Comprehensive car insurance pays for losses that don’t occur as the result of a road accident. If a thief makes off with your car or if a storm or other natural disaster damages your car, comprehensive coverage can help pay for the repair or may replace it in full.
Most states don’t mandate comprehensive auto insurance, but you may want to think about it if your car has a high market value. As an add-on, it can even be somewhat cheap. Comprehensive insurance is part of what insurers sometimes call a “full-coverage auto policy.” Still, if you buy or lease a new vehicle, you might need extra coverage to round out its protections.
Here you’ll learn about this type of insurance in great detail, so you can decide whether it’s a smart purchase for your car or whether to go without.
Definition and Examples of Comprehensive Auto Insurance
Comprehensive car insurance—also referred to as “other than collision” coverage—pays to repair your vehicle if it sustains damage caused by accidents that are not the result of driving or even on the road. For instance, they might involve animals, falling objects, fire, vandalism, or weather events. Comprehensive insurance will also help pay to replace your car if it is stolen.
Here are a few other names used for comprehensive coverage:
- Other than Collision
- Storage Insurance
- Fire and Theft
What Does Comprehensive Insurance Cover?
Comprehensive car insurance only covers losses caused by events that do not occur from a normal collision with another vehicle or an object, like a fence or telephone pole. Although damages caused by hazards “other than collision” might seem broad, comprehensive coverage does have its limits.1 They include only a few types of perils:
- Animal contact, such as crashing into a deer
- Broken, chipped, or cracked windows or windshields
- Earthquakes, floods, hail, hurricanes, and tornadoes
- Explosions, fires, and smoke
- Falling objects, like a tree limb
- Auto theft, stolen parts, or damage caused during an automobile break-in
- Vandalism, such as if someone eggs or keys your car2
Comprehensive policies vary by insurer. Some providers may include a few extras in their comprehensive coverage, like rental car reimbursement and towing. Others may only cover these expenses if you purchase the extra options.
Comprehensive coverage may also pay to repair or replace a broken window or windshield. Glass repairs are subject to your policy’s deductible, so you will first need to pay some amount out of pocket. But some insurers offer the option of “full glass coverage,” and others offer full glass coverage with no deductible.3
What Does Comprehensive Insurance Leave Out?
Comprehensive insurance does not cover collision damage. This applies whether you collide with another car or with an object such as a building, fence, or utility pole. To cover these types of damages, you need to purchase collision insurance. Comprehensive coverage also excludes damage caused by hitting a pothole, along with regular wear and tear on belts, brakes, hoses, tires, and windshield wipers.
How Comprehensive Auto Insurance Works
Let’s say you emerge from your house after a windy night to find that a tree branch has fallen onto your car’s roof, leaving a massive dent. Your comprehensive insurance covers this type of damage, so you can file a claim and await your payout. Here are a few basic factors that will affect the process and the payout.
Comprehensive auto insurance is subject to a deductible. Choosing a high deductible can help keep your premium affordable. Although it also limits the payout you’ll receive if you file a claim. For instance, if you have a $1,000 deductible and your vehicle sustains $1,500 in storm damage, you’ll have to pay $1,000 for repairs, and the insurance company will only pay $500.
Often, you can choose a comprehensive deductible that is separate from the one on your collision coverage. For instance, you could choose a $2,000 collision deductible but a $500 comprehensive deductible.
You may choose your deductible based on how much you can afford to pay out of pocket. A comprehensive deductible of $1,000 or more might be a good choice if you can afford to pay for minor repairs, like a chipped windshield. But if someone steals your car, the payout might not be enough to replace it. Choose your deductible wisely because it applies to each and every claim you file.
Actual Cash Value Payout
Typically, comprehensive insurance pays actual cash value for your car if it is stolen or fully totaled by a covered peril such as a flood. Note, this is not the amount you paid for the car. Actual cash value is a way to arrive at a figure that is closer to the current market value, or how much someone might pay to buy your car at the time of the event.
Actual cash value applies depreciation to your car’s value based on its age, condition, make and model, and mileage.4 The average car depreciates by 49.1% during its first five years, but these rates vary widely. For instance, a Jeep Wrangler will depreciate at a rate of about 32.8% in its first five years, while a Lincoln MKZ will depreciate by 67.1%.
Your car’s actual cash value and your policy’s deductible work hand in hand to determine how much you’ll receive if it’s stolen or totaled. For example, if your 2018 Chevrolet Malibu valued at $10,322 is stolen, and you had a $500 deductible, you’d receive a maximum payout of $9,822. But if you had a $1,000 deductible, the most you’d receive would be $9,322.
Since cars depreciate so steeply and rapidly in their first five years, if your car is newly financed or leased, you may want to think about adding gap insurance. Many car dealers or lenders require it. If your financed vehicle is stolen or totaled in its first couple of years, the insurance payout won’t likely provide enough to pay off your auto loan.
But if you buy gap insurance, the coverage will pay the difference. For example, suppose you buy a new 2021 Toyota Highlander 4WD for $34,412. If a thief steals it in the first year, the insurer will likely settle for around $32,086. If you don’t carry gap insurance, you’ll be on the hook for $2,326 in outstanding car payments. But if you do, the coverage will kick in to fill that gap.
Gap insurance is advisable if you:
- Finance a vehicle for five years or more
- Lease a vehicle
- Make a down payment of less than 20%
- Buy a car with a high depreciation rate
- Roll over negative equity from a previous car into a new car loan5
How Much Does Comprehensive Coverage Cost?
For most drivers, comprehensive can be fairly cheap. The cost varies per car and per driver, with premiums adding about $134 a year.2 Even a windshield replacement can cost hundreds of dollars if you don’t have coverage, and cracked windshields are common. Adding comprehensive to your policy could save you hundreds or thousands of dollars in certain types of repair costs.
Do I Need Comprehensive Insurance?
State laws do not require you to carry comprehensive auto insurance.7 However, most leasing companies and lenders require you to buy the coverage for leased and financed vehicles. Lenders won’t have much to say once you’ve made your last car payment, though, and it is up to you. But you should look to your own situation to decide. If you can afford comprehensive coverage, it might still be a good idea.2
Think also about whether you can afford to buy another car if yours is stolen or totaled by a covered peril. If you don’t have the cash to buy a new car, or even make a down payment, comprehensive coverage can provide good financial protection. To take it a step further, think about the role of your car in your life now. Do you use it to commute to work? How much would it cost to arrange other transport if you lost it? As you can see, many personal factors can affect your choice as well.
One Method to Help You Decide
When considering comprehensive insurance, first assess how much your car is worth. Consumer websites such as Kelley Blue Book can provide a value based on your car’s age, condition, location, mileage, make, and model. If your car is worth $2,000 or more, it may make sense to buy comprehensive insurance. But after its value falls below $1,000, you may not need it, especially once you factor in the cost you would pay anyway to meet the deductible.
Comprehensive Insurance vs. Collision Insurance
Many people are confused by having more than one type of insurance apply to their car. The important thing to note about collision and comprehensive coverages is that they don’t overlap. Collision insurance pays to repair or replace your car if it is damaged or totaled in a collision with another vehicle or object. Comprehensive coverage covers non-collision losses caused by a defined set of hazards.8