No, it is not mandatory by any state law to include Comprehensive insurance on a basic car insurance policy.

Comprehensive coverage normally covers your vehicle for damages caused by something other than collision and thus is referred to by some as OTC (other than collision). For example, Comprehensive insurance covers damage to your car if it is stolen; or damaged by flood, fire, or animals. This is an optional type of car insurance coverages just as Collision is.

While your state may not require you to carry Collision and Comprehensive coverage if you have financed your car with either a loan or lease than normally your lien holder will require you to carry these Physical Damage coverages. Some companies underwiring rules will not allow you to buy Collision without Comprehensive, or vice versa.

Typically, it is the lien holder that requires physical damage, but some carriers have filed rates with the state that required physical damage on financed or leased vehicles. Esurance is one example of a CarInsurance.com insurance company that has this requirement.

Many insurance companies ask if you own your car or if it is financed on the insurance application due to how they have filed their rates and/or to make sure that if the car is financed you carry Physical Damage since it is most likely required by your lien holder. Collision and Comprehensive are the type of physical damage coverage that is usually required if your vehicle is financed or leased. Lien holders normally require these coverages on a vehicle to protect their interest or collateral, the vehicle.

Comprehensive coverage is thus not required by states to be included on all car insurance policies. If your car is financed your lien holder will most likely require it and Collision coverage. Certain insurance companies will also require that you carry Comprehensive and Collision if your car is financed so that you comply with the lien holder’s requirements and because they have filed their rates in such a way that financed vehicles are required to carry these coverages.

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