If you’re making payments on your vehicle, you’ve probably heard of comprehensive insurance. It’s one of the most common types of car insurance available, and it’s required by many lenders for as long as you’re paying your car loan. But even if you’re not financing your car, you may still want to consider carrying comprehensive insurance.
In many cases, comprehensive insurance is all that stands between you and being able to repair your car if it’s damaged by a covered peril, so it’s important to understand how it works and how you can best take advantage of all that comprehensive auto insurance offers.
Here’s everything you need to know about comprehensive insurance, including who needs it, what it covers, and how much it usually costs, among other important considerations.
What is comprehensive insurance?
Comprehensive coverage fills a specific role when it comes to your car insurance. Along with collision and liability insurance, comprehensive car insurance helps protect your car from a variety of possible scenarios. Unlike liability insurance, which covers other vehicles in an accident where you’re at fault, comprehensive insurance provides coverage for your vehicle only when it’s damaged by one of the covered perils listed on your policy.
While collision coverage pays for your car when it’s hit by someone else, comprehensive coverage pays for any damage to your vehicle arising from a source other than a collision with another driver. Comprehensive coverage also costs significantly less than collision coverage and is considered very cost effective for what it covers.
Most lenders require car owners who purchase a car through them to carry comprehensive insurance. This is to protect the company’s investment and, to a lesser extent, you as the owner of the vehicle. But even if you’ve paid your car loan off, you should still consider purchasing comprehensive coverage for your vehicle. A car that’s damaged by a covered peril still requires repair, and unless the vehicle isn’t worth a lot, comprehensive coverage could help take care of this cost.
Chances are that most drivers couldn’t afford to pay the full cost of a vehicle repair, especially with a newer car. Comprehensive insurance helps to defer this cost, covering everything but the deductible, up to the maximum coverage amounts.
What does comprehensive insurance cover?
Comprehensive car insurance will pay for damage to your vehicle caused by:
- Contact with animals
- Natural disasters (such as earthquakes, floods, hurricanes, tornadoes, and volcanic eruptions)
- Theft of the entire car (including parts of the car, such as the airbags)
- Fallen objects (such as trees, branches, ice, or projectiles)
- A civil disturbance (such as a riot)
- A broken windshield or other glass damage
Of course, there are some specific damages that your comprehensive car insurance won’t cover. These include:
- Damage to your car from a collision
- Medical expenses
- Legal fees associated with an accident
- Lost income for you or your passengers (for example, if you miss work after an accident)
- Damage to another person’s car or property from a collision
- Property stolen from your car
For the incidents not covered by comprehensive insurance, your insurance company offers other forms of car insurance to ensure your vehicle is protected.
Who needs comprehensive coverage?
As noted, most lenders will require you to have comprehensive coverage on any vehicle you finance through them. In addition, you should consider keeping or getting comprehensive coverage even if your vehicle is paid off in the following situations.
If you lease a car: You are also required to have comprehensive insurance coverage when you lease a vehicle. In fact, it’s even more important to have such coverage with a leased car, as you’ll have to pay for any devaluation of the car when you turn it in at the end of your lease period.
If you live in a high-crime area: If you live in a neighborhood with a high-crime rate, you should strongly consider comprehensive coverage. Cities and towns with a high population also tend to have a lot of theft and vandalism, and chances are if you live in such areas, you can’t keep your car locked in a garage all of the time.
If you live in an area prone to natural disasters: In places where hurricanes, earthquakes, flooding, or fires are common, you might consider getting or keeping your comprehensive coverage. You never know when disaster might strike in these areas, but if it does, at least your car will be insured against harm from the listed perils.
If your car is worth more than the cost of your insurance premium: If you own a more expensive car, including many luxury and sport model vehicles, you may want to protect it with comprehensive insurance. In most cases, even after an expensive car is paid off, it’s still worthwhile to protect it from harm.
Which states require comprehensive coverage?
Unlike liability insurance, which is required in every state except New Hampshire, comprehensive insurance is considered optional coverage in every state in the U.S. However, as noted earlier, many lenders and leasing companies do require comprehensive coverage.
How much does comprehensive insurance cost?
Many factors, such as your vehicle’s make, model, and year, help determine the price you will pay for comprehensive insurance. Some other factors that can affect insurance cost include:
Your driving Record: If you have a clean driving record, expect to pay less for your car insurance, including for your comprehensive coverage. Drivers with no record of accidents, tickets, or DUIs are considered a better risk and qualify for lower rates.
How many miles you drive: The less you drive, the lower your insurance premiums might be. Typically, driving 7,500 miles or fewer in a year can qualify you for an insurance discount with many insurers. Plus, less time on the road means less potential to have an accident.
Where you live: Living in a high-crime area affects the cost of your car insurance, as does where you typically park your vehicle. Cars parked in a secure garage may qualify for a reduced insurance premium with some companies.
How old you are: Your age plays a big part in determining how much you pay for insurance each month, including comprehensive insurance. Younger drivers will pay higher overall rates than more experienced drivers.
Your gender: Studies show that male drivers are more apt to engage in riskier driving compared to females. These driving practices include speeding, driving under the influence, and failing to use seat belts.
Your credit score: Every driver is assigned a credit-based insurance score. Drivers with poor credit are more likely to file an insurance claim and are considered a higher risk when it comes to insurance. The result is higher insurance premiums.
Your marital status: Fairly or not, your marital status also plays a part in what you pay for car insurance each month. Married drivers pay a lower insurance premium of car insurance, including comprehensive coverage.
Also, keep in mind that most insurance companies won’t allow you to purchase comprehensive coverage on its own. They will also require you to have collision coverage as well.
According to data from Bankrate, here is the average cost of comprehensive insurance by state.
- Alabama: $1,623 (Full Coverage), $469 (Minimum Coverage)
- Alaska: $1,559 (Full Coverage), $373 (Minimum Coverage)
- Arizona: $1,547 (Full Coverage), $555 (Minimum Coverage)
- Arkansas: $1,914 (Full Coverage), $470 (Minimum Coverage)
- California: $2,065 (Full Coverage), $733 (Minimum Coverage)
- Colorado: $2,016 (Full Coverage), $518 (Minimum Coverage)
- Connecticut: $1,845 (Full Coverage), $794 (Minimum Coverage)
- Delaware: $1,775 (Full Coverage), $787 (Minimum Coverage)
- District of Columbia: $1,855 (Full Coverage), $704 (Minimum Coverage)
- Florida: $2,364 (Full Coverage), $1,101 (Minimum Coverage)
- Georgia: $1,982 (Full Coverage), $756 (Minimum Coverage)
- Hawaii: $1,127 (Full Coverage), $345 (Minimum Coverage)
- Idaho: $1,045 (Full Coverage), $307 (Minimum Coverage)
- Illinois: $1,485 (Full Coverage), $442 (Minimum Coverage)
- Indiana: $1,254 (Full Coverage), $367 (Minimum Coverage)
- Iowa: $1,260 (Full Coverage), $252 (Minimum Coverage)
- Kansas: $1,698 (Full Coverage), $410 (Minimum Coverage)
- Kentucky: $2,128 (Full Coverage), $748 (Minimum Coverage)
- Louisiana: $2,724 (Full Coverage), $975 (Minimum Coverage)
- Maine: $965 (Full Coverage), $294 (Minimum Coverage)
- Maryland: $1,877 (Full Coverage), $767 (Minimum Coverage)
- Massachusetts: $1,223 (Full Coverage), $510 (Minimum Coverage)
- Michigan: $2,309 (Full Coverage), $948 (Minimum Coverage)
- Minnesota: $1,643 (Full Coverage), $537 (Minimum Coverage)
- Mississippi: $1,782 (Full Coverage), $492 (Minimum Coverage)
- Missouri: $1,661 (Full Coverage), $448 (Minimum Coverage)
- Montana: $1,737 (Full Coverage), $342 (Minimum Coverage)
- Nebraska: $1,531 (Full Coverage), $335 (Minimum Coverage)
- Nevada: $2,246 (Full Coverage), $860 (Minimum Coverage)
- New Hampshire: $1,275 (Full Coverage), $389 (Minimum Coverage)
- New Jersey: $1,757 (Full Coverage), $847 (Minimum Coverage)
- New Mexico: $1,419 (Full Coverage), $385 (Minimum Coverage)
- New York: $2,321 (Full Coverage), $1,062 (Minimum Coverage)
- North Carolina: $1,325 (Full Coverage), $413 (Minimum Coverage)
- North Dakota: $1,264 (Full Coverage), $285 (Minimum Coverage)
- Ohio: $1,032 (Full Coverage), $328 (Minimum Coverage)
- Oklahoma: $1,873 (Full Coverage), $423 (Minimum Coverage)
- Oregon: $1,346 (Full Coverage), $610 (Minimum Coverage)
- Pennsylvania: $1,476 (Full Coverage), $427 (Minimum Coverage)
- Rhode Island: $2,018 (Full Coverage), $749 (Minimum Coverage)
- South Carolina: $1,512 (Full Coverage), $558 (Minimum Coverage)
- South Dakota: $1,642 (Full Coverage), $275 (Minimum Coverage)
- Tennessee: $1,338 (Full Coverage), $371 (Minimum Coverage)
- Texas: $1,823 (Full Coverage), $524 (Minimum Coverage)
- Utah: $1,306 (Full Coverage), $528 (Minimum Coverage)
- Vermont: $1,207 (Full Coverage), $292 (Minimum Coverage)
- Virginia: $1,304 (Full Coverage), $441 (Minimum Coverage)
- Washington: $1,176 (Full Coverage), $463 (Minimum Coverage)
- West Virginia: $1,499 (Full Coverage), $458 (Minimum Coverage)
- Wisconsin: $1,186 (Full Coverage), $332 (Minimum Coverage)
- Wyoming: $1,495 (Full Coverage), $271 (Minimum Coverage)
How do comprehensive coverage deductibles and limits work?
Like most insurance policies, comprehensive coverage has limits, which include your deductible as well as the maximum amount that your insurance will pay on any one covered claim. The most your car insurance will ever pay out for a vehicle is its actual cash value. Here’s what you should know about the limits, deductibles, and other important factors that contribute to the comprehensive coverage on your vehicle.
Depreciated value: The depreciated, or diminished, value of your car is what you bought it for in the first place minus how long you’ve had it. Depreciated value also comes into play following an accident or damage from a covered peril, with low-quality repairs making the value of your vehicle go down.
Actual cash value: The actual cash value of a car is what the insurance company will pay you to replace the vehicle if it’s totaled in an accident or damaged by a covered peril. This amount is based on the current market value of the vehicle. Each insurance company follows its own process to determine the actual cash value of a vehicle, but generally speaking insurance companies take the replacement cost minus the depreciated value of the car to come up with its actual cash value.
Deductibles: The deductible on your car insurance is how much you personally have to pay before your insurance company will pay out on any claims you file. Both comprehensive insurance and collision coverage have their own deductible, while liability insurance does not have a deductible.
How to choose a comprehensive insurance deductible
Choosing the right deductible on your insurance policy is important because your car insurance deductible affects how much you pay in insurance premiums each month. In essence, the higher a deductible that you agree to, the less you will pay in premiums.
The key is to balance what you pay now with what you could potentially have to pay in the future. Determining what to set your deductible at comes down to a few factors, including how much you can afford to pay up front as opposed to what you could afford if your car was damaged.
If your car is less likely to be damaged, then a higher deductible might be best. Ways to avoid damage include driving safely, driving the speed limit, and parking in a safe and protected area. Keep in mind that if someone hits you, then it’s on their liability insurance to pay for any damage to your car, yourself, or your property.
But maybe you’re not the best driver and you think you might have to use your insurance at some point. In that case, you might be better off paying more each month in insurance premiums for a lower deductible. That way, when an incident occurs, you won’t have to pay as much of a deductible.
Another factor to take into account when choosing a deductible is the overall value of your vehicle. More expensive vehicles cost more to insure. In that case, a high deductible might serve you best as it could lower your premiums substantially.
For a less expensive vehicle, a high deductible might make sense since most repairs would be relatively inexpensive, meaning you would probably be better off not even filing a claim at all. For a lower value car, the difference between a $1,000 and $500 deductible does not give you a significant savings.
Depending on how much you raise your deductible, expect to save between 15% and 30% per month on your comprehensive car insurance coverage by increasing your deductible from $250 to $500, or even 40% by increasing it to $1,000.
What are the differences between comprehensive and collision coverage?
Usually going hand-in-hand, comprehensive insurance and collision insurance are designed to cover different sources of damage to your vehicle. As noted earlier, comprehensive insurance is generally meant to protect you from damage caused by natural disasters, theft, vandalism, civil disturbances, falling objects, fire, glass and windshield damage, and hitting an animal.
Collision insurance, on the other hand, is designed to offer coverage for an accident caused by another driver, a single-car collision (including a rollover), a driver crashing into your parked car, an accident in a rental car, and a collision with an object (such as a mailbox or building).
In some cases, you can mix and match your comprehensive and collision coverage deductibles. If you’re a good driver, having a low deductible for comprehensive insurance while keeping the deductible high for collision coverage can save you money. This is because your vehicle is covered against covered perils that are more likely to happen under your comprehensive coverage, while still affording you protection from accidents that are less likely to happen to good drivers. In addition, comprehensive coverage tends to be cheaper overall than collision coverage.
How to search for comprehensive insurance quotes
When searching for comprehensive car insurance, the first thing you want to do is get a variety of quotes from different insurance companies. Keep the following tips in mind.
Get multiple quotes: You should look for quotes from at least three different companies. This allows you to evaluate the quotes you get against each other and pick the best one for your needs, according to cost, coverage, and other options.
Check out each company’s rating: Before going with any one insurance company, find out what everyone else thinks about them. Are there a lot of customer complaints, and if so, what are the complaints about? Also, what is the company’s typical response time when it comes to claims?
Understand the coverage limits: Before purchasing car insurance from any company, make sure to check their coverage limitations against the other companies you get a quote from. Also look at deductibles to be sure that each company matches up with the others on your list.
Another option is to let Jerry.ai do the searching for you. Jerry takes guesswork out of finding cheap car insurance. As a technology-powered personal insurance shopper, Jerry uses AI to automate the car insurance comparison process, which makes it easy for you to compare and buy while saving money.