Drive with Peace of Mind: Understanding Comprehensive Coverage

Get ready to learn the essential aspects of comprehensive insurance coverage, what is often referred to as “other than collision” coverage.

From the wrath of Mother Nature to the unpredictable acts of theft or vandalism, comprehensive coverage is your financial safeguard against damage that can happen to your vehicle outside of standard accidents.

We’ll address the top questions that perplex drivers: What exactly does comprehensive coverage do? What is covered? How do I know if it’s needed? And most importantly, how can it affect your peace of mind and pocketbook?

By the end of this article, you’ll know how to make an informed decision on whether comprehensive car insurance should be included in your auto protection plan.

What is comprehensive coverage?

Comprehensive coverage is a type of car insurance that provides financial protection against a range of incidents that are not covered by collision insurance. That’s why it’s also referred to as “other-than-collision” coverage.

This coverage helps pay to repair or replace your vehicle if it’s damaged by something other than a collision with another vehicle or a stationary object.

Comprehensive insurance is typically optional in the sense that it is not mandated by law. However, comprehensive coverage may be required in certain situations, particularly if you have a lease or loan on your vehicle.

Lenders and lessors often require comprehensive insurance to protect their financial interest in your car. If you own your vehicle outright, the decision to carry comprehensive insurance is up to you.

Types of claims covered under comprehensive coverage

Since comprehensive covers claims other than a collision with another vehicle or object, there are a lot of possible scenarios where a claim would be covered.

Perils covered under comprehensive coverage

Theft – If your vehicle is stolen or parts like your catalytic converter are taken.
Vandalism – Any malicious destruction or defacement of your car.
Fire – Damage due to a vehicle fire, whether it’s an engine fire, arson, or wildfires.
Natural Disasters – Includes a wide array of acts of nature such as earthquakes, floods, hurricanes, tornadoes, and storms.
Falling Objects – Coverage for damages if objects like tree branches, rocks, or debris damage your vehicle.
Explosions – Damage from explosions, whether industrial, residential, or accidental.
Civil Disturbances – Damage to your car from riots or other civil commotions causing public disturbance.
Damage from Animals – Claims for damage caused by animals, e.g., if you hit a deer or a rodent chews through your electrical wiring.
Glass Breakage – Windshield or window damage, which can sometimes occur without the context of a larger accident.
Hail Damage – Dents and shattered glass from hailstones during a storm.
Flood Damage – Water damage to your car’s interior and engine due to flooding.
Missiles or Falling Aircraft – Rare, but it does cover damage from such occurrences.
Terrorism – In the unlikely event of a terrorist attack that damages your vehicle.

It’s important to read your specific policy carefully, as coverage can vary by insurer and by individual policy options.

Also, comprehensive coverage usually has a deductible, and certain limits apply, so it’s crucial to understand the terms of your policy and discuss with your insurance provider any concerns or questions you might have about coverage specifics.

Types of claims NOT covered by comprehensive coverage

Comprehensive car insurance provides broad protection but doesn’t cover every type of damage or loss related to your vehicle.

Examples of claims typically not covered by comprehensive insurance

Collision-Related Damage – Any damage to your vehicle as a result of a collision with another vehicle or stationary object is not covered under comprehensive. This is what collision coverage is for.
Bodily Injuries – Comprehensive insurance does not cover medical bills or injuries sustained by you or your passengers in an accident. This is usually covered by medical payments or personal injury protection (PIP) coverage.
Property Damage Liability – Damage you cause to another person’s vehicle or property in an accident is not covered by comprehensive coverage. This is the domain of property damage liability coverage.
Normal Wear and Tear – The normal aging and breakdown of car parts are not covered by comprehensive insurance.
Mechanical Breakdowns – Engine failures, transmission problems, or other mechanical issues are not covered unless they are the direct result of a covered event.
Customizations – If you have special customizations not originally on the vehicle, such as aftermarket stereo systems or custom wheels, these may not be covered unless you have purchased additional custom parts coverage.
Driver’s Personal Items – Personal belongings that are stolen from your vehicle or damaged during a covered event typically aren’t covered under comprehensive insurance. Personal property is generally covered by homeowners or renters insurance policies.
Business Use – If you use your vehicle for business purposes and it’s damaged during these activities, comprehensive insurance may not cover it. Commercial auto insurance is often required in such cases.
Intentional Damage – Any damage you intentionally cause to your vehicle is not covered.
Acts of War – Damage caused by war or nuclear risk is typically excluded from comprehensive coverage.
Racing or Speed Tests – Damage sustained while racing or speed testing is not covered.

Understanding what is not covered is crucial when selecting your car insurance so that you can consider additional coverage types to fill in the gaps as necessary. Always read your policy documents carefully and speak with your insurance provider to clarify coverage details specific to your policy.

What is a deductible and how does it work?

A deductible is an amount you agree to pay out-of-pocket before your insurance coverage kicks in to cover the rest of the cost for a covered loss.

Here’s how the deductible works when you file a comprehensive insurance claim:

Choosing Your Deductible – When you purchase comprehensive coverage, you choose a deductible amount. Common deductible amounts include $250, $500, or $1000, though these can vary depending on your policy and insurer.
Filing a Claim – If your vehicle sustains damage that is covered under comprehensive insurance, such as theft or hail damage, you would file a claim with your insurance company.
Assessment and Approval – The insurance company will assess the claim to confirm that the damage is covered by your policy and calculate the total cost of repairs. This usually involves the expertise of a claims adjustor.
Paying the Deductible – Once the claim is approved, you are responsible for paying your deductible amount directly to the repair shop or to the insurance company. For example, if you have a $500 deductible and the damage repair costs $2,000, you will pay $500, and your insurer will pay the remaining $1,500.
Completion of Repair or Replacement – After your deductible is paid, the insurance company will pay the repair shop for the balance of the repair costs, or in the case of a total loss, pay you the value of your vehicle minus the deductible.

It’s important to note that the deductible applies each time a comprehensive claim is filed, not annually like health insurance deductibles.

Considerations When Deciding on a Comprehensive Deductible

Choosing a higher deductible generally lowers your insurance premium, but it means you’ll pay more out-of-pocket in the event of a claim.

Conversely, a lower deductible means a higher premium, but less to pay when something happens to your vehicle.

There are a number of factors that should go into your decision when choosing a deductible. These include:

Affordability of Premiums – A higher deductible usually means lower monthly premiums. If your main concern is to save money on your monthly insurance costs, you might opt for a higher deductible.
Emergency Savings – If you have a solid emergency fund, you may be more comfortable opting for a higher deductible since you can afford to pay it in case of a claim. Conversely, if saving up is challenging, a lower deductible might be safer, even though it comes with higher premiums.
Risk Exposure – Evaluate the risks your vehicle is exposed to. If you live in an area with a high risk of events covered by comprehensive insurance (e.g., severe weather, high crime rates), you may prefer a lower deductible since you might have to file a claim more frequently.
Vehicle Value – Consider the value of your car. If your car isn’t worth much more than the deductible itself, a high deductible may not make sense, as the insurance wouldn’t cover much beyond what you’re paying out-of-pocket.
Personal Risk Tolerance – If you’re comfortable taking on more risk, you might choose a higher deductible. If you prefer the certainty of smaller, predictable costs, a lower deductible might be more in line with your personal risk tolerance.
Driving Frequency – If you don’t drive often, your chances of encountering an incident requiring comprehensive coverage might be lower, which could influence you to choose a higher deductible.
Claim History – If you’ve rarely had to file an insurance claim in the past, you might opt for a higher deductible based on the expectation that it’s less likely you’ll need to file one in the future.
Financial Impact – Calculate the financial impact of both scenarios (paying higher premiums versus paying a higher deductible in the event of a claim) and see which option is financially more advantageous in the long run.
Cash Flow – Monthly cash flow is an important consideration. A higher premium can put a strain on your monthly budget, so make sure you choose an option that you can comfortably afford without compromising your financial stability.

It’s often beneficial to run the numbers for different deductible scenarios and consider your financial situation, driving habits, and the potential risks to your vehicle before making a decision.

Additionally, speaking with an insurance representative can provide you with a clearer understanding of how each deductible level would affect your premiums and coverage.

It’s a balance between what you can afford to pay as a lump sum and what you’re willing to pay as an ongoing insurance cost.

Factors that affect the cost of comprehensive coverage

The cost of comprehensive car insurance coverage is influenced by several factors, each affecting how insurers calculate the risk of covering your vehicle for non-collision related damages.

The cost is determined by both personal factors specific to the policyholder and statistical risks associated with the insured vehicle.

Personal factors include your driving history, credit score, and where you live and park your car.

Vehicle-related factors encompass the make, model, age of the car, and its susceptibility to damage, theft, and the overall cost to repair or replace.

A list of the factors that influence the cost of comprehensive coverage

Vehicle Value – Expensive cars typically cost more to insure because they can be costlier to repair or replace.
Make and Model – Some models are more prone to theft or damage, leading to higher comprehensive rates.
Location – Areas with high rates of vandalism, theft, or natural disasters can see higher premiums.
Deductible Amount – Higher deductibles generally lower your premium, while lower deductibles raise it.
Driving Record – A clean driving record can lead to lower insurance costs, even for comprehensive coverage.
Credit History – In many states, a good credit history can result in lower insurance premiums. However, not all states allow the use of credit as a premium calculation factor.
Claim History – A history of claims can indicate a higher risk and thus increase insurance costs.
Safety Features and Anti-theft Devices – Cars equipped with certain safety features and anti-theft devices may qualify for reduced premiums.
Vehicle Use – Cars that are driven more often or over longer distances can have higher comprehensive coverage costs.
Insurance Score – Similar to credit scores, insurance scores are used by some insurers to determine the risk of insuring a driver.
Age of Vehicle – Newer vehicles might cost more to insure; however, the value decreases over time which may reduce the premium.
Custom Parts and Equipment – Additional customizations or equipment can raise the cost of insurance since they add to the value of the car.
Parking and Storage – Vehicles parked in a garage or secure location may have lower premiums compared to those parked on the street.

When applying for comprehensive car insurance, each of these factors will be weighed to determine your premium. It’s important to discuss these details with your insurance provider to understand how each factor specifically impacts your individual rate.

For a more in-depth discussion about the factors that affect your insurance rates, see our Car Insurance 101 article titled Drive Your Car Insurance Cost Down: Understanding Rate Factors

How to know if you should buy comprehensive coverage

Deciding whether you need comprehensive coverage involves assessing various personal factors and weighing the potential risks against the cost.

Key considerations that can help determine if comprehensive coverage is necessary

Vehicle Value – If you drive a newer or higher-value vehicle, comprehensive coverage may be a good idea because the cost to repair or replace your vehicle will be significant in the event of damage.
Vehicle Loan or Lease – If you’re still paying off a vehicle loan or you’re leasing your vehicle, your lender or leasing company will typically require you to carry comprehensive coverage to protect their investment.
Risk of Non-Collision Events – Consider the area where you live and park your vehicle. If it’s prone to severe weather, high crime rates, or has a high incidence of animal collisions, comprehensive coverage could be a prudent choice.
Cost of Coverage – Compare the cost of the premium plus the deductible to the current value of your vehicle. If your vehicle is older and not worth much, the cost of insurance may outweigh the potential benefit.
Personal Financial Situation – If you have the financial means to repair or replace your vehicle without causing economic hardship, you might opt to forego comprehensive coverage. However, if such an unexpected expense would be financially challenging, insurance could offer valuable protection.
Risk Tolerance – Some drivers are more risk-averse than others. If you would feel more at ease knowing your car is covered for a variety of incidents, comprehensive coverage might be worth the expense for peace of mind.
Savings and Emergency Funds – If you have a robust emergency fund that could cover the cost of replacing your vehicle, you might not need comprehensive coverage. Conversely, if you don’t have substantial savings, insurance could safeguard you from financial strain.

Ultimately, you should consider how each of these factors applies to your specific situation. It’s often beneficial to discuss your options with an insurance agent who can provide personalized advice based on your particular circumstances and help you make an informed decision.

In the end, unless your financing company is requiring comprehensive coverage, then the decision to buy it completely up to you.

It’s important to take the factors we discussed into consideration both when making your decision whether or not to opt for comprehensive coverage and also when choosing your deductible.

Claim examples covered by comprehensive coverage

We covered the actual perils that comprehensive car insurance will cover, but it can be more useful to you as a reader if we use some actual examples of claim scenarios that would be covered.

Animal Claims

Deer Collision – Driving through a wooded area, a deer unexpectedly leaps onto the road and you collide with it, causing significant damage to your car’s front grille and hood.
Rodent Damage – Mice nest under your car’s hood during the cold winter months, chewing through wiring and insulation, resulting in electrical damage.
Bear Break-In – While camping, a bear smells food inside your vehicle, breaks a window to gain entry, and causes extensive damage to the interior of your car.
Bird Strike – A large bird, like a hawk, strikes your windshield while you’re driving, cracking the glass and necessitating windshield replacement.
Livestock Accident – While driving near a farm, a cow escapes its enclosure and bumps into your parked vehicle, denting the door and breaking the side mirror.

Natural Disaster Claims

Hailstorm – A sudden, severe hailstorm pelts your vehicle with ice balls, leaving dents and broken glass.
Flood – Rising waters from a nearby river overflow during a torrential downpour, submerging your vehicle and causing water damage to the interior and engine.
Wildfire – Ashes and debris from a nearby wildfire fall on your vehicle, and the intense heat and flames scorch the paint and melt exterior plastic components.
Earthquake – An earthquake shakes the ground, causing a tree to fall onto your vehicle, crushing the roof and shattering windows.
Tornado – A tornado rips through your neighborhood, picking up debris that breaks windows and causes body damage to your parked vehicle.

Falling Object Claims

Tree Limb Collapse – During a storm, a heavy limb from an old tree breaks off and falls, crushing the roof of your car.
Ice Sheets – A large sheet of ice slides off a rooftop due to thawing, landing on your car’s hood and causing a sizable dent.
Rocks from Cliff – While parked near a cliffside, a minor rockslide occurs, and several rocks tumble down onto your vehicle, shattering the windshield and denting the bodywork.
Construction Debris – While driving past a construction site, a piece of unsecured building material falls from scaffolding and dents your trunk.
Parking Garage Collapse – A section of concrete from the ceiling of a parking garage crumbles, landing on your vehicle and damaging the chassis.

Glass Breakage Claims

Vandalism – Someone smashes your car’s side window during an act of vandalism, leaving shattered glass strewn across your car’s interior.
Flying Debris – While driving on the highway, a piece of debris from a truck flies up and cracks your windshield, requiring a full replacement.
Golf Ball Hit – Your car is parked near a golf course, and an errant golf ball strikes the rear window, shattering it.
Hail Damage – A sudden hailstorm with large hailstones breaks your sunroof and leaves you in need of glass repairs.
Low-Hanging Branch – While backing out of a space, you don’t notice a low-hanging branch which scrapes across and breaks your vehicle’s side window.

Water and Flooding Claims

Flash Flood – After parking your car in what is usually a safe area, a sudden flash flood occurs, and rising water levels inundate your vehicle, causing extensive damage to the electrical systems and upholstery.
Hurricane – A hurricane sweeps through your region, and your car, parked outside, is flooded by the storm surge, leaving a waterline halfway up the doors and a non-functioning engine.
Street Flooding – Heavy rain causes the city sewers to back up, leading to street flooding that submerges your car’s lower half, damaging the starter and other critical components.
Levee Break – A nearby levee breaks due to heavy rains, and the water quickly covers your neighborhood, submerging your car and leading to total loss due to water contamination and engine damage.
Snow Melt – An unusually rapid spring thaw causes snow melt to enter your garage, where it damages your car’s interior and causes mold to form on the seats and carpeting.

Fire Claims

Engine Fire – While driving, an electrical fault in your car’s engine compartment sparks a fire, resulting in extensive damage to the engine and the surrounding area.
Garage Fire – A fire starts in your home’s garage where your car is parked. The flames spread, and your car is damaged by fire, smoke, and soot.
Wildfire – Your vehicle is parked outdoors when a rapidly spreading wildfire engulfs the area. Despite efforts to save it, your car is severely damaged by the fire.
Arson – An unidentified person deliberately sets your car on fire, causing total loss of the vehicle.
Adjacent Car Fire – The car parked next to yours in a public lot catches fire due to a mechanical issue. The fire spreads to your car, causing paint blistering and damage to the side panels and windows.

These types of claims are some of the more common claims filed under comprehensive insurance, but there are so many more things that can happen to your vehicle that would be covered.

Comprehensive insurance provides peace of mind and a financial safety net to meet those unexpected expenses that come with vehicle ownership.

Hopefully you now understand the importance of this coverage, how it works, what can impact the cost, and most importantly, you can now use that information to better tailor your own comprehensive coverage to your needs.

During his career as an independent insurance agent, Ryan Grabenstein was appointed with Progressive, Allstate, Nationwide, Travelers, and many smaller regional and mutual companies. He has a Bachelor's degree in Finance from the University of Nebraska at Lincoln and Certified Insurance Counselor (CIC) personal and commercial lines training.