What Is Comprehensive Insurance and Do I Need It?

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If you’re shopping for auto insurance, you might wonder what type of coverage you need. Most car insurance policies include a set of basic coverages that are required by your state and are important for every driver to have. However, certain coverages are optional—one of which is comprehensive insurance.

So what is comprehensive insurance, how does it differ from collision coverage and how do you know if it’s something you need?

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What is comprehensive coverage?

Let’s first define comprehensive coverage. Essentially, comprehensive insurance covers your car from damages caused by events that are out of your control. That includes most situations other than a car accident or a rollover.

Like most types of insurance, comprehensive coverage has a deductible you have to meet before the insurance company will start to contribute. It also has a limit, which is the maximum amount of money that your insurance provider will pay towards a covered claim. Your limit is usually based on the actual cash value of your car.

Comprehensive coverage is optional for all drivers, and no states require it. It’s an add-on coverage that auto insurers provide at an additional cost. However, there are a number of reasons why having comprehensive insurance is beneficial for most drivers.

What does comprehensive insurance cover?

Comprehensive insurance covers your car in almost any situation other than an accident with another vehicle. These are situations that are unexpected and out of your control. The most common events covered by comprehensive coverage include:

  • Accidents with animals
  • Debris from other cars
  • Earthquakes
  • Extreme weather
  • Falling objects
  • Fire
  • Floods
  • Riots
  • Theft
  • Vandalism
  • Windshield damage

Comprehensive coverage only pays to repair or replace your vehicle after a covered event. It doesn’t cover injuries or medical expenses for you or your passengers. That’s where your medical payments coverage comes in.

Depending on your policy, comprehensive insurance might also cover damage to rental cars or a car you’re borrowing from a friend or family member, but check your policy to see what is and isn’t covered. Different providers have different exclusions.

If your car is stolen and you have comprehensive insurance, your insurance provider will help you buy a new car. Depending on your policy, you’ll either receive the actual cash value or the replacement cost value of the car. If your policy includes replacement cost value, the insurance company will reimburse you for the cost of a new car that is the same make and model as your original vehicle.

How much is comprehensive insurance?

The average cost of comprehensive car insurance is slightly over $134 per year, according to the Insurance Information Institute. However, the price you’ll pay to add comprehensive to your auto insurance policy varies based on your provider and other factors like your age, credit score, state and the value of your car. Comprehensive coverage policies also have a deductible, which will impact your rate. The higher your deductible, the lower your premium will be, and vice versa.

Do you need comprehensive coverage?

You don’t legally need to have comprehensive coverage in order to operate your vehicle. It’s an optional coverage that all auto insurance companies offer their customers for added protection. While adding comprehensive coverage to your auto policy will slightly raise the price, there are reasons why all drivers should consider getting it.

If you’re leasing your car or have a loan, your lender may require you to have both comprehensive and collision insurance until you pay off your vehicle. Before purchasing a car insurance policy, check with your lender to see what types of coverage you need to have.

If your vehicle is stolen, it’s usually on the driver to buy themselves a new car. If you’re not financially prepared, that can quickly drain your savings account. But with comprehensive insurance, your insurance provider will help you purchase a new car if yours is stolen.

Comprehensive coverage is also helpful for people who can’t afford to pay much out-of-pocket if their car was damaged or destroyed. While your risk of hitting a deer is low, it’s a possibility. You could also have hail in your area that breaks your windshield.

Without comprehensive insurance, you would be responsible for paying for the damages in full. If your car was totaled, you would have to replace your car without any help from the insurance company. Depending on the extent of the damages and the cost of repairs, you could put yourself in serious debt.

The biggest takeaway is that comprehensive insurance gives you peace of mind knowing that your car is covered in almost any situation you might encounter. It’s a small price to pay to protect your car from unexpected situations that could be costly without insurance.

Comprehensive vs. collision

When purchasing insurance, it’s common to get comprehensive insurance confused with collision insurance. But the difference between comprehensive vs collision is simple.

Collision insurance covers your car after a collision, which includes any accident between two vehicles, in a rollover or if you hit an object. Comprehensive insurance covers your car in the situations that collision coverage does not. That includes theft, fire, falling objects and animal encounters.

Some auto insurance companies require customers that have collision insurance to add comprehensive insurance to their policy because collision claims tend to be more common than comprehensive claims. Check with your insurance provider to see what the requirements are for comprehensive coverage.

Can you add coverage to comprehensive insurance?

No, you can’t add coverage to comprehensive like you can with other policies. Comprehensive insurance comes with a set of standard coverages. These coverages are generally consistent among all auto insurance providers. Between collision and comprehensive, your car will be protected in nearly any situation you can imagine.

If you do want more coverage, talk to your insurance provider about increasing your coverage limits. It will raise your annual premium, but the insurance company will pay you a higher amount for a covered loss. You might consider this if you have a new car, drive a luxury vehicle that is expensive to repair or want to make sure you have fewer out-of-pocket costs if anything happens.