Comprehensive Insurance For Car Coverage – Comprehensive auto insurance is one of several auto policies that cover vehicle damages. But how exactly does it work? Find out in this guide
Comprehensive auto insurance is among the types of policies that protect you financially if your vehicle breaks down. This type of coverage is not mandatory; Whether it suits you depends on your personal preferences and circumstances.
Comprehensive Insurance For Car Coverage
So, how does comprehensive coverage work and when do you need it? How does it differ from collision insurance? What about full coverage? Can you buy it as a standalone policy? Insurance business answers these questions and more in this guide.
What Is Full Coverage Car Insurance?
A comprehensive auto insurance policy covers the cost of repairing or replacing your vehicle if it is lost or damaged due to traffic-related accidents. These include man-made events such as fires, theft and vandalism, and natural disasters such as snowstorms and hurricanes.
It is invalid if your car collides with another vehicle or object. This is why it is often called “other than collision” coverage.
If you are financing or leasing your vehicle, comprehensive coverage is not mandatory, although car dealers, banks and other lenders require it.
Car insurers usually bundle comprehensive car insurance with collision coverage, but some carriers give you the option to take one out. However, both cannot be purchased as independent policies. You’ll need to add it to your existing car insurance, which should carry all government-mandated coverage.
How Does Comprehensive Car Insurance Work?
Comprehensive insurance can cover not only your car but other motor vehicles as well. These include boats, motorcycles, RVs and yachts. Your policy pays the actual cash value (ACV) of your vehicle. This is the market value of your car before the accident.
Like many types of policies, comprehensive car insurance comes with a deductible. The insurance deductible is the amount you have to pay for coverage before you can select your auto insurance tab. This usually comes in $500 increments, so you can choose from $500, $1,000, $1,500, and so on.
Let’s say you have a $1,000 deductible, and your car is later damaged by a tree branch for $2,500. You will then be on the hook for the first $1,000 and your insurance will cover the remaining $1,500.
A higher deductible means lower premiums because your insurance company takes less risk. But you have to make sure that you can afford to pay the amount you choose.
Do You Need Comprehensive And Collision Insurance?
Comprehensive car insurance covers damages caused by unexpected traffic-related accidents. This means anything that is not caused by a vehicle collision. Such events include:
If you’re from Florida, you know how damaging weather-related events can be. Learn how auto coverage can protect you in this Florida auto insurance guide.
Although comprehensive auto insurance provides protection against a wide list of risks, it does not include collision coverage and other auto insurance policies. Exclusions from comprehensive coverage include:
If you swerve to avoid hitting an animal and hit a fence, comprehensive insurance won’t cover the damage to your vehicle. Instead, this is covered under your collision insurance policy.
Key Benefits Of Comprehensive Automotive Coverage
As the name suggests, collision car insurance pays for damages if it collides with another vehicle or object. It also covers potholes or damage if your car rolls.
Comprehensive policies, meanwhile, provide coverage for non-traffic-related injuries or non-vehicle collisions. This is why it is sometimes called “other than collision” coverage.
Comprehensive coverage and collision coverage are often confused as they are similar to each other. Both are optional. Both cover the cost of repairing or replacing a vehicle after an accident. Both have deductibles that you must pay before coverage begins. Both pay the actual cash value of the vehicle. And if you’re financing and leasing your car, both may be needed.
Instead, it’s a combination of government-mandated coverage — which can include liability, medical bills and uninsured/underinsured motorist coverage — as well as comprehensive and collision insurance. Combined, these guidelines provide complete protection for you and your vehicle, hence the name.
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For more on how this car insurance package works, check out our full coverage car insurance guide.
According to the most recent data collected by the National Association of Insurance Commissioners (NAIC), comprehensive auto insurance costs about $174 per year. This is less than half the cost of collision coverage, which is around $370.
These amounts are paid above your state’s mandatory coverage. You cannot buy comprehensive and collision insurance as a standalone policy. Often, you will also need to purchase these policies together.
As with any other type of insurance, there are steps to follow when filing a claim under your comprehensive auto insurance policy.
Full Coverage Insurance And Who Should Buy It
Let’s say you end up driving in a blizzard. By the time you’re able to drive yourself to safety, the storm has caused severe dents and shocks to your car’s body. It also cracked your windshield badly.
It also helps to have the contact number of your insurance agent or broker. While a general phone number for the agent’s office is fine, the exact phone number and extension of your agent can help streamline the insurance claims process.
After successfully completing the above steps, a claims adjuster will examine the damage and provide you with an initial estimate of repair costs.
If you’re OK with the estimate, your car will be taken to your insurer’s preferred repair shop. The workshop will notify you when your vehicle is ready for collection.
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Your insurer covers the costs you have to pay, minus the coverage limits and deductibles.
One drawback to filing a claim is that your renewal rates may increase. However, there are certain steps you can take to lower your premiums. Find out what cheap car insurance is in this guide.
Car dealerships, banks and other lenders make comprehensive car insurance with collision coverage a condition of your car loan. So, whether you’re leasing or financing your vehicle, there’s no way around it. You need to take cover.
But if you own your vehicle, the question of whether you need comprehensive coverage will depend on the value of your car and your financial situation.
How To Shop For Car Insurance
If you own a high-priced ride and can’t afford the cost of repairing or replacing it, comprehensive insurance can be a smart investment.
On the flip side, if you have an older vehicle with fair cash value, getting coverage may not be worth it. You often need to purchase comprehensive insurance with collision coverage. These guidelines can significantly increase your annual auto premium.
Comprehensive auto insurance always covers incidents that don’t involve you driving, and over which you have little control. Another benefit of having coverage is peace of mind. If these accidents happen, you have a financial cushion to help you get back on the road quickly.
Comprehensive auto insurance is one of the many auto policies that can protect you and your vehicle. If you want to learn more about other types of auto coverage, check out our comprehensive auto insurance primer.
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Do you think comprehensive car insurance is a smart investment? Have you ever made a claim on your general policy? how was it? Feel free to share your story below. Partner Content: This content was created by a Dow Jones business partner and was researched and written outside of the newsroom. Links in this article may earn us a commission. know more
When shopping for car insurance online, you can save time and money by researching providers and comparing quotes. Get tips for buying coverage online
Written by Daniel Robinson, Written by: By Daniel Robinson Author Daniel is a Group Writer for Guides and has written on auto finance and car care topics for a number of automotive news sites and marketing organizations in the US, UK and Australia. Daniel is a Guide Group authority on auto insurance, loans, warranty options, car services and more.
Edited by: Rashawn Michner Editing by: Rashawn Michner Managing Editor Rashawn Michner is a Guides team editor with over 10 years of experience covering personal finance and insurance topics.
Liability Vs. Full Coverage Car Insurance: Which Is Better?
Is it better to buy your car insurance online or through an agent? That depends on your insurance needs and what you are willing to do. In this article, we at the Guide team explain where to buy car insurance online and when it’s best to call an agent.
If you already know you want to buy your car insurance online, use the tool above to get started by comparing free quotes from many of the best car insurance companies.
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The Guide Team is committed to providing you with reliable information to help you make the best decision about insuring your vehicle. Because consumers trust us to provide objective and accurate information, we’ve created a comprehensive rating system to rank the best auto insurance companies. We have collected data on dozens of automobiles.
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