Despite its name, comprehensive insurance doesn't cover everything. In fact it pays for only very specific issues. Comprehensive insurance covers two main types of problems:
1. The value of your car if it's stolen.
2. The replacement cost of the car or repair due to:
- Natural disasters such as a tornado
- Falling objects such as a tree branch
- Crashes with animals
- Civil disturbances such as a riot
What is the difference between comprehensive and collision insurance?
Comprehensive and collision insurance cover two different sets of problems. Both pay for damage to your own car, but for different causes. Collision insurance pays for car dents and other damage if you hit another object, such as a pole or another car.
Comprehensive and collision insurance are typically sold as a package by auto insurance companies.
Other things to know about comprehensive insurance
- You purchase it by adding it to your liability car insurance policy, along with collision coverage.
- If you have a car loan or lease, your lender or leasing company likely requires you to have both comprehensive and collision insurance.
- The maximum payout of comprehensive insurance is the value of your car. For example, if you car is stolen or totaled, the payout is the value of your car at the time of the incident.
What's not covered by comprehensive insurance
It's important to know what you're not getting if you buy comprehensive insurance. Here are some examples of what's not covered, and alternate insurance for the problem.
Not covered: Theft of your personal property from your car. That can be covered by renters or homeowners insurance.
Not covered: Collisions into objects such as a tree or another car. Instead use collision insurance.
Not covered: Damage you cause to someone else's car in a crash. That would fall under your liability car insurance.
Comprehensive insurance cost
For drivers with car loans
If you have a car loan (or lease), you should know about gap insurance. Gap insurance can pay the difference between what comprehensive pays for a stolen or totaled and what you still owe on a loan.
Here's how it works: In some cases, a car loan balance can be higher than what the car is worth when it's totaled or stolen. This could happen if you finance most or all of the vehicle price. Let's say your car is totaled in a flood and comprehensive pays you $12,000 for the value of the vehicle. But say you owe $15,000 on the car loan. Gap insurance covers the $3,000 difference.