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comprehensive covers everything

debunking a car insurance myth

It's been more than 400 years since the Bard asked, "What's in a name?" All these years later, Shakespeare's question remains an excellent one — especially if you ask it about comprehensive car insurance coverage.

Here's a rundown of what comprehensive insurance really does and does not cover.

Comprehensive only covers a few specific things

Comprehensive car insurance does provide extremely valuable protections — but towing, rental, and personal property coverages aren't among them. Instead, comprehensive coverage protects your car against damage not resulting from a collision, as well as from theft.

What comprehensive insurance does cover

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Just because it doesn't cover everything outside of collisions doesn't mean comprehensive insurance isn't valuable. In fact, it covers a wide array of events that can damage your car, including rockslides on twisting mountain roads, vandalism, and fires.

Comprehensive insurance can help you pay for your car's repair, or even help you replace it entirely in the case of a total loss, due to any of the following:

  • Damage not resulting from a collision, including:
    • Falling objects
    • Fire
    • Certain natural disasters
    • Vandalism
  • Theft
  • Glass damage
  • Damage from hitting an animal

Who needs comprehensive car insurance coverage?

All drivers are subject to glass damage, so the short answer to the question is, "Almost everybody." Drivers who live where incidents listed above can happen might want to consider comprehensive coverage. For example, if you live in a rural area where deer, cows, or even bears cross the road, you might want to think about comprehensive insurance. According to the Insurance Information Institute, 1.6 million deer-vehicle collisions happen each year, resulting in about 200 fatalities and over $3.6 billion in vehicle damage — and that's just deer-vehicle collisions.

If you live in an urban area prone to car theft and vandalism, you'll probably sleep easier with comprehensive coverage at your side. Though car theft numbers have steadily decreased over the last several years, 794,616 cars were reported stolen in 2009 (the last year for which numbers are currently available).

Drivers living in areas prone to natural disasters, from the sere hills of California to the vast expanse of the Tornado Belt, may also find comprehensive an important coverage to have.

The cost and the coverage

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How much you pay for comprehensive insurance coverage is determined differently than basic coverages like property damage and personal injury liability. With those coverages, the amount of protection you buy dictates the cost. The cost of comprehensive insurance coverage, on the other hand, varies depending on the deductible you select. The higher the deductible, the less you'll spend on your premium — but the more you'll spend out of pocket if you file a claim.

But regardless of your deductible, the amount of coverage comprehensive provides depends on one factor: your car's actual cash value (ACV). (Unless it's a collector car, in which case you'll have the option of establishing an agreed value based on the vehicle's collectability.)

Actual cash value equals the purchase price of your car minus depreciation and your deductible. So comprehensive coverage will pay an amount up to the actual cash value of your car to either repair or (in the case of a total loss) replace it. If the cost of repairs to your damaged vehicle exceeds your car's ACV, your car insurance company will declare it a total loss and pay the sum of the car's ACV to help you replace it — unless you opt to retain salvage (i.e., keep the totaled car), in which case the salvage value will also be deducted from your payout.

The legal lowdown

No states require comprehensive coverage, but those who finance or lease their car will probably find that their lender or lessee requires it. Lenders and lessees are the official owners of the vehicle, so they want to make sure they're adequately protected in case of an incident. For the same reasons, you'll rarely be able to buy comprehensive insurance without also purchasing bodily injury liability and collision coverages.

What it doesn't cover

Despite the name, comprehensive insurance won't help if you hit an object, require towing or roadside assistance, rent a car, or have personal property stolen from within your vehicle since other coverages exist to protect you in such situations.

Thankfully, car insurance companies offer options to cover all these events and more, including:

  • Collision: which covers the cost of repairing or replacing your car if it collides with another car or object, or rolls over (property damage liability covers damage to other cars/objects)
  • Towing and labor (often called roadside assistance): which can help with towing and some on-site services, including:
    • Tire changing
    • Gas, oil, and water delivery
    • Battery services
    • Lockout services
  • Rental reimbursement: which pays for a rental car if you can't drive your insured car due to theft or damage

Personal property is usually covered by homeowners or renters insurance.

Comprehensive car insurance doesn't cover it all

But it does cover a lot. If you have any concerns about hitting an animal, theft, vandalism, or glass damage, consider adding comprehensive coverage to your car insurance policy.

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