Comprehensive Insurance: When To Carry It

Comprehensive insurance is an optional coverage that assists with payments to repair or replace your vehicle in incidents of theft or non-collision damage. It is not required by state law, but if you lease or finance your vehicle, your lender will likely require it. Comprehensive insurance covers damage to your car caused by a variety of accidents that aren't traffic-related, including weather events, falling objects, car theft, vandalism, and civil disobedience. It does not cover damage or injuries caused to others while driving, your own injuries after an accident, damage to your car from a collision with another driver or object, personal belongings inside your car, damage from potholes, or normal wear and tear. The cost of comprehensive insurance varies depending on factors such as the age and value of your car, your location, and theft rates in your area.

When is comprehensive insurance required?

Comprehensive insurance is required in certain situations, although it is not mandated by law in any state. If you are leasing or financing your vehicle, your lender will likely require you to have comprehensive coverage until the vehicle is paid off. This is to protect their interest in the vehicle. In this case, comprehensive insurance is usually bundled with collision coverage.

Comprehensive insurance is also required if you want protection against damage to your vehicle caused by events outside of your control, such as theft, vandalism, fire, natural disasters, civil disturbances, or collisions with animals. It covers the cost of repairs or replacement of your vehicle in these situations.

If you own your vehicle outright, comprehensive insurance is typically optional. However, it is still recommended, especially if you live in an area prone to natural disasters or other covered events. Ultimately, the decision to opt for comprehensive insurance depends on factors such as the value of your car, your financial circumstances, and your personal preferences.

When is it not required?

Comprehensive insurance is not a legal requirement, and if you own your vehicle outright, it is your choice whether to take out this type of cover.

Comprehensive insurance is only compulsory if you are leasing or financing your vehicle. In this case, it is the lender that requires it, not the state. If you own your vehicle, it is your choice whether to take out comprehensive insurance.

Comprehensive insurance is designed to cover damage to your vehicle from non-collision incidents. This includes damage from fires, vandalism, theft, and weather events. If you can afford to repair or replace your vehicle out of pocket, then comprehensive insurance may not be necessary. Similarly, if your vehicle is older and has already lost a lot of its value, comprehensive insurance may not be worth the cost.

If you are unsure whether to take out comprehensive insurance, consider the value of your car, your financial circumstances, and your personal preference.

What does comprehensive insurance cover?

Comprehensive insurance is defined as an optional coverage that protects against damage to your vehicle caused by non-collision events outside of your control. It is often referred to as "comprehensive insurance," but it is not a separate type of insurance. Instead, it refers to a specific coverage within an existing policy.

Comprehensive insurance covers damage to your vehicle caused by a range of non-collision incidents, including:

• Theft
• Vandalism
• Glass and windshield damage
• Fire, explosions, and smoke damage
• Accidents with animals
• Weather events, such as storms, hail, wind, floods, lightning, and natural disasters
• Falling objects, such as trees, limbs, or rocks kicked up by cars
• Civil disturbances, such as riots

Comprehensive insurance does not cover damage to your vehicle resulting from a collision with another vehicle or object. It also does not cover normal wear and tear, medical expenses, or damage to personal belongings inside your car.

The cost of comprehensive insurance varies and depends on factors such as the value of your vehicle, your deductible, and the likelihood of covered events occurring in your area. While it is not legally required, lenders typically require comprehensive insurance if you are leasing or financing your vehicle. For older vehicles, comprehensive insurance may not be worth the cost if the value of the car is low and the potential insurance payout is minimal.

What does it not cover?

Comprehensive insurance is an optional coverage that protects against damage to your vehicle caused by non-collision events outside of your control. It does not cover:

• Damage to another person's vehicle from a collision
• Your or your passengers' medical expenses after an accident
• Damage to your car from a collision with another vehicle or object
• Normal wear and tear on your vehicle
• Damage from potholes
• Personal belongings inside your car

Comprehensive insurance is typically more affordable than collision coverage, but it may not be worth carrying if your vehicle holds a low value. If your vehicle is worth only a few thousand dollars, the potential insurance payout may not be worth the price of the coverage. It's important to weigh the potential insurance payout against your deductible and the value of your vehicle to determine if comprehensive insurance is worth it for you.

Is comprehensive insurance worth it?

Whether or not comprehensive insurance is worth it depends on several factors.

Comprehensive insurance is not required by state law, but if you lease or finance your vehicle, your lender may require that you purchase a comprehensive policy until the end of your lease or until your vehicle is paid off.

Comprehensive insurance covers damage to your car from non-collision events, like storms, vandalism, or even hitting a deer. It also covers theft, fire, and flooding. Comprehensive insurance is usually bundled with collision insurance, which covers damage to your car after a crash.

If you don't have comprehensive insurance, you'll need to pay out of pocket for any damage or loss that isn't caused by a collision.

When deciding whether or not to get comprehensive insurance, consider the following:

• The value of your vehicle. If your car isn't worth much, comprehensive insurance may not be worth the cost.
• How you're paying for your vehicle. If you're leasing or financing your car, comprehensive insurance is probably required.
• Your financial situation. If you don't have cash for repairs, comprehensive insurance could be a good idea.
• The age of your car. Older cars are less likely to need comprehensive insurance, as the rule used to be to drop it after six years or 100,000 miles. However, modern cars last longer and cost more to repair, so this may not always be the case.
• The frequency of extreme weather, car theft, and vandalism in your area. If these are common, comprehensive insurance may be a good idea.
• The cost of comprehensive insurance in your area.
• The amount of savings you have available to pay for a replacement vehicle after a crash.

Ultimately, the decision to get comprehensive insurance depends on your individual circumstances and how much risk you're comfortable with.

Frequently asked questions