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Do You Need Comprehensive Auto Coverage?

There are two main areas of covered physical damage losses in auto insurance: collision damage losses and losses other than collision. These two categories are often referred to as collision coverage and comprehensive coverage.

What is comprehensive coverage?


Comprehensive car insurance is auto insurance that covers loss to the insured's vehicle caused by an object, disaster, or theft. In addition to theft, comprehensive covers fire, falling objects, explosions, or other unexpected non-collision-related disasters.


Comprehensive insurance does not cover bodily injury. Collision reimburses the insured for the full cost of repairs or replacing the vehicle after an accident. Certain insurers won't add comprehensive coverage to your policy unless you also buy collision coverage.


But, you can usually purchase collision insurance without comprehensive. Ask us for details.

Do you need it?


You may have heard that an older vehicle doesn't need comprehensive coverage because it isn't worth as much as before. If you have comprehensive coverage, you could end up paying more for the premium each month than you would get from the insurance company if your vehicle were damaged.


Comprehensive car insurance may be useful for owners of vehicles that are less than five years old. Comprehensive, along with collision, can account for 30% to 40% of your total premium.


Both are also cash value coverages. If your car is damaged beyond repair, you are entitled to recoup the "Kelly Blue Book" value.


As your car ages, the KBB value declines. So, the general rule of thumb is if both your collision and comprehensive are more than 10% of the KBB value of your vehicle, you might want to drop these coverages.


If your car is only worth several thousand dollars, you might also consider dropping these coverages. But if you eliminate collision and comprehensive, in the event of an accident that is your fault or if your vehicle gets totaled or stolen, you will have to pay the repair bill.

Loans and leases require it.


If you lease your vehicle or took out a loan to buy it, the dealership or bank probably required you to purchase comprehensive coverage. They might also mandate the deductible your policy includes. Be sure you understand these requirements when you talk to your insurance agent about coverage for your new vehicle.

Factor in the deductible


If you decide to carry collision and comprehensive (whether your car is five or 15 years old), you should consider choosing the highest deductible you can afford. This will lower your premium considerably. $1,000 is the most popular deductible for this type of coverage.