Comp and collision…they go together like peanut butter and jelly. Most people naturally understand “Collision” coverage in their car insurance as it is almost self-explanatory. If you collide (hit, strike, crash, or bump) into something, it’s the coverage that helps cover the cost of the damage as part of a “full coverage” policy. The term “Comprehensive” in auto insurance isn’t truly comprehensive but it’s called that because it is a wide-ranging coverage, again as part of a “full coverage” policy, for many of the things that aren’t under collision. It's sometimes referred to as “other than collision coverage.” Comprehensive coverage helps reduce your risk of having to pay as much out-of-pocket for most types of non-collision incidents.
Car insurance policies are a compilation of various types of auto insurance coverages within a single policy. Such coverages include collision, liability bodily injury and property damage, medical payments and/or personal injury protection, rental reimbursement, comprehensive, uninsured motorist, towing reimbursement and underinsured motorist. Coverage availability varies by State and age of vehicle for some carriers. The comprehensive and collision coverages are also called physical damage coverages. Comprehensive is most often combined with collision to create what is commonly known a “full coverage” (meaning one is legally insured or better with state-required liability and the vehicle, itself, has physical damage coverage if something happens to it. “Full coverage” may also include other optional coverages).
What Does Comprehensive Auto Insurance Typically Cover?
As previously stated, comprehensive coverage provides a wide range of protections. Generally, it applies to situations where you do not actively cause damage to the car, but it occurs. Think of things that happen to your vehicle that aren’t collisions. Here are some examples of what comprehensive may cover:
- Falling objects
- Glass damage
- Flooding
- Car theft
- Vandalism
- Fires
- Storm damage
- Deer/animal damage
Reminder, comprehensive coverage does not cover all risks so read your policy jacket for a description of what your specific policy does cover. Some car insurance companies don’t automatically cover deer damage but offer it as an additional (extra cost) option. Also, none of the above are collision risks.
When do you need Comprehensive coverage?
Answer: When you are required to have “full coverage” to satisfy your car loan or lease obligations. In insurance-speak, when there is the likelihood that significant damage to your car will cause financial hardship (because you still owe the money for it). Car lease and loan contracts often require this physical damage coverage to protect the asset offered as collateral because it will help you pay for repairs to the vehicle, therefore protecting its value for both you and your lender. You may also want to continue the coverage as part of your “full coverage” after your loan is paid. Much of the decision depends on the value of your vehicle. At some point down the road, paying for the physical damage may not be worth it as your car gets older.
Does Comprehensive coverage have a deductible?
Yes. And as with any deductible, the higher the deductible the lower the premium since the policy-holder is willing to retain more of the risk (pay more out of pocket themselves). Buyer beware, however, sometimes the savings of high deductibles aren’t worth coming up with the higher amount to get your vehicle fixed if hit by an uninsured motorist or a deer. Always compare savings over a moderate deductible to make an informed decision. We’ve seen a $1000 deductible save a mere $7 a month over a $500 deductible. We’ve also seen it save $40-$50 a month. Make sure you know your options and what they mean to you.
Summary
Comprehensive:
- Is part of the physical damage coverages available for vehicles
- Covers many non-collision events
- Varies by carrier
- Is usually combined with collision coverage
- Has a deductible
- Is required by lenders and lessors as part of loan/lease contracts
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