Nearly all states require car owners to carry auto insurance. Where auto insurance is mandatory, drivers must carry liability policies that compensate victims harmed by their actions behind the wheel for medical expenses and property damage.
Some states require additional coverages, such as personal injury protection — another layer of medical coverage for the insured party and passengers in their vehicle — and uninsured/underinsured motorist coverage, which compensates the policyholder for expenses that would normally be covered by another motorist’s nonexistent or inadequate auto insurance policy.
No states require two other common types of auto insurance coverage: collision coverage and comprehensive coverage. But that doesn’t mean these coverages lack value. Both can reduce the net cost of major repairs to newer, relatively valuable vehicles.
Of course, both forms of protection come with a tangible cost: higher auto insurance premiums. That raises the stakes for drivers uncertain about whether optional car insurance coverage is right for them.
This cost-benefit analysis is particularly uncertain for those considering adding comprehensive coverage, which isn’t as widely understood as collision coverage. The first step to determining whether comprehensive coverage makes sense for you, then, is to understand what it is, what it does and does not cover, and how much it could add to your total auto insurance costs.
Comprehensive Coverage: What It Is and What It Covers
Comprehensive auto insurance coverage pays for repair and replacement costs associated with vehicle damage not caused by rollovers or collisions with other vehicles or stationary objects. Incidents that may result in damage covered by a comprehensive policy include but aren’t limited to:
- Wildlife Collisions. Collision coverage doesn’t extend to collisions with nonhuman animals. Given the amount of carnage deer and other large animals cause on America’s roadways, that’s a notable oversight. Comprehensive coverage includes such damage to your vehicle.
- Other Animal-Related Damage. Stationary vehicles are vulnerable to damage by animals as well. I personally learned this the hard way after discovering that a mouse or squirrel had chewed through my seldom-used vehicle’s plant-based engine harness, causing more than $2,000 in entirely preventable damage. Raccoons, bears, and other large pests have been known to ransack unsecured vehicles, too.
- Noncollision Damage Caused by Objects. This is a broad and fairly ill-defined damage category that can include windshield, paint, and body damage caused by rocks, asphalt chunks, branches, and other nonliving objects. Such damage can occur while the vehicle is in motion — say, a truck kicks up a rock on the highway — or stationary, as in if a dead branch falls on the parked car’s roof.
- Weather-Related Damage. Comprehensive coverage pays for damage associated with a wide range of weather-related perils, including straight-line wind, tornado, hail, and standing water — although not all comprehensive policies cover weather-related water damage. Comprehensive policies may cover tangentially weather-related damage as well, such as a municipal snowplow strafing a parked car with sharp, high-velocity debris.
- Damage Caused by Fire or Explosion (With Possible Exceptions). If a fire spreads to your vehicle or the vehicle is damaged in an explosion, your comprehensive policy is likely to cover the cost of repairing or replacing it. This includes fire or explosion damage that occurs in the course of civil unrest or terrorist attacks. However, such damage that occurs in more extreme — and less likely — scenarios, such as a nuclear attack or conventional airstrike, may not be covered.
- Theft of the Vehicle. Comprehensive coverage typically compensates owners for costs related to the theft of their vehicle.
- Vandalism. Comprehensive coverage also kicks in for human-caused vehicle damage (vandalism), such as scratched paint, dents, slashed tires, broken glass, and the like. This coverage remains valid during periods of civil unrest.
What Comprehensive Coverage Doesn’t Cover
Comprehensive car insurance is not comprehensive in the traditional sense of the term. It doesn’t protect drivers against liability for injury or property damage to others, nor for collision-related injury to their own bodies or vehicles.
More specifically, policyholders should not expect comprehensive coverage to kick in for damage, injury, or liability resulting from:
- Collision With Another Vehicle. Damage resulting from a vehicle-on-vehicle collision is the province of collision coverage, not comprehensive. Medical and liability expenses arising out of vehicle-on-vehicle collisions are covered by liability, bodily injury, personal injury protection, or uninsured/underinsured motorist coverages, depending on the nature of the collision and the other individuals involved.
- Single-Car Crash or Rollover. Damage caused by a single-vehicle crash or rollover is also the province of collision coverage. Common scenarios not covered by comprehensive coverage include running into a ditch, striking a tree or boulder, or hitting a lamppost.
- Certain Types of Noncollision Damage Caused by Negligence or Poor Maintenance. Negligence or inattentiveness may absolve your insurer from its responsibility to compensate you for damage that would normally be recompensed by a comprehensive policy. For example, leaving your car window wide open during a hurricane or your passenger door ajar at a campsite with an open bag of snacks on the seat will probably leave you on the hook for the inevitable damages.
- General Wear and Tear. The concept of “wear and tear” is open to interpretation, but the general rule is that repair work or part replacements that become necessary due to vehicle age and use are not covered by comprehensive insurance. You shouldn’t expect your insurer to cover the cost of replacing the brake pads on a 10-year-old car with 100,000 miles on the odometer, even if you wait until after a heavy thunderstorm to get the work done.
- Damage Due to Your Participation in Criminal Activity. Don’t expect your insurer to cover damage sustained while fleeing police, for example.
- Certain Custom or Aftermarket Equipment. Not all comprehensive policies cover custom or aftermarket car parts, such as spoilers or speakers installed after purchase. Some policies cap coverage on damage to such parts, even if they’re much more valuable than the cap.
To reiterate, comprehensive coverage doesn’t extend to medical or liability expenses incurred as a result of incidents where the comprehensive policy does cover vehicle damage. For example, your comprehensive policy won’t pay for a passenger’s medical bills after a car-on-deer collision, nor the civil damages you might have to pay if they successfully sue you.
Comprehensive Coverage Costs: Factors Affecting Comprehensive Premiums
How much should you expect to pay for comprehensive auto insurance coverage? That depends on the value of the covered vehicle, your comprehensive policy’s deductible, and other important factors.
- Vehicle Value. The greater a vehicle’s value, the more damage it can sustain (in dollar terms) before being considered a total loss. It therefore costs more to add comprehensive coverage to a high-value vehicle’s insurance policy, all else being equal. Collision coverage also costs more on high-value vehicles.
- Vehicle Make and Model. Vehicle make and model — especially the former — bear directly on repair costs. Generally, premium vehicles of all types and mid- to high-end foreign makes cost more to repair than domestic and economy cars — that is, comprehensive coverage on your BMW will probably cost you more than an otherwise identical policy on your neighbor’s Ford, even if the cars are worth about the same.
- Prevalence of Potential Hazards in Your Home ZIP Code. Your home ZIP code’s relative risk is a significant factor in how much you pay for car insurance in general and comprehensive coverage in particular. Areas with frequent damaging weather events and high rates of property crime are more expensive than tranquil, low-crime places.
- Vulnerability to Potential Hazards. Even if you live in a high-risk area, you have some control over your car’s vulnerability to hazards that might trigger comprehensive claims. For example, you can lower your premiums by garaging your car overnight rather than parking it on the street, and by using an anti-theft device.
- Comprehensive Policy Deductible. Raising your policy’s deductible is probably the easiest way to quickly reduce your comprehensive premiums without changing vehicles or purchasing an anti-theft device. Of course, a higher deductible means higher out-of-pocket costs should you need to file a claim.
- Claim History. Unfairly or not, insurers prefer policyholders who don’t file claims. Many give policyholders a mulligan — that is, they don’t raise rates after the first claim in a rolling period, typically five years. But if you’ve filed multiple claims in the recent past, you can bet that you’ll pay more for your coverage.
When It Makes Sense to Add Comprehensive Coverage
So, should you add comprehensive coverage to your auto insurance policy? Is ensuring that you’re not paying out of pocket for major repairs not covered by other car insurance coverages worth the added premium expense? In these common scenarios, the answer may be yes.
- Your Auto Lender or Lessor Requires It. Auto lenders and lessors generally require customers to carry comprehensive coverage as a condition of financing until the loan or lease term ends. Often, this required coverage includes a relatively low maximum deductible — $500 is common. This is a significant added cost of buying or leasing new cars instead of used. And, notably, it’s the only situation in which comprehensive coverage is not optional.
- The Vehicle Is Relatively Valuable. The more valuable your vehicle is, the more sensible it is in purely financial terms to add comprehensive coverage. You wouldn’t want a single telephone pole or tree to crush — literally — a substantial fraction of your total net worth, would you?
- The Vehicle Is High-Risk. By the same token, the utility of comprehensive coverage increases with relative risk. If you overnight-park your late-model car on the street in a high-crime, disaster-prone area, your chances of eventually incurring vehicle damage covered by comprehensive insurance are relatively high.
- You’d Rather Pay Higher Monthly or Annual Premiums Than Face a Major Out-of-Pocket Expense. Ultimately, your cash flow might have the last word here. If you’d rather pay higher monthly or annual premiums to avoid even the possibility of incurring a hefty, surprise out-of-pocket expense, comprehensive coverage makes some sense. Of course, you can also forgo comprehensive coverage and divert the premium difference into your emergency fund, which exists in part to cover such unexpected expenses. But you might not trust yourself to keep your emergency fund topped up, in which case you’re right back to wishing you had comprehensive coverage.
If one of your priorities as a responsible driver is to save as much money as possible on car insurance, adding comprehensive coverage might not seem like a great idea. All else being equal, a policy that includes comprehensive coverage is more expensive than one that doesn’t.
But your auto insurance premium is just one among several recurring costs of car ownership. There’s also fuel, parking, registration taxes and fees, scheduled and routine maintenance, and repairs. As your car ages, this last category is likely to assume an ever-greater share of the pie, and you could come to appreciate the money-saving potential of comprehensive coverage. Your decision to spring for this particular type of optional insurance could prove fortuitous — eventually.