What is Comprehensive Auto Insurance?

Comprehensive auto insurance coverage is a type of physical damage protection. This insurance complements collision coverage. It covers the policyholder’s own vehicle and protects against a number of types of losses, including:

  • Falling objects
  • Fire
  • Flying pebbles or stones (windshield or windows)
  • Hail
  • Theft
  • Vandalism

Comprehensive coverage is usually not required under state law. Consumers who take out a loan to finance their vehicle will probably be required to keep this protection in place until it has been paid off. The company providing the financing will want to make sure that its interests are protected until that point.

This type of insurance pays out based on the vehicle’s cash value, instead of the vehicle’s replacement cost or what the owner paid for it originally. In the case of a total loss, the insurer will write a check based on this figure, less the deductible the customer has agreed to pay.

As the vehicle’s value decreases over time, the actual protection the owner gets from comprehensive auto insurance also drops. People who own an older model car which has little cash value may want to consider limiting the comprehensive coverage to fire and theft only.

This choice will help to keep coverage costs down but still provide some protection to the vehicle owner. The savings can be deposited into a savings account to help pay for the driver’s next vehicle.