What Is Comprehensive Coverage For In An Auto Insurance Policy?

By Author: Jerry Pickett
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Comprehensive insurance covers any damage to or loss of your vehicle due to any circumstances other than a collision. It is a standard component of most auto insurance policies issued in the United States, but it is not regulated in any one state in the U.S. - which means you're free to pick the coverage that's right for you. Comprehensive coverage can be taken out as a stand-alone policy or bundled together with collision and liability insurance as part of your auto insurance coverage.

Defining Comprehensive Coverage
Some examples of what comprehensive insurance may cover include: damage to your windscreen as a result of a stone being kicked up; hail, storm, flood or hurricane damage; wind blowing a tree over onto your car; fire damage; vandalism; or theft. Comprehensive coverage usually carries a deductable that is determined based on your personal insurance profile. The deductible is usually moderately lower than the deductible payable for collision insurance. Comprehensive coverage policies are generally combined with collision coverage in one insurance policy.

How Does Comprehensive Coverage Differ From ...
... Other Types of Auto Insurance?
Comprehensive insurance covers the damage to your vehicle even when the cause or culprit of the damage cannot be accurately established. It is similar to collision damage in that it pays for the physical damage to your vehicle. However, the distinct difference between the two types of insurance is that collision insurance relates to damage from a motor vehicle accident or collision, whereas comprehensive insurance basically covers all instances outside of collisions. These damages are often referred to as caused by "acts of God" because they relate to weather and other uncontrollable external factors. Comprehensive coverage is not linked to liability or medical insurance - which are generally required by legislation in most states in the U.S.

When Would You Need to Get Comprehensive Coverage?
As mentioned, comprehensive coverage is not legislated in the States; however, due to the inherent risks in our modern lifestyles, it is highly recommended. If purchasing a vehicle with financing, most banking and finance institutions will insist that your auto insurance policy includes comprehensive coverage. In the event that the car is damaged, the insurance will ensure that the car can be suitably repaired. If the car is irreparably damaged and is written off, at least the outstanding finance payments will be covered by the comprehensive insurance policy.

How are Your Comprehensive Coverage Premiums Determined?
The premiums are evaluated along the lines of a standard risk insurance profile. Factors such as age, the area that you reside and drive in, the average mileage driven on a regular basis, and the value of the car are taken into consideration. If, for example, you are a sales rep and spend the majority of your time on the road then by default, your insurance risk will be higher. If you live in a coastal region where tropical storms frequently occur, then your risk will be higher. If, however, you live in a quiet suburban community, drive less than five miles to work each day, and you car is parked in a secure garage most of the time, your risk profile will be lower. It is also a good idea to compare comprehensive policies offered by different insurance companies. The level of coverage and risk profiles can be different. Ideally, you want a policy that provides you with an adequate level of comprehensive insurance without costing you a fortune in insurance premiums.

When Would Comprehensive Coverage Not Cover You?
The question of insurance payouts tends to be complex as it varies from policy to policy. Each insurance company has their own terms and conditions and it is important to familiarize yourself with the terms of your personal auto insurance policy. As a general rule of thumb though, there are a few instances where a claim on comprehensive insurance would not be accepted. In the instance of vandalism, a comprehensive insurance policy will generally not pay out if the damage was inflicted by the policy owner's employees or family members. The same clause applies to theft of the vehicle or any of the vehicle parts, such as tires. In addition, a policy may not pay out if it is deemed that the damage to the vehicle is as a result of improper maintenance.

When looking into auto insurance, it is always best to shop around. Get comparative quotes from different insurance companies. Know what your greatest risks are and ensure that you vehicle is adequately protected against them. Be careful of going for a cheap policy or one that has a low deductible; in the long run, when you have a claim, the payout limit may not cover the cost of the damage and you will be worse off. Comprehensive coverage is an important part of auto insurance and recommended for all car owners.
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