Comprehensive coverage is like bad luck insurance for your car. It pays for damage to your vehicle from just about anything except a traffic collision or rollover. That includes a wide array of random events outside your control, from a chipped windshield or hail dent to explosions or damage from riots.
While comprehensive insurance is optional as far as your insurer and state government are concerned, lenders typically require it if you finance or lease a car. Here’s a little more about what comprehensive car insurance will pay for, plus a quick way to know if the coverage is worth what it costs.
What comprehensive insurance covers
“Comprehensive” doesn’t mean full coverage when it comes to insurance — damage or injuries you cause to others aren’t included, nor are injuries you suffer when you’re at fault in a wreck. Liability insurance, which is required in every state except New Hampshire, covers those events.
Generally, you’d file a comprehensive insurance claim if your car is damaged by:
- Hail, floods or lightning from thunderstorms, hurricanes or tornadoes.
- Falling objects, such as a tree limb.
- Fire or explosions.
- Hitting an animal.
- Vandalism or civil disobedience, such as a riot.
Comprehensive insurance also pays to repair glass damage to your windshield, in many states.
In most cases, comprehensive insurance is subject to a deductible.
In most cases, comprehensive insurance is subject to a deductible, a predetermined amount subtracted from a claim check, typically $500 to $1,500. So if you had a deductible of $500 and filed a comprehensive claim for damage sustained during a hailstorm, you’d receive a check for the cost to repair the damage minus $500. If the vehicle was destroyed by the hail, your insurer would subtract $500 from your car’s value before the storm and send you a payment for that amount.
Once the repair cost exceeds the value, or even gets close to it in some cases, the insurer declares a car totaled. You could still opt to fix your car, in which case your insurer would subtract its salvage value from your payout. The car would also be recorded as salvaged on the title. Some auto insurance companies won’t cover salvaged cars or will charge more to do so.
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The cost of comprehensive insurance
In many cases, you can’t buy comprehensive insurance without collision coverage, or vice versa. This can be because your auto lender requires both, or your insurer requires one to purchase the other. But since collision claims are far more common, collision tends to cost a lot more than comprehensive. See info on both in our comprehensive and collision insurance explainer.
Do you need comprehensive insurance?
Comprehensive insurance will never pay out more than the value of your car.
Comprehensive coverage becomes less valuable as your car depreciates since it will never pay out more than the vehicle’s value, minus your deductible. So if you don’t have a financing contract that requires it, at some point you may decide to forgo comprehensive insurance.
To know whether comprehensive coverage is worth what it costs, first consider the value of your car and your deductible. If you have a $1,500 comprehensive deductible on a vehicle worth $1,500, you’re paying for insurance that won’t pay out when you need it.
Then, consider how much you’re paying for the coverage, which you can find on your auto policy’s declarations page. If it comes itemized on a monthly bill, you can find it there too, or in your insurer’s web portal. If your premium for the policy period and deductible add up to more than your car is worth, comprehensive coverage won’t benefit you.
Here’s the math:
- Subtract your comprehensive deductible from your car’s value. (If you could easily pay this amount out-of-pocket in a jam, you could cut the coverage, knowing you’d have to pay for your own car’s damage.)
- Take that amount and subtract the cost of your comprehensive coverage for the policy period, usually six months.
If you see:
- A negative number, you’re paying more for comprehensive coverage than it’s worth.
- A small but positive number, comprehensive coverage can still benefit you, but a potential claim check would be small. Since it’s unlikely you’ll file a claim in a short time, it might be worth the extra pocket money to you to bet on your own good luck.
- A large and positive number, or there’s no way you could come up with the amount in an emergency, keeping comprehensive coverage makes sense.
Even if you decide comprehensive insurance is worth it for your car now, revisit this math as your car ages and you get new car insurance quotes.