What Does Comprehensive Auto Insurance Cover?

June 1, 2019

In most states, car insurance is a requirement. You can’t drive without it. But typically, this means liability insurance, not comprehensive. If it’s not a required insurance policy, what does it cover and do you need it? Keep reading to find out about this coverage.

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Understanding Comprehensive Auto Insurance

Comprehensive auto insurance covers claims that don’t involve a collision. Think of other things that could happen to a car and they typically fall under comprehensive coverage:

    • Falling objects
  • Theft
  • Vandalism
  • Damage from animals
  • Damage from fire
  • Damage from weather

These are just a few examples of things that could happen to your car that would fall under comprehensive insurance. Any incidents that involve a collision with another car or property do not fall under comprehensive insurance.

Comprehensive insurance also doesn’t cover the medical expenses or lost wages for you, your passengers, or anyone in the other car involved in the accident that you caused.

The Limits of Comprehensive Insurance

Comprehensive insurance typically has a deductible. This is the amount you must pay for the damages before the insurance will cover anything. Consider your deductible carefully before choosing it. Make sure it’s an amount that you can comfortably afford to ensure that you don’t put yourself in a bad financial position should you need to make a claim.

Each insurance policy will have different limits for comprehensive insurance. Typically, you can’t get a policy that exceeds the cash value of your car, though. This takes into account depreciation, which means each year you’ll receive a lower limit for your collision coverage. Any amount that you need above the limit to replace your car (should this be the case), would be your responsibility.

What’s the Difference Between Comprehensive and Collision Coverage?

Collision insurance covers you the event of an actual car accident with another car or property. It also covers you in the event that you are in a single-car accident. If you financed your car, this coverage is required. If you paid cash for your car, you can decide if you want it or not, but it’s valuable coverage to have.

Collison insurance covers your car only. If the accident was your fault, your liability insurance will cover the damage to the other person’s vehicle and/or property. Collision insurance does not cover your medical bills, though, that falls under your medical coverage.

Comprehensive insurance covers the ‘other things’ that could happen to your car outside of an accident. Like comprehensive insurance, collision insurance has a deductible and offers actual cash value coverage.

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Do you Need Comprehensive Coverage?

If you finance your car, you’ll likely need comprehensive coverage. If you paid cash, it’s up to you, but it’s valuable insurance to have. Typically, the premiums for this coverage are affordable, and can be adjusted based on the deductible that you choose.

Because of the large number of incidents comprehensive insurance covers, it’s good to have. You can’t predict if you’ll hit an animal while driving or if a tree will fall on your car. While you’d like to think that’s not going to happen, you cannot predict the future. Either of these issues can seriously damage and/or total your car. The insurance would help you recoup some of the money you lost to help you purchase a replacement car.

Do Old Cars Need Comprehensive Insurance?

If you have an older car, it’s up to you if you want comprehensive insurance, assuming that you own it outright and don’t have financing. The best way to determine if it’s worth it is to determine the Blue Book value of the vehicle. That’s the amount you’ll likely receive should your vehicle get totaled.

Can you afford that amount should your car be totaled? What about the repairs, can you afford them? Could you cover the cost of potential repairs without issue? If so, then you may want to skip the comprehensive insurance and save yourself some money every year. If affording the replacement would be difficult, you may want to tack on comprehensive insurance, especially since the premiums are typically affordable.

Does Making a Comprehensive Claim Raise Your Insurance Rates?

Typically, making a comprehensive insurance claim doesn’t make your rates increase. In fact, in some states it’s illegal to increase your rates due to a comprehensive claim since they are ‘no-fault’ claims. There isn’t anyone to place blame on for the accident since it’s not a collision with another vehicle.

If your insurance company does increase your rates after a comprehensive claim, the increase is typically much less than the increase for a collision claim. Typically, any claim on your insurance affects your rates for the next three to five years, but it may be different with a comprehensive claim – ask your agent about the possibilities if you are concerned.

Comprehensive auto insurance isn’t required unless you financed your car, but it’s a good idea to have. Unless you know that you can replace your car or repair it with cash on hand should something total your vehicle, it’s a good, low-cost policy to have on hand to protect you.

Meta Description: Comprehensive auto insurance protects you in non-collision based incidents. Learn about this low cost policy and how it can protect you.

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