When most people think of comprehensive coverage on their auto policy, they assume that it will cover just about everything.
Although this is a false assumption, it’s logical if you look at the definition of “comprehensive.” Here’s what Meriam-Webster has to say about the word:
Yes, comprehensive coverage provides a lot of protection for your vehicle but unfortunately, the coverage is not as broad as one might assume.
In my humble opinion, the insurance industry, especially auto insurance companies, are guilty of confusing their consumers with acronyms like UM, BI, and PD and assigning inaccurate descriptors of the coverages they offer. Just saying…
A personal auto policy was designed to be a package of coverages that applicants can cherry-pick to meet their needs, and that’s a good thing. Consumers, however, need to understand how each coverage can protect them and their vehicle(s) but even more importantly, how they may fall short of being “comprehensive.”
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What is Comprehensive Insurance in an Auto Policy?
Comprehensive coverage is property coverage and not casualty coverage. This means that comprehensive insurance protects your car, not you. Comprehensive picks up where collision coverage leaves off by covering your car for damages that result from events that are typically not under your control.
- Damage to your car resulting from vandalism or civil disobedience
- Damage resulting from natural disasters like hurricanes, tornadoes, earthquakes, floods, lightning, and hail storms
- Accidentally hitting an animal or any other non-stationary object in the road
- Theft of your vehicle
- Falling objects like tree limbs, golf balls, and baseballs
- Damage resulting from a fire or explosion
There are a variety of instances when you might think comprehensive will cover damage to your vehicle when it actually won’t.
For example, you are driving your car when a deer comes on the road and you swerve to miss the deer and crash into a tree. If you had hit the deer and damaged your car, your comprehensive coverage would pay (minus your deductible). But, since you swerved and ran into a tree (stationary object) and crumpled your front end, your collision coverage would pay for the damages (subject to your deductible).
Here’s another one. Your windshield is almost always covered by your comprehensive coverage. In fact, more comprehensive claims are a result of a chipped or cracked windshield. However, if you inadvertently drive your car into a ditch and the damage to your vehicle includes a broken windshield; your collision coverage would pay instead of your comprehensive coverage.
Can I get Comprehensive without Collision?
Yes, you do not have to carry collision coverage to purchase comprehensive coverage but not the other way around. When you want collision coverage, your insurance company will require you to carry comprehensive coverage as well.
For example, if you have an older model vehicle that is paid for and your major concern is windshield repair because you’ve had to pay for a cracked windshield out-of-pocket several times in the past, you can purchase comprehensive insurance to mitigate that risk. Additionally, your comprehensive coverage would protect your vehicle against all of the events listed above.
In today’s economy, many vehicles have very expensive windshields because a lot of them contain technology that must be replaced if the windshield is broken so paying out-of-pocket can be extremely expensive.
Do States require Comprehensive Insurance?
Each state is only concerned about your ability to pay liability claims so they do not require drivers to carry insurance to protect their vehicles. If, however, your vehicle is financed or a lease vehicle, the lender or leasing company will require you to carry comprehensive and collision insurance to protect their collateral for the loan (your car).
What if my Car is Stolen?
If your car is stolen and not recovered, your comprehensive insurance will pay to replace your vehicle plus the cost of the sales tax. What they will pay for replacing your vehicle will be an amount equal to the “actual cash value” of your car at the time of the claim. In simple terms, the company will pay what your vehicle cost new minus depreciation.
If, however, your car is recovered with damage resulting from the thief hitting a stationary object like a tree, your collision coverage would pay for the damages rather than your comprehensive coverage. If the car was found in an orange grove after being set on fire (happens in Florida a lot), your comprehensive coverage would pay because the fire would be considered vandalism which is covered by your comprehensive coverage.
How Much Does Comprehensive Coverage Cost?
The premium you’ll pay for Comprehensive insurance largely depends on the car you drive and the deductible you select.
The deductible is the amount you are willing to pay out-of-pocket to repair or replace your vehicle. For comprehensive coverage, the deductible will typically range from zero to $1,000. Although many applicants ask for a lower deductible since they don’t want to pay out-of-pocket, they forget that comprehensive insurance covers stolen vehicles and having a very low deductible can be expensive.
If your main concern is windshield coverage, having a very low deductible but higher insurance rates may not make much sense because unless you drive a luxury car, windshield replacement is not all that expensive.
Why Take Chances?
If you’re like most car owners, your car is important to you and in some cases, your most valuable asset. Why not protect your vehicle with comprehensive and collision coverage so you can stay out of your savings account to repair or replace your car if it’s damaged, totaled, or even stolen?