Rachael Brennan has been working in the insurance industry since 2006 when she began working as a licensed insurance representative for 21st Century Insurance, during which time she earned her Property and Casualty license in all 50 states. After several years she expanded her insurance expertise, earning her license in Health and AD&D insurance as well. She has worked for small health in...

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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Reviewed by Jeffrey Johnson
Insurance Lawyer Jeffrey Johnson

UPDATED: Apr 14, 2022

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In a nutshell...

  • Basic car insurance isn’t designed to pay for damage losses to your vehicle but will pay for damage to other cars
  • All standard insurance carriers offer policyholders the option to purchase optional physical damage coverage
  • The optional physical damage will pay for losses to the covered vehicle in scenarios where coverage applies
  • If your car is damaged in a wildfire or catches fire while it’s being operated, you need comprehensive coverage
  • If you file a comprehensive claim, the deductible that you carry on your policy will be deducted from your claim

Fire can destroy the most expensive car in a matter of seconds. Since components under the hood cause friction that can build up temperatures, car fires are more common than you might think.

A majority of cars that catch fire either on the road or in a driveway will be totaled. The owner is left scrambling to figure out how to pay off the vehicle or replace it.

A basic auto insurance policy provides you with the coverage that you need under state law. In a majority of states, basic insurance includes liability coverage or some form of no-fault coverage, it does not include coverage for your car.

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What is physical damage coverage?

Physical damage coverage is a first-party protection that’s afforded under a full coverage policy.

It includes comprehensive, which covers perils like the following:

  • Fire
  • Theft
  • Vandalism

Full coverage also includes collision, which covers when the vehicle crashes into an object or overturns.

All standard insurers offer physical damage coverage for an added charge.

States have vehicle codes that specifically state how much insurance drivers must maintain in your cars. This code only addresses mandatory coverage. There is no law in any state that says that you must carry coverage for your own car.

The purpose of the law is to protect vehicle occupants and pedestrians if they are injured in a loss, not to for you to protect your own property.

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Is physical damage required on a financed car?

The state may not have a say in whether or not you must buy physical damage coverage but your lender does. When you finance a car, you sign a lot of acknowledgments that are built into the contract.

One of the documents that you sign specifically says that you must carry both comprehensive and collision on the vehicle while you owe money under your loan.

Lenders will ask to see proof of insurance when you first secure your auto loan. They will also ask that you keep your deductibles manageable so that you can afford to cover them when you file a claim.

Some lenders require deductibles as small as $500 under the auto contract terms.

When should you carry physical damage coverage?

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If you’ve already paid your vehicle off, you have the choice to carry comprehensive and collision if you’d like to.

You could even carry strictly comprehensive and leave out the collision. Since both damage coverage options can cost you more than your total basic premium, you have to do a lot of number crunching to make your decision.

Not everyone has the same needs. Some individuals who are driving a fully dependable car don’t have the financial means to replace their cars within the next few years. Others can cover at least some of the cost on their own.

One rule of thumb that you could follow is that you should keep full coverage until the cost of full coverage exceeds 10 percent of the car’s value.

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If you carry physical damage coverage, will it pay for a fire claim?

If you add full coverage to your policy either because you have to or you acknowledge that you have a need for the protection, you will have coverage for most scenarios where your car could catch fire.

The coverage is afforded under the definition of comprehensive, which pays for losses caused by the following perils:

  • Fire
  • Theft
  • Vandalism
  • Falling objects
  • Missiles
  • Hail
  • Flood
  • Contact with live animal

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Is a mechanical fire covered?


Most auto insurance policies have exclusions that say that mechanical breakdown and wear and tear is not covered under your policy. These are very common exclusions that can be found written into any contract.

By the sound of each of these exclusions, you’d imagine that a fire caused by mechanical failure wouldn’t be covered.

While this is a confusing topic, fire is generally an exception to the mechanical failure rule.

If you’re driving your vehicle on the freeway and your engine suddenly is engulfed in flames, your insurance will cover the damage caused by that fire as long as the cause of the fire wasn’t intentional. If you have a warranty, you may have coverage under it.

Will your insurer pay for fire if your car is in storage?

If your car catches fire while it’s sitting in your garage, the fire would have had to start outside of the car. In this instance, your comprehensive coverage will still pay for the fire claim as long as you weren’t the one who set it.

Some home insurance policies will pay for stored vehicles that catch fire on the premises, but the coverage is generally limited to $1000.

How much will your auto insurance pay for fire damage?


There are some limits to how much you will receive when you file a fire claim. If the fire starts under your hood, the vehicle is almost always a total loss.

The only time a car fire doesn’t total a car is when it causes cosmetic damage and the car has a lot of retained value.

Under your contract, the insurance company will protect your car by paying for damages that don’t exceed the car’s Actual Cash Value.

If the repairs that are needed exceed this number, the car is totaled and you’ll receive its fair market value in the form of a check.

Your deductible will be deducted from any final payment that’s made to you.

Auto insurance pays for damage caused by more than just a car accident. With full coverage comes coverage for a vehicle that has been damaged in a fire. Make sure that you choose a reasonable deductible when you’re pricing premiums.

Use our online rate comparison tool to see how much comprehensive costs from different providers and make the choice for yourself.