Comprehensive insurance

What does comprehensive coverage do?

Comprehensive insurance (COMP, Other Than Collision, OTC) covers your insured vehicle for physical damage losses resulting from incidents other than collision.  This normally includes coverage for:

• Theft
• Vandalism
• Glass damage (such as a broken windshield)
• Damage sustained from hitting an animal or bird
• Damage from falling objects or missiles
• Fire
• Floodwaters
• Damage sustained due to severe weather or natural disaster -- such as wind storm, hail, hurricane, tornado, etc.

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Comprehensive is also known as “other than collision” coverage because as the list above shows, it pays for incidents that weren’t the result of your vehicle being in a collision. 

In some countries, such as the United Kingdom, comprehensive coverage different in that it's the highest level of auto insurance and will cover not only damage one’s own car, but also includes third-party coverage for damages the driver has done to others (what we call liability coverages in the U.S.). 

In the U.S., comprehensive coverage is not an all-inclusive type of insurance coverage but instead a type of physical damage coverage that only pays for the covered perils listed in your policy, subject to limitations or exclusions specified by your insurer and less the deductible you choose. 

To have physical damage “full coverage” on your vehicle, you need to obtain not only comprehensive but also collision coverage.  Collision will cover you if your car hits, or is hit by, another vehicle or object.  Some insurance companies will not offer you comprehensive coverage unless you also carry collision coverage as part of your car insurance policy.

When obtaining a quote for comprehensive coverage, you will need to choose a deductible amount. A deductible is the portion of a claim that you’re responsible for paying before your insurance benefits start to pay out.

Usually, you can choose for your comprehensive deductible an amount anywhere from $100 to $2,500 (deductible choices vary according to state laws and insurance company guidelines). Most car owners choose a deductible of between $250 and $1,000.

Generally, the higher the deductible the less expensive your premium will be and the lower your deductible the higher your comprehensive premium will be, because the insurer is taking on the risk of the possibility of them paying out more for claims.  

A higher deductible can substantially lower the cost of insurance premiums, but that is due to you having to pay more out-of-pocket before your comprehensive benefits start up. (See Will higher deductibles save you money?”)

Take your own finances into account when choosing a deductible.  Saving money on your premium is nice, but do you have the ability to take on a larger out-of-pocket expense when making a claim?  For example, if you set your deductible at $1,000 and your car sustains damages totaling $1,800, you will pay $1,000 and your insurance company will pay $800. 

Deductibles are normally due per incident, so you will have to pay your deductible amount out every time you make a comprehensive claim.  The exception being if you live in a state where laws require the deducible to be waived for windshield claims. (See “Will your insurance pay for your cracked windshield?”)

Is comprehensive coverage mandatory?

Comprehensive insurance is not required by any state.  Most states require property damage liability so that your insurer will pay (up to your limits) if you damage other people’s vehicles or property, but states do not mandates that you carry coverage to pay for damages to your own car.

However, if you have a loan or lease on your vehicle, then your lienholder can (and usually will) require that you carry this coverage and may mandate the specific deductible amount you have to select. 

If want to lower your insurance premium by raising your deductible, while your car is still financed, be sure to check with your lienholder to see if they will allow a higher deductible than what you are currently carrying.

What happens if I don’t have comprehensive coverage?

Without comprehensive coverage, you are unable to make a car insurance claim if your vehicle receives physical damage that is considered “other than collision” damage by your insurer.  This leaves you personally responsible to pay for the damages, unless there is someone else found liable for the damages (such as a vandal or car thief) that are known and available for you to go after for the repair costs.

With a newer, high valued car, you will usually want this added protection for your vehicle, whether you have financed it or not.  If your car is stolen soon after you buy it, you don’t want to be out the full cost of a replacement vehicle.  (See “Insure your car from the showroom to the junkyard”)

If you have an older car with a low value (without a lease or loan on it), you may not want to pay for this coverage since if the car is damaged, or totaled, the low insurance compensation amount may not be worth the premium paid out.  (See “Is it time to drop comp and collision”)

Knowing how much your vehicle is worth can help you decide if comprehensive coverage is worth the extra cost.  Find out the current value of your car by using appraisal tools offered on sites such as Kelley Blue Book (KBB), NADAguides, and Edmunds.

Get tips here on how to shop for auto insurance when buying a new car.