Complete car insurance: what it covers

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If you drive a car, having the right auto insurance coverage is imperative. You can choose from several types of auto insurance coverage, including comprehensive coverage.

Although they are sometimes incorrectly used interchangeably, comprehensive insurance and collision insurance are two different types of optional coverage. It is important to understand the distinction when buying car insurance.

Here’s what you need to know about property and casualty insurance:

What is multi-risk car insurance?

Property and casualty insurance is a type of optional car insurance coverage designed to protect your own vehicle against damage or loss from events other than car accidents (for example, a tree falling on your windshield). Comprehensive coverage can step in to help cover the cost of repairing or even replacing your vehicle following a covered incident (any event covered by your auto insurance policy).

While most states require liability coverage for drivers, comprehensive auto insurance is generally optional. You can purchase it for an additional fee, but unlike liability coverage, there are no set policy limits to choose from. Instead, your limit is usually the actual cash value of your vehicle.

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What does comprehensive car insurance cover?

Comprehensive auto insurance covers damage to your vehicle from a number of non-collision events. Here are some common reasons for claims covered by comprehensive insurance:

  • Vandalism
  • Flight
  • Natural disasters (such as floods and earthquakes)
  • Fires
  • Damage caused by animals
  • Falling objects (hail, fallen trees, rocks, etc.)
  • Hit an animal
  • riots

Learn more: Comprehensive car insurance: what does it mean?

So if a bear gets into your car at a campsite and destroys the interior while looking for snacks, you’re probably covered. The same is true if a fly ball goes rogue at your child’s Little League game, smashing your windshield.

Good to know: Comprehensive auto insurance can also cover expenses related to repairing your vehicle, such as transportation, towing, or car rental. Check with your insurer to find out if it covers substitution transportation.

What does comprehensive insurance exclude?

Your comprehensive insurance does not cover everything. Here are some events that your coverage typically excludes:

  • Accidents with another vehicle or object: If you collide with something, like another vehicle, a mailbox, or even a telephone pole, your comprehensive coverage won’t cover the damage. Instead, you’ll need to file a claim against your own collision coverage (if you have it) or the other driver’s insurance if they’re at-fault in the accident.
  • Normal wear: Comprehensive coverage will not cover damage resulting from normal wear and tear, such as worn tires.
  • Damage to property of others: Full coverage does not pay for damage to others, whether you hit another car, a pedestrian, or even someone else’s personal property. Instead, their bodily injury and/or property damage expenses will usually be covered by your liability insurance, assuming you are at fault.

Point: If you’re wondering if your all-risk insurance covers a specific situation, it’s best to contact your insurance company.

How does full coverage work?

If you have damage that is eligible for full coverage reimbursement, you will need to file a claim against your own insurance policy. The steps in this process vary by insurer, but typically you will do the following:

  1. Document the damage. Take photos of the damage to your vehicle and take any notes that may be helpful to your insurance company. You may need it for your application.
  2. Contact your insurance company to file a claim. You can call your auto insurance provider to start the claims process, or you can do so with your insurer’s mobile app, if they have one. You will probably have to make a statement explaining what happened. Your insurance agent can guide you through the claims process.
  3. Get repair quotes. Your insurer may ask you to take your vehicle to a body shop for a repair estimate. After the store submits the estimate to your insurance company, your insurer will review it and determine how much to pay for the repairs.
  4. Pay your deductible. If your insurance company approves your claim, you will need to pay your deductible – the part of the repair cost that you must pay before your insurance takes effect. Either you pay this amount directly to the repair shop, or your insurer subtracts your deductible amount from your payment. The typical full coverage deductible ranges from $50 to $1,000 per incident.

Check: What is a diminished value claim?

How much does full coverage cost?

The average cost of comprehensive car insurance coverage in the United States was $171.87 in 2019, according to data from the National Association of Insurance Commissioners.

You typically purchase comprehensive coverage as an add-on to an auto insurance policy, rather than as a standalone product. Your comprehensive insurance premium depends on many factors. The price of comprehensive car insurance can vary depending on your:

  • Location
  • Age
  • Genre
  • Driving record
  • Age and type of vehicle
  • Deductible (a higher deductible usually means a lower premium)
  • insurance company

Keep in mind: Your insurance provider may offer discounts for certain memberships or memberships, or offer lower prices if you bundle multiple types of insurance. Be sure to ask your insurer for discounts.

Comprehensive Insurance vs. Collision Coverage

Comprehensive Insurance and Collision Damage Waiver are optional coverages designed to protect your own vehicle. This differs from liability coverage, which is designed to protect you financially if you damage another driver’s vehicle or cause bodily injury in an accident.

Although comprehensive coverage and collision coverage are often confused, an easy way to keep the two straight is to remember that collision coverage is for, well, collisions that happen while you’re driving. Full coverage, on the other hand, is for almost everything else.

Here is an overview of the different events covered by comprehensive and collision insurance:

Full coverage Collision coverage
Collision with another vehicle Nope Yes
Hit a mailbox, retaining wall, or light post Nope Yes
Hit an animal Yes Nope
Broken windshield due to a rock or hail Yes Nope
Broken windshield following an accident Nope Yes
Someone else’s personal wounds Nope Nope
Damage to vehicle or personal property of others Nope Nope

When to take out all-risk insurance?

Unlike state-mandated liability coverage, purchasing comprehensive auto insurance is generally optional. However, you might want to consider adding it, especially in these scenarios:

  • If you finance your vehicle, your lender may require you to purchase comprehensive coverage until you pay off the car loan.
  • If you are unable to pay for the cost of repairing your vehicle out of pocket, comprehensive coverage can save you from footing the bill yourself.
  • If you have an expensive new vehicle, you’ll probably want to protect it against theft, vandalism, and other damage.
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Disclaimer: All insurance related services are provided by Young Alfred.

About the Author

Stephanie Colestock

Stephanie Colestock is a Washington, DC-based writer with over 11 years of experience writing about investing, business, and personal finance. She has contributed to outlets such as Yahoo! Finance, MSN, Investopedia, Credit Karma, Credible, etc.

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