- What is the meaning of comprehensive insurance?
- How much does comprehensive coverage cost?
- Is comprehensive coverage mandatory?
- What is a comprehensive deductible?
- What happens if I don’t have comprehensive coverage?
- When should I file a comprehensive claim?
- Is comprehensive insurance worth it?
- How much is the average comprehensive claim?
- Is comprehensive insurance full coverage?
What is the meaning of comprehensive insurance?
Comprehensive insurance is optional car insurance that covers damage to your car from incidents other than collisions. This normally includes coverage for:
- Glass damage (such as a broken windshield)
- Damage sustained from hitting an animal or bird
- Damage from falling objects or missiles
- Severe weather damage
You need to obtain not only comprehensive but also collision coverage to have physical damage or “full coverage” on your car. 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.
The value of the car, your driving record, the deductible you choose and repair costs determine the cost of comprehensive coverage, but it is usually very affordable. The average annual cost nationwide for comprehensive coverage is just $192, according to a rate analysis by CarInsurance.com. That’s not much to pay to ensure you get the actual cash value (ACV) for your car, minus the deductible, if your car is totaled. ACV is how much your car is worth on the market before it sustained damages.
Comprehensive claims will not raise your rates unless you file multiple claims in a short period.
How much does comprehensive coverage cost?
The average cost of comprehensive insurance is $192 a year, so that’s just $16 a month, based on a CarInsurance.com rate analysis.
Enter your state in the search field in the table below to see the average comprehensive insurance cost, per year, for your location. You’ll see the following states are the cheapest, coming in at $100 or below, or about $90 less than the national average:
- New Hampshire
The following states are the most expensive, coming in around $400, or about $200 more than the national average:
- South Dakota
- North Dakota
|State||Average Annual Comprehensive Rate|
Is comprehensive coverage mandatory?
Comprehensive insurance is not legally 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 require 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 is a comprehensive deductible?
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.
The higher the deductible the less expensive your premium will be, because the insurer is taking less risk of paying out for claims.
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.
What happens if I don’t have comprehensive coverage?
Without comprehensive coverage, you cannot make a car insurance claim if your vehicle receives damage that is considered “other than collision” damage by your insurer. This leaves you personally responsible to pay for the repairs, unless there is someone else found liable for the damages (such as a vandal or car thief) that is 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.
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.
When should I file a comprehensive claim?
Typically, comprehensive claims won’t raise your rates. In cases when it does, it’s not by much. CarInsurance.com’s rate analysis show’s the average increase to your rates after filing a comprehensive claim is under $40. Still, you shouldn’t file a claim if the repair cost is lower or near to your deductible amount. For instance, if you have damages that cost $450 to repair and your deductible is $500, it may not be worthwhile to file a claim, as you’re just saving $50. Filing multiple claims, especially if within six to 12 months of each other, could cause your insurance rates to rise, regardless of the type of claim.
Is comprehensive insurance worth it?
Comprehensive coverage is generally worth it if your car is less than 10 years old. On average, you’ll pay less than $20 a month for the protection, so it’s a bargain. However, as your car ages, and the value goes down, the benefit of comprehensive coverage dwindles because it only pays out up to the value of your car, minus your deductible. That means at some point it might not make sense to have comprehensive because you’re paying more for coverage than you would get if you ever filed a claim. So you need to do a quick calculation to see if your rate and deductible total more than the value of your car. If it does, comprehensive isn’t worth it.
Here’s how to figure out if comprehensive coverage makes financial sense for you
- Find the value of your car from Kelley Blue Book, the National Automobile Dealer’s Association or other pricing guide. You’ll need to know the make and model, year, mileage and other variables.
- Subtract the amount of your deductible from your car’s value. If you feel comfortable paying that amount out of pocket, you could drop the coverage. Then subtract the cost of your coverage from that amount.
- If the number you get a negative number, it’s no longer worth it to pay for comprehensive. If you get a small number, it might be worth keeping, knowing that any claims pay out won’t be huge. If you get a substantial number, comprehensive is worth it.
How much is the average comprehensive claim?
The average amount paid for a comprehensive claim was $2,033 in 2018, up 4.4% annualized from $1,440 in 2010, According to the latest data from the Insurance Research Council (IRC). Over the same period, overall CPI inflation was just 1.8%.
Many comprehensive claims are relatively small. Nearly half of comprehensive claims in 2018 were $500 or less. The median payment in 2018 was $546. Large comprehensive claims were uncommon, with 15% of claims in 2018 more than $4,000 and just 3% more than $10,000. However, the percent of claims with payments of more than $4,000 increased from 9% in 2010 to 15% in 2018.
Comprehensive claims payouts vary significantly among states because they are often weather-related. Looking at the three claim years combined, the average amount paid for comprehensive claims ranged from a high of $3,130 in Oklahoma to a low of $1,015 in Utah. States with the largest increase from 2010 through 2018 included Colorado, South Dakota, and Idaho.
Is comprehensive insurance full coverage?
No, comprehensive is not full coverage. It doesn’t cover every type of damage. For instance, liability insurance, which is required to drive legally, pays for damage you cause to other vehicles, and collision insurance, which is optional, pays for damage to your car regardless of fault. The term “full coverage” means you have more than just liability insurance. That means it’s one of the types of car insurance that with liability and collision comprise what is meant by “full coverage.”
— Michelle Megna contributed to this article.