Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products, including home, life, auto, and commercial, and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, mainly in the insuranc...

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UPDATED: Oct 15, 2021

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Here's what you need to know...

  • Basic auto insurance policies are policies that include only liability coverage and other coverage options that are required by the state
  • Comprehensive coverage is one of the two common types of physical damage that are available to policyholders with eligible vehicles
  • Comprehensive is first-party coverage that pays for your vehicle repair costs or to replace your vehicle when it’s totaled
  • Comprehensive is called “Other Than Collision” because it pays for losses like fire, theft, vandalism, flood, falling objects, wind, hail, and damages caused by a live animal
  • When you file a claim, the damages must exceed your deductible before the insurer pays. The deductible is then deducted from your check

Auto insurance policies offer the public consumer protection and the policyholder their own asset protection. While state requirements are minimal, the coverage limits that you must carry are generally high enough to help you pay for the third-party damages that could be incurred in a minor accident. But, unfortunately, carrying what’s required by the state doesn’t protect your car.

If you want protection for your own property, you must buy physical damage coverage for an added premium. One type of physical damage coverage that’s available for most vehicles is comprehensive. Comprehensive pays for your own cars and not others. Here’s what you need to know when you’re shopping for coverage.

Start shopping right now. Enter your zip code in our FREE comparison tool to get started!

What does auto liability insurance cover?

Auto liability insurance is a third-party coverage that pays for damages that are incurred by others. You must be declared the not-at-fault driver in a loss in most states before your Bodily Injury and Property Damage coverage will pay for medical bills and repair bills.

Most states only have legislation that requires a driver to purchase and maintain liability coverage.

While a few states require Uninsured/Underinsured Motorist Coverage or Personal Injury Protection, which both pay first-party benefits, no state in the U.S. will require a vehicle owner to purchase insurance protection for that vehicle.

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What is physical damage coverage?

Physical damage coverage is defined as auto insurance coverage that insures a covered auto on the policy against damage. Under this category, there are two different types of coverage that you can carry. These include comprehensive and collision coverage, which each covers different kinds of perils.

What kind of perils does comprehensive coverage protect against?

Comprehensive goes by several different names. You might hear it being called things like comp, “Other Than Collision” (OTC), parked car insurance, or storage insurance. Regardless of what it’s called, comprehensive always covers against the same types of physical damage losses.

In a broad sense, comprehensive coverage will pay for damages caused by incidents other than a car accident. While it’s not required by law, it might be required by your lender or lessor if the vehicle is being financed or leased. Here’s a full list of the perils that are covered under the standard auto insurance policy:

  • Fire or explosion
  • Theft or vandalism
  • Falling objects
  • Missiles
  • Flood
  • Wind
  • Hail and other weather-related perils
  • Damage caused by a live animal
  • Glass breakage

Comprehensive coverage is separate from collision. It covers different types of losses that are usually not a result of operating a vehicle. Moreover, if you’re leasing or financing a vehicle, your lender might ask you to have both coverages until the loan is paid off. 

How does comprehensive differ from collision insurance?

If you’re confused by terms like comprehensive and collision coverage  being used separately, it’s crucial to understand how these coverages differ. While they are both physical damage coverage options that cover your car and are required by lenders, they protect you in very different situations.

Collision is a first-party benefit that’s usually used when you’re at fault in an accident. It only pays when your vehicle collides with another car or some other type of real property. In some events, collision will pay when the other party doesn’t have insurance or the other insurer is delaying the claim. Here are the critical differences between comprehensive and collision:

  • Collision insurance typically has higher premiums and will require a higher deductible than comprehensive car insurance
  • You must purchase comprehensive car insurance to carry collision
  • You can buy a comprehensive-only policy on a stored car or a basic policy that includes comprehensive insurance without buying collision
  • Your driving record and claims record have a more significant impact on your collision premiums than your comprehensive insurance premiums
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What is a comprehensive deductible?

When you file a claim for damages after a peril listed under comprehensive insurance, you must satisfy your deductible. A deductible is the portion of the damages that you’re required to pay when you’re filing any type of damage claim for your own car. It’s a lot like the deductible on a health insurance plan.

Your insurance company will offer you a deductible in set increments ($500, $1000, $1,500). Selecting a higher deductible means that your premiums will be lower, which can save you money. On the other hand, choosing a lower deductible means that the amount you pay for coverage will increase. Discuss with your agent about what deductible and limits fit your needs. 

If you suffer minimal damage or have a high deductible, you don’t need to file a claim because the insurer won’t pay.

It’s so important to know the role of your deductible before you choose it. If you have a claim that exceeds your deductible, the amount will be deducted from your check. You can pay the repair shop directly or the insurer.

Will a comprehensive deductible ever be waived?

You almost always have to pay a deductible when you’re filing a claim. However, for a comprehensive claim, there are a few unique circumstances where your deductible might be waived.

When you file a claim for a cracked windshield, the windshield can be repaired rather than replaced. Check with your insurer to see how they handle this type of claim.

Is there a limit to how much my auto insurance company will pay?

If you look on your declarations page, you will see that your policy will pay up to your vehicle’s Actual Cash Value for any comprehensive insurance claim. While there’s not a stated limit, there’s still a very strict limit that all claims adjusters stick to when processing a claim.

Actual Cash Values can vary based on your car’s condition, age, model, trim level, mileage, and other details. Since the value can change, the insurer doesn’t put a stated limit on your declarations page.

Instead, the insurer will calculate the value of the car at the time of the loss. This value can be negotiable if you aren’t happy with it.

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What happens if my damages cost more than my car’s value?

If you file a claim and it turns out that it costs more to repair your car than it’s worth, the claim will go from a repair claim to a total loss claim. The company will only pay up to your car’s ACV minus your deductible when settling the claim. You do have the option to keep the car, but its salvage value will be deducted from your payment.

You should look at comprehensive auto insurance coverage if you can’t afford to replace your car on your own. The premiums for comprehensive coverage are affordable.

Use an online rate comparison tool so that you can see how much premiums cost from carrier to carrier. Enter your ZIP code in our free comparison tool to get started!