What is Comprehensive Auto Insurance Coverage?
Comprehensive auto insurance is a type of insurance coverage that protects against physical damage on your car, and is often referred to as “other than collision” (OTC) coverage, or simply “Comp”. The comprehensive coverage of an auto insurance policy can be a little confusing – so let’s take a look and lay it out in an easy to understand fashion.
Auto insurance has two general components – Liability coverage, and Physical Damage coverage. Liability, which is required in most states, is referred to as Bodily Injury Liability, and provides coverage in the event of bodily injury or death for which you are responsible. Physical damage coverage, which is usually optional, covers the cost of damage repairs (minus the deductible) on your car incurred as a result of some act or event that is covered in the insurance policy.
Within the Physical damage coverage component – there are two main, distinct types of coverage – collision and comprehensive. Collision covers damage to your car when your car is damaged in an accident. When your car collides with another object – or overturns or rolls – your collision coverage pays for the repairs. Colliding with an animal such as a deer is covered not in Collision, but in the Comprehensive component. Comprehensive covers physical damage outside the realm of what is covered in Collision.
Many people mistakenly interpret the term “comprehensive coverage” to mean that they are covered for any sort of damage to their cars. This is not true. Comprehensive coverage only pays the cost of damages that occur as a result of a non-collision incident. If you do not have collision coverage, you end up paying for the expenses incurred in an accident. Also, drivers should be aware that comprehensive covers the cost of repairing or replacing the car only, and does not provide any restitution for personal items in the car that were damaged or stolen. If you have expensive stereo equipment in your car, for example, you will want to invest in a separate insurance policy that covers personal property. Additionally, Comprehensive also does not offer protection against damage caused by normal road use.
What Comprehensive Covers
- Hail, water, or flooding
- Damage resulting from an animal
- Glass Breakage
- Missiles or falling objects (the term missiles used here does not refer to the military context – instead refers to any flying or propelled object)
Comprehensive does not cover theft or vandalism caused by family members or employees. Some policies may offer an extension that covers you when you are driving a car other than your own (though this extension normally has reduced coverage benefits). It’s important to read your policy carefully to learn what is covered and what is excluded.
Can you purchase only comprehensive and not collision? Some insurance companies will actually allow this is certain situations. Most insurance companies, however, do not allow you to purchase collision without comprehensive coverage.
Cost of Comprehensive Coverage
As with any component of auto insurance, cost is driven by the following factors; the age of the driver, the drivers experience, the value of the car, the area where the car will be driven, and the estimated annual mileage. Always compare the quotes of Auto Insurance companies online to find the lowest cost insurance that meets your needs.
Weighing the cost of the insurance coverage against the value of the vehicle will show if it is cost-effective to carry this coverage at all. Comprehensive and Collision coverage’s always have a deductible, which can be as cheap as $200 and as expensive as $1,500. A higher deductible equates to a lower insurance premium.
Who Needs Comprehensive Coverage?
Comprehensive is not required by any state – as states are more concerned about the liability coverage. However, if your car is either being financed or leased – the financing company will usually require physical damage coverage.
For older cars you may consider excluding collision and comprehensive coverage since coverage is normally limited to the cash value of the car. Comprehensive coverage is highly recommended in case your car is worth over $4000. You may also find it valuable if you believe your car is susceptible to theft.