Vehicle insurance consists of comprehensive insurance, liability insurance, and collision insurance. Liability insurance is compulsory in most states. But collision and comprehensive insurance coverages are optional, and vehicle owners get them in addition to the liability insurance. About 79% of drivers in the U.S. have comprehensive coverage, and 75% have collision coverage.
A comprehensive insurance policy is also known as “other than collision” coverage. It covers non-collision damages to your car, and it’s significantly cheaper than the collision coverage. Even though comprehensive insurance isn’t compulsory, third parties may require it in some cases.
Having this policy can be helpful, but you should calculate the benefits before taking it. So what does comprehensive insurance cover? Let’s find out below.
What Does Comprehensive Insurance Cover?
Comprehensive insurance covers almost anything that goes beyond your control, except collisions. These include the following causes:
- Damages from a hailstorm
- Dents caused by hitting animals
- Natural disasters
- Theft of the whole car or parts of the car
- Damages from falling objects like tree branches and rocks
- Losses resulting from vandalism
- Broken windshield
What Comprehensive Insurance Doesn’t Cover
Comprehensive insurance doesn’t cover losses that the liability and collision policies already cover. These include:
- All personal injuries: The policy will not cover personal injuries resulting from an accident. It only covers damages to the vehicle and not to you. If another driver causes the accident, their liability insurance will cover the medical cost. If it’s your fault, your health insurance will cover it.
- Injuries you cause to others: Your liability insurance will cover these losses.
- Losses resulting from a collision: These include colliding with another vehicle or object and rolling over. For instance, you can hit a tree, a fence, or a mailbox, while swerving away from a dog. The collision insurance will cover these losses.
In addition, your comprehensive insurance won’t cover:
- Legal expenses
- Damages by potholes
- Valuable items you lose from the car
- Lost income when you miss work due to an accident
Cost of Comprehensive Insurance
According to the Insurance Information Institute, the average cost of comprehensive insurance in 2019 was around $170 per year. This amount varies depending on the state where you live, your driving record, and your car’s value. But it’s usually lower than $300.
On the other hand, the average annual cost for collision insurance is $380. Therefore, comprehensive insurance is significantly cheaper considering the vast number of risks it covers.
Liability insurance has the highest cost, going up to $650 per year. You may find yourself having to buy all three insurance policies.
First, liability coverage is compulsory. Secondly, some insurance providers require you to purchase collision coverage in addition to the comprehensive one. And if you have leased or financed your car, the lender will require you to have both.
Do You Need Comprehensive Coverage?
Generally, new cars need comprehensive insurance. If you live in rural areas where many animals cross the road or in high-crime areas, this policy can benefit you. Also, if you buy a new car on loan, the lender will require you to have comprehensive insurance coverage to protect their interest in the vehicle.
In case of a non-collision accident, the insurance company pays for losses you incur regardless of who’s at fault. If you suffer a massive loss in the accident, you’ll only pay your deductibles, and the insurance company will provide the rest. A comprehensive deductible is the amount of loss you’re willing to cover out of your pocket. The higher the deductible, the lower the insurance cost.
Let’s say your car requires $1,000 to repair after an accident. If your deductible is $100, you’ll contribute that amount toward the repair cost, and your insurance company will pay the remaining $900.
If your car is too old, comprehensive insurance may not be beneficial. For instance, if your deductible is $1,500 and the car’s value is $1,500, the insurance company wouldn’t pay anything if you lost your car.
When deciding whether to get comprehensive coverage, consider the value of your car and the deductible you’re willing to pay. If the difference is minimal, the insurance cost may not be worth it. You may be able to pay the money out of your pocket. A better alternative would be saving money for emergency car troubles and taking measures to prevent car theft.
Choosing a Comprehensive Insurance Provider
When shopping for a comprehensive insurance provider, it’s best to compare each company’s rates. You can contact agents, call the company, or use car insurance quotes on the provider’s website. You’ll be shopping for insurance each time you buy a new car, change location, or make significant changes that affect how you use your vehicle.
The rates you pay will depend on many factors, including:
- Your car’s value and how much it costs to repair it
- Theft and accident cases for your location and car type
- Your age. The cost is higher for drivers under 25
- The frequency of using your car. The more you use it, the higher the premiums
- The crime rate of your location
- Your driving record, such as the number of accidents you’ve caused
- Credit history. The higher it is, the lower the rate
Sometimes insurance companies offer discounts to new drivers, those with clean driving records, and those who’ve completed a defensive driving course.
The Bottom Line
Comprehensive insurance covers a wide range of non-collision accidents. The insurance company compensates you for losses involving the car only, so you won’t be paid for any valuable item stolen from the vehicle or physical harm to your body.
This insurance policy isn’t compulsory. So you can decide to have it or not. However, if you take a car loan, your financier will require you comprehensive insurance coverage.
When deciding whether to buy comprehensive insurance for your vehicle, it’s essential to compare the rates various insurance providers offer. The rates will vary depending on your driving habits, car value, location, and age, among other factors. But you can reduce the rates if you qualify for discounts, such as having a clean driving record.
At FIXD, our mission is to make car ownership as simple, easy, and affordable as possible. Our research team utilizes the latest automotive data and insights to create tools and resources that help drivers get peace of mind and save money over the life of their car.