year, according to the Insurance Information Institute. However, this figure isn’t necessarily helpful in estimating your costs since you generally cannot purchase just a comprehensive policy. It’s usually paired with collision and liability insurance and commonly referred to as full coverage.
A more useful number is the average cost of full coverage insurance, which is $1,200 annually, or $100 a month, according to the most recent data from the NAIC. In any event, the price you’ll pay for comprehensive or full coverage insurance will also be determined by other cost variables that include your car’s age, value, and safety record as well as your driving history, credit score, and state of residence.
If you have a clean driving record and are insuring an older vehicle with anti-lock brakes, you’ll probably pay less for comprehensive insurance than someone with several speeding tickets and a fancy sports car. Additionally, your deductible will also affect what you pay for car insurance. We will explore how deductibles work in more detail, but essentially, motorists with lower deductibles pay more for auto insurance than those with higher deductibles.
The best way to know what insurance will cost you is to request rate quotes from several providers in your area. Comparison shopping will always yield the cheapest rate. Just be sure to request quotes for similar coverage so that your comparisons are consistent.
What Comprehensive Car Insurance Covers
Comprehensive auto insurance covers damage to your vehicle that is not caused by a traffic accident. This includes damages from contact with animals, falling trees, theft, and more.
Common events that comprehensive car insurance will cover:
- Damage due to storms and natural disasters (tornadoes, hurricanes, hail storms)
- Damage from falling objects (trees, projectiles)
- Damage caused by animals, impact or otherwise
- Theft of the vehicle or its parts
- Damage due to vandalism or rioting
- Broken windshields
What Isn’t Covered By Comprehensive Car Insurance
Your comprehensive policy will not cover damages that are caused by a collision such as a rollover or side-impact accident. It also doesn’t cover damages or injuries that you cause to others. That’s a job for your liability insurance.
Common events that comprehensive car insurance doesn’t cover:
- Damages to your vehicle due to a collision
- Damages to another automobile
- Medical expenses for other motorists or passengers
- Your medical expenses
- Your legal expenses following an accident
- Theft of personal belongings from your automobile
What’s covered by a comprehensive policy is fairly standard, but insurance can vary by state and provider. It’s always recommended that you review your own coverage to understand any nuances in your policy.
How Comprehensive Insurance Works
When your automobile sustains damage from an event covered by your comprehensive insurance, you’ll file a claim with your provider. Depending on your insurer, you may file this claim over the phone, online, or through its mobile app. Your insurance agent may request more details once the claim is filed, but they will appraise the damage and issue a decision on your claim.
If a claim is approved, you’ll pay your deductible, which is the amount of money you contribute out-of-pocket towards repairs or replacement. Your insurance company will cover the remaining balance due. But when the cost of repairs exceeds the value of your vehicle, your provider will probably declare a total loss and pay out for the car’s depreciated value.
How a Comprehensive Deductible Works
Comprehensive car insurance will generally come with a deductible, which is the amount you’ll pay before your insurance company compensates you for claimed damages. The size of a comprehensive deductible will vary, but it’s often between $500 and $1,500.
For example, if a tree hits your car and causes $2,000 worth of damage but your comprehensive deductible is $500, then your provider will pay $1,500 on your claim. If your deductible is $1,000, your insurer will only pay out $1,000.
Keep in mind that you’re also responsible for paying a deductible even in the event of a total loss claim. If a tree hit your car and destroyed it entirely, then your provider would pay out the value of your vehicle at the time of the accident, minus the deductible. For example, if your car was worth $10,000 before it was totaled, then your provider would pay you $9,500.
The lower your deductible, the more your insurance company will pay against a claim. This is why increasing your deductible can lower the overall cost of your premium. Because when you agree to pay more out of pocket for repairs or replacement, your provider takes on less risk to insure you.
Increasing your deductible can be an effective means of saving money on comprehensive car insurance, especially when your car is older. Just be sure to tuck away some of those savings to cover repair costs should you ever submit a claim.
Is Comprehensive Car Insurance Worth It?
Whether or not comprehensive car insurance is worth it will depend on the age and value of your vehicle. As a rule of thumb, comprehensive insurance becomes less practical as your car ages and depreciates in value.
When a comprehensive policy costs more than your vehicle’s value, then it’s probably not worth it. But if you have a newer or expensive car or truck, then comprehensive may save you money on the occasion of a total loss or comprehensive claim. Essentially, that’s the question every car owner needs to answer for themselves: Will comprehensive coverage save money in the long run?
The best way to determine if comprehensive insurance is a good idea is to examine your car’s cash value against its insurance costs. Begin by subtracting both your deductible and six-month premium from your vehicle’s Blue Book value. If the resulting figure is negative, then comprehensive insurance is not worth it. If the figure is still fairly high, then comprehensive insurance is a good idea. Yet if the figure is not negative, but low, then you can probably keep comprehensive but reduce the amount of coverage.
Here’s an example: If the Blue Book value of your 2015 Nissan Sentra is $5,000, and its deductible is $1,000 and the cost of six months worth of coverage is $660, then comprehensive is likely worth the cost. However, if you pay more for coverage because of a few speeding tickets—say, $1,200 every six month and your car is only worth $2,000, then your insurer won’t be able to compensate you for its value in a total loss claim.
You may decide that comprehensive car insurance is worth it for now. But do the math. Your car depreciates in value to ensure that you’re still getting the best value for money.
FAQ About Comprehensive Car Insurance
Is comprehensive insurance full coverage?
Comprehensive insurance is part of a full-coverage policy. Full coverage is a catch-all phrase for an auto insurance policy that includes liability, collision, comprehensive, and sometimes PIP or uninsured/underinsured motorists in select states.
What is the difference between comprehensive and liability insurance?
The difference between comprehensive and liability insurance is that liability pays for property damage and medical expenses when you cause an accident, whereas comprehensive pays for non-accident damages to your vehicle caused by things such as storms, fallen branches, and vandalism.
What’s the difference between comprehensive and collision insurance?
It’s about how a car sustains damage. Comprehensive insurance protects your vehicle from damages caused by events such as windstorms, fallen trees, animals, floods, fire, theft, and vandalism. Collision insurance covers damages from traffic accidents such as a rear-end collision or fender benders.
How much comprehensive insurance do I need?
Comprehensive insurance will automatically cover your vehicle’s current value or depreciated value. Instead of needing to set a coverage limit, you simply need to decide on the amount of your deductible.
What is a good comprehensive deductible?
A good comprehensive deductible is the amount that a policyholder can comfortably afford in the event of a claim, and it should not exceed the value of the insured vehicle.
Is it better to have a $1,000 or $500 deductible?
Generally speaking, it’s better to have a $1,000 deductible if you are looking for cheaper insurance premiums. If you have a reasonable expectation of filing a claim, then a $500 deductible may better suit your needs. It really comes down to preference. Do you want to pay more money out of pocket in the event or a claim? Or do you prefer to pay a higher insurance premium?
Comprehensive Car Insurance Facts
1. The first car insurance policy was issued in Dayton, Ohio, in 1897.
2. The most expensive cars to insure are Maseratis and Teslas. The Maserati Quattroporte and Maserati Ghibli cost more than $4,200 a year to insure, while the Tesla's Model S and Model X are both about $4,000 annually.
3. The cheapest vehicles to insure the Chrysler Voyager, Honda CR-V, and Mazda CX-3. An insurance policy for each of those automobiles is less than $1,300 a year on average.
4. Motorists in these five states frequently pay the highest premiums for auto insurance:
- Louisiana: $2,839
- Michigan: $2,112
- Florida: $2,082
- California: $1,966
- Missouri: $1,895
5. Policyholders in these states usually pay lower premiums than anyone else:
- Maine: $858
- New Hampshire: $885
- Wisconsin: $938
- Idaho: $985
- Ohio: $992
6. Thieves steal about 800,000 vehicles in the U.S. each year. Ford and Chevrolet full-size pickups are the most stolen trucks, and Honda Civics are the most stolen cars. It’s no wonder that comprehensive car insurance is so popular.