What is comprehensive auto insurance? | Car insurance

Comprehensive auto insurance refers to a combination of coverages that can provide financial protection if you are involved in an accident or if your vehicle is damaged in other circumstances, such as vandalism or extreme weather conditions.

Although not required by law, this coverage package may be required in certain circumstances. It can also help you avoid paying out of pocket for common car insurance claims, but it’s not for everyone. Understanding what is covered by a comprehensive insurance policy can help you determine if it’s worth considering.

Full-coverage car insurance policies can vary both in structure and availability, but generally policies include:

  • Liability insurance: Automobile liability insurance provides financial protection if you are at fault in an accident. A liability insurance policy typically includes bodily injury liability coverage and property damage liability coverage.
  • Collision insurance: Collision insurance will pay for damage to your car caused by a collision with another object, such as a vehicle, tree or retaining wall.
  • Back to back insurance: Comprehensive coverage covers damage to the vehicle resulting from incidents other than a collision. This includes falling objects, fires and vandalism. It will also pay if your car is stolen.

In addition to liability, collision, and comprehensive coverage, comprehensive coverage may also include other types of coverage, especially if required by state law. As such, a comprehensive coverage policy in your state may include:

  • Uninsured/Underinsured Motorist Coverage (UM/UIM): If the other driver is at fault but does not have insurance or sufficient insurance to cover your loss, uninsured/underinsured motorist coverage will reimburse you for bodily injury expenses and possibly property damage expenses, depending on where you live. It also provides coverage if you are the victim of a hit and run.
  • Personal Injury Protection (PIP): This pays for medical expenses for you and your passengers for injuries sustained in a car accident. PIP could also pay for lost wages, expenses for services you can’t do while you’re injured (like housekeeping), and funeral expenses.
  • Medical payments (MedPay): This pays for medical expenses for you and your passengers in the event of injury in a car accident. Although MedPay covers related expenses, such as an ambulance ride, it does not cover other expenses like PIP does.

Third Party Liability vs Full Insurance

Liability insurance refers to a single policy that provides coverage if you are responsible for an accident resulting in bodily injury or damage to another driver, their vehicle or their passengers. expenses – medical bills, car repairs, etc. – but not yours. This is where full coverage can help.

Comprehensive Coverage refers to a set of coverages that includes liability insurance as well as additional forms of coverage, such as Collision Damage Waiver, Comprehensive Waiver, MedPay, and Bodily Injury Protection.

In most states, drivers must carry a liability insurance policy that meets the state’s minimum coverage requirements. No law requires drivers to purchase comprehensive coverage, but lenders often require it as part of a loan agreement. The same can be true for drivers who rent a vehicle.

Before shopping around and checking car insurance quotes, it’s important to know if you’re required to have comprehensive coverage and, if so, how much coverage you need. You can find information on state requirements, including liability requirements for bodily injury and property damage, through the Department of Motor Vehicles (DMV). Contact your lender or lessor to find out what insurance requirements are included in your agreement.

If you have financed your vehicle and still have a balance on your car loan, you may need a comprehensive insurance policy. You may also need a comprehensive insurance policy if you rent your car. This is because your lender or lessor technically owns your car until you pay off your loan or your lease ends. As such, they have a financial interest in your vehicle, and a full coverage policy ensures that they will be paid if the car is damaged before a loan is paid off or if you return the car at the end of your lease. .

If you’re making a monthly payment on your car, read the contract carefully to see if you’re required to have full coverage, and if so, how much you need.

Beyond that, full auto insurance is optional. If being at fault in a car accident would absolutely destroy your family’s finances, comprehensive coverage is worth discussing with your insurance company. However, if you have good liability coverage and your car is old, paid for, and not worth much, you can probably give up collision and comprehensive coverage because the extra cost of your insurance can, over time, outweigh the cost of repairs or replacement.

Is full coverage worth it?

A comprehensive car insurance policy should ensure that you have enough insurance to protect all of your assets in the event of an accident, collision or major incident. Of course, regardless of the financial decision, there are pros and cons to comprehensive insurance.

Advantages:

  • Can help you meet state, lender or lessor requirements

  • Can protect you if you are involved in an accident and the driver at fault is not covered

  • May cover non-accident damage such as vandalism and theft

  • Can cover your medical expenses if you are injured in an accident

The inconvenients:

  • Is more expensive than basic liability coverage

  • Will not cover normal wear and tear on your vehicle

  • Does not provide coverage if you use your car for commercial work

Full coverage and deductibles

When buying a comprehensive auto insurance policy, you need to select deductibles and limits. A deductible refers to the amount of money you pay out of pocket before your insurer covers the remaining expenses. How and when your deductible kicks in depends on the type of claim you make.

Automobile liability insurance does not include a deductible. If you are found legally responsible for an accident, your insurer will cover the costs up to your limit of liability. For example, if an accident caused $15,000 in property damage and your limit is $25,000, your insurer will cover the cost. If, however, the total damage cost was $27,000, your insurer will cover up to your policy limit and you will have to pay the remaining $2,000 out of pocket.

Comprehensive Coverage and Collision Coverage both have deductibles. This means that if your claim is covered by either of these policies, you will have to pay your deductible before your insurer pays the remaining expenses. For example, if you have a deductible of $500 and a tree falls on your car and causes $4,000 in damage, you will pay $500 and your insurer will pay $3,500.

Is comprehensive auto insurance really comprehensive coverage?

Although full coverage is a common term, it is misleading. A comprehensive car insurance policy does not actually cover every type of collision, accident, or incident, nor can you purchase a comprehensive insurance policy. Full-coverage auto insurance is a package that includes the three basic types of auto insurance coverage that gives you protection above the minimum coverage required by your state.

What does comprehensive auto insurance include?

Comprehensive auto insurance includes a combination of liability, collision, and comprehensive policies, which provide enough coverage to protect you in most scenarios that may arise with your vehicle.

If you are planning to purchase or have already purchased full coverage, it is important to read your insurance contract. It will include details of what is not covered by a full coverage policy. You can also speak to your insurance agent to discuss coverage exclusions.

Do I need comprehensive car insurance?

If your lender (the bank or institution that handles a vehicle loan or lease) requires full coverage, then you need full coverage. Otherwise, whether or not you need full coverage depends on your family’s financial situation and your tolerance for risk, i.e. whether it’s worth paying car insurance rates for you. higher in exchange for greater protection in the event of an accident.

How can I get a comprehensive car insurance policy?

It’s easy to purchase a comprehensive auto insurance policy. Most auto insurance companies sell a comprehensive insurance policy or a combination of coverages that provide what we call comprehensive coverage.

How much does comprehensive car insurance cost?

The cost of a comprehensive car insurance policy varies depending on several factors. To determine your rate, an insurer will look at your age, location, driving record, and credit history, among other things. Your rate will also depend on the limits and deductibles you choose.

Compare auto insurance quotes

Get free personalized quotes with a simple form.

Powered by

Best car insurance companies of 2022

Learn more

For more information on car insurance, see the following guides:

360 Associate Reviews

For more information on other types of insurance, see the following guides:

At US News & World Report, we rank the best hospitals, the best colleges, and the best cars to guide readers through some of life’s most complicated decisions. Our 360 Reviews team uses this same unbiased approach to review insurance companies and agencies. The team does not keep samples, gifts, or loans of products or services we review. Additionally, we maintain a separate sales team that has no influence over our methodology or recommendations.

US News 360 Reviews takes an unbiased approach to our recommendations. When you use our links to purchase products, we may earn a commission but this does not affect our editorial independence.