How does comprehensive car insurance work?

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In a nutshell...
  • Drivers who own any vehicle with value should always consider adding comprehensive insurance
  • Almost every type of car insurance is based on your unique profile so it’s impossible to determine how much comprehensive car insurance will cost
  • Comprehensive car insurance is coverage that provides protection against damage to your vehicle which does not happen as a result of a collision

There are many different types of car but how does comprehensive car insurance work. Does everybody need comprehensive coverage? Is comprehensive auto insurance required by law?

Although comprehensive car insurance is popular it’s not a required coverage by law and some drivers opt not to carry it at all.

However, there are many reasons why you need to consider comprehensive car insurance so don’t just rule it out until you understand the benefits of having this type of coverage.

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What is comprehensive car insurance?

Comprehensive car insurance is coverage that provides protection against damage to your vehicle which does not happen as a result of a collision.

Hailstorms, floods, auto theft, vandalism, even a tree branch falling on the roof of your car are all examples of things that can cause damage/loss to your vehicle without having another car hit it.

If you have comprehensive car insurance, then this damage will often be covered as long as the cost is from an insured event and within your policy limits.

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Do I have to buy comprehensive car insurance?

All states have minimum auto insurance requirements which you must comply with. These state laws however typically only require forms of liability insurance and not comprehensive coverage.

At this time,  there are no states which require you to purchase comprehensive car insurance, but it will depend on your unique situation whether or not you should have it.

You should always consider purchasing auto insurance with higher limits than state minimum requirements you need to find the benefits of comprehensive coverage also.

However, when you are leasing or purchasing a vehicle you almost always be required to buy comprehensive insurance as the finance companies can make up their own rules about how much coverage is needed.

How much comprehensive car insurance do I need?

This will depend on some variables especially the value of your vehicle and if there is any financing attached. You almost always want to purchase coverage with the full replacement value.

This is very important for late model car owners. The book value of a vehicle is often much less than the replacement value, and you don’t want to have coverage only to find out the check is not big enough to buy a replacement vehicle.

If you own a 1971 clunker, then comprehensive car insurance may not be worth paying the extra premium cost when the vehicle is almost ready to be sold for parts anyway.

How much does comprehensive car insurance cost?

Almost every type of car insurance is based on your unique profile so it’s impossible to determine how much comprehensive car insurance will cost without reviewing your profile.

However, the national average for auto insurance premiums based on a typical full coverage policy runs around $1,500 annually, and comprehensive insurance accounts for about 7-15 percent of these premiums.

Drivers who opt for a higher deductible can save a lot on the cost of comprehensive car insurance also.

Even opting for a $500 deductible instead of the standard $250 can drop your premiums by up to 20 percent or more. Overall the cost of comprehensive car insurance is very cheap compared to liability and collision coverage.

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