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.

Comprehensive coverage pays for covered perils, subject to limitations or exclusions specified in your car insurance policy, less the deductible you choose. 

When receiving a quote for comprehensive coverage, you will need to choose a deductible amount.  In general, the range you can choose for a comprehensive deductible is anywhere from $0 to $2,500 (deductible choices vary according to state laws and insurance company guidelines).

A deductible is the portion of a claim that you’re responsible for paying before your insurance coverage kicks in.  A higher deductible can substantially lower the cost of insurance premiums.

You should balance the savings of a higher deductible against your ability to absorb a larger out-of-pocket expense.  For example, if you set your deductible at $1,000 and your car sustains damages totaling $1,500, you will pay $1,000 and your insurance company will pay $500.

Is comprehensive coverage mandatory?

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Comprehensive insurance is not required by any state, but if you have a loan or lease on your vehicle, then your lienholder will normally require that you carry this coverage and may mandate the specific deductible amount you have to select.

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 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.

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.

Disclaimer: This article is for information purposes. It should not be interpreted as a recommendation to buy or sell any insurance product, or to provide financial or legal advice. This information is provided for information purposes only.

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