Comprehensive insurance sounds as if it covers everything, but it actually applies only under limited circumstances. While you're legally obliged (in most states) to have liability and property damage coverage, comprehensive insurance is optional. A quick risk assessment helps you work out whether you need it.
Comprehensive insurance covers damage to your car as a result of theft, vandalism, fire, natural disasters like hurricanes or tornadoes, falling objects, animals and civil disturbances.
What Comprehensive Insurance Covers
Comprehensive insurance is a coverage that helps you replace or repair your vehicle if it's stolen or damaged in an incident that's not a collision – for example, theft, vandalism, fire or a natural disaster such as a hurricane or tornado. It also covers damage caused by an animal, a falling object, a civil disturbance and broken glass.
When Should You Drop Full Coverage on Your Car?
Comprehensive insurance isn't right for everyone. Evaluate your risk for a comprehensive claim. If you live in the country surrounded by deer, your risk of hitting one with your car is higher than if you live in the city. If you live next to a golf course, your risk of damage from falling objects is higher than if you live in an apartment. If you park in a garage every night, your risk of storm damage is lower than if you park your car under trees in your yard. The higher your risk is for a comprehensive claim, the more important it is for you to have this coverage.
You may not want comprehensive and collision insurance if you have an older car because the cost of repairing the car may be higher than the value of the car. In this case, an insurer will "total" the car and pay the actual cash value of the car, less the deductible, instead of repairing it.
"Full coverage" doesn't actually exist as a car insurance option, but if you have comprehensive insurance and collision insurance, you are covered for everything. Collision insurance covers damage to your car from a collision, damage to another person's vehicle from a collision, and your (or your passengers') medical expenses after an accident, which is not covered by comprehensive insurance. Generally, collision insurance is more expensive than comprehensive insurance.
Is Comprehensive Insurance Required by Law?
If you own your vehicle outright, comprehensive insurance is optional. Car insurance laws vary by state. State laws do not require physical damage coverage on vehicles, but almost all states require liability and property damage coverage.
If you're leasing or financing your vehicle, comprehensive and collision coverage may be required until the vehicle is paid off.
Other optional auto insurance coverages include rental reimbursement coverage, towing and labor coverage and medical payments coverage.