What does comprehensive car insurance cover?

by prashantjain » Mon Nov 17, 2008 08:37 pm

Comprehensive insurance provides coverage for damages caused by something other than a collision. This coverage protects your vehicles in a wider range of situation like fire, explosion, storm, earthquake and the like. Your collision coverage does not cover a lot of perils. Comprehensive coverage will come in to play when you need coverage for your car in case the damage is not from a collision.

You may find comprehensive auto insurance coverage combined with collision coverage. However, you can purchase comprehensive separately too.

Why do you need comprehensive coverage?

Auto repairing can be expensive if you haven't saved enough already. The out-of-pocket charges can be really high. Even small or minor damages can be taxing on the pocket. Having comprehensive coverage helps in times like this. E.g. your car's air bag or the music system could be stolen after an accident. This means an additional charge to purchase those. If you did not have comprehensive coverage, you would have to pay not just for the stolen materials but also the repairing cost of your car. However, with comprehensive coverage you can fill in the gap and just pay to purchase the stolen material and your insurance can pay that cost for repairing your car.

Who needs comprehensive coverage?

If you live in an area that experiences frequent weather events or crime, you will need comprehensive insurance coverage. If you live in an area where hail storm is a problem, you must have comprehensive insurance protection. This coverage is also important for those of you who drive long ways on major highways where there is the hazard of your windshield being chipped or cracked by the rocks.

However, if your car is over 10 years, you could drop comprehensive coverage. The cost to repair a car that is 10 years or more than 10 years old may surpass the ACV; hence, it is a good idea not to purchase comprehensive coverage for it.

Is there a deductible?

Yes there is. You may choose the deductible that you will be comfortable paying. The more deductibles you choose the lesser will be your premiums. However, remember that a deductible is the amount that you will have to pay out-of-pocket when your car needs repairing from damage. So choose a comfortable deductible. Again there may be limits to a comprehensive coverage. Check them out before buying a policy.

What does comprehensive insurance not cover?

Comprehensive insurance does not cover gadgets or electronic equipments like stereo, subwoofer systems, CDs, tape decks, radios, television monitors, video cassette recorders, audio cassettes and the like. Among non-electronic equipments there are luxury items like trailers, awnings, cabanas, radar detectors and other facilities installed are also not covered. There are few other instances under which comprehensive coverage is not provided:
  • Your car/vehicle is seized by the government or civil authorities due to any involvement in criminal/illegal activities.
  • Radar detectors are not covered.
  • Custom furnishings like special carpets, furniture, sleeping facilities, cooking facilities, height extending roofs and other things like murals, graphics or paintings re not covered.

How to find comprehensive auto insurance quotes?

You may shop around for quotes these are also available online. Hence, you can look for a deal that would suit your need and while shopping for quotes you can also make a comparative study and find out what is covered and what is not. You may even do a complete pricing after adding liability coverage, collision insurance, underinsured/uninsured coverage and the like and then see which deal would be the best for you.

Related Readings:

Does Collision/Comprehensive coverage have any defined limit? I have insurance (COMP/COL) on my 10 year old car worth $3000 and want to rent a new car worth $20000, how much claim will be paid in case of damage to rental car? I talked to my insurance company they said COMP/COL do not have limit and it will be covered. But I am still not sure how damages of up to $20000 will be covered when my policy premium was calculated based on my old car?

Total Comments: 20

Posted: Mon Nov 17, 2008 08:59 pm Post Subject: what does comprehensive car insurance cover

The limit is actual cash value, market value. That is, if the cost to repair is more then the value, they will consider it a total loss and pay the value less the deductible.

You want to make sure that coll/comp transfers over to the rental under the situation it's being rented for. I've seen some policies only provide coverage when the rental is obtain as a replacement vehicle while yours is being repaired... not for a rental just to go on vacation and the like.

They are correct... for all intensive purposes the ACV limit applied to a rental being a total loss is a moot point as you are only liable for up to the value of the vehicle. But the rental company may try to stick you with loss of use and there are also some policies that don't provide coverage for this unless you have rental coverage on your own policy. But most rental companies will not pursue a loss of use claim if the insurance is going to pay for the damage/value of the vehicle itself.

Posted: Mon Nov 17, 2008 10:03 pm Post Subject:

Thanks for your response

Limit of liability section under my policy contract says:
Payments for loss to a covered auto, non-owned auto, or custom parts or equipment are subject to the following provisions:
a. If coverage applies to a non-owned auto, we will provide the broadest coverage applicable to any covered auto shown on the declarations page.

My auto insurance policy declaration page shows Actual Cash Value as limit for my auto. That means insurance company will always pay for damages not exceeding ACV of my auto irrespective of ACV of rental auto.
Do you think it's a better idea to go for Loss Damage Waiver (LDW) coverage offered by Rental Company when you have insurance on an old auto?

Posted: Mon Nov 17, 2008 10:28 pm Post Subject:

No, your policy will address the ACV of the rental vehicle, not your own.

The limits of your policy is ACV. That coverage applies to the rental, so it's the ACV of the rental.

Posted: Tue Nov 18, 2008 12:34 am Post Subject:

You're fine OP take a breath, and be happy about it...all (excepted stated amount policys which yours is not) collision and comp coverage is ACV...if you want to buy the damage waiver buy it, but it's really a waste of money and usually only covers your deductible anyway (read the fine print)....whatever your policy has on it will transfer to the rental car, limits, deductibles coverages etc.

Posted: Tue Nov 18, 2008 08:53 am Post Subject: what does comprehensive car insurance cover

Normally, when you have a lien on a car you may buy collision & comprehensive coverage upto the volume of the loan, so that, you receive maximum compensation for the damaged vehicle and can pay-off the loan. However, while receiving the benefit it may only be the actual cash value of the car, which declines fast with time.

When the policy is extending its coverage to the rented vehicle it'll cover it for its actual cash value and not the value of the old car on the policy. Hence, you might not need to worry that the ACV of the old car will apply to the rented vehicle & you may not receive sufficient compensation for it.

Posted: Tue Nov 18, 2008 11:44 am Post Subject:

you may buy collision & comprehensive coverage upto the volume of the loan

NO simon this is incorrect!!!

so that, you receive maximum compensation for the damaged vehicle and can pay-off the loan.

Still wrong...in no way does coll/comp coverage have ANYTHING to do with the lein or loan pay off EVER!

However, while receiving the benefit it may only be the actual cash value of the car, which declines fast with time.

Not ''may'' ALWAYS the ACV...

Simon this is a common misconception, and what GAP ins. is for...no company will value a vehicle for the loan pay off..it's the acv only...if a vehicles acv is 2k and their loan is 40k they get 2k period...if the acv is 40k and loan is 2k the bank gets 2k the insured gets 38k...ACV (or comp and collision) have nothing at all to do with the loan amount NOTHING.

Posted: Tue Nov 18, 2008 03:51 pm Post Subject:

I was confused on this because my policy contract no where say that col/comp will be transferred but instead it says “If coverage applies to a non-owned auto, we will provide the broadest coverage applicable to any covered auto shown on the declarations page” and declaration page show my old car as covered auto with ACV limit.

Thanks everyone for your help on this.

Posted: Tue Nov 18, 2008 11:43 pm Post Subject:

The actual cash value will be stated in any policy. The agent is correct in saying you will be covered and ok if an accident occurred. Trust me, rental agencies wouldn't allow drivers to leave the lot without enough coverage for their vehicles. This would be too much of a risk for them and increase coverage rates as well.

Posted: Wed Nov 19, 2008 04:57 am Post Subject:

Oh! Lori thanks for clarifying my misconception. However, just need your advice…supposedly, I've purchased a brand new vehicle worth of 20k with a lien on it, what would be the amount of collision coverage that I need to carry on it & also the amount of Gap insurance that I may require to avoid being in an upside down condition.

Posted: Fri Nov 21, 2008 12:22 pm Post Subject: insurance

When I was in my car accident, last year, the damages, for my vehicle, came to $2100.00. I had a deductable of $500.00. According to the Blue Book (?), if I did more than $2600.00 worth of damages, my car would be 'totaled'. I have my 'Full Coverage', through my loan, for my car (Citifinancial). However, I din't have a 'rent-a-car' policy within the loan....Citifinancial just din't have one. I have an older vehicle..a 99 Jeep Cherokee. Have a question........how do banks/finance companies determine the 'value' of cars? I know what the Blue Book says, but, I'm just wondering how THIS money amount is determined.

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