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What Is Comprehensive Car Insurance?

April 7, 2021
4 mins
A young couple review their finances with paperwork and a laptop

The name may be misleading, but comprehensive car insurance does not cover your vehicle for everything that can happen to it.

Frequently referred to as “other than collision” coverage, comprehensive coverage is an optional type of protection you can choose to add to a basic or standard car insurance policy if you own your vehicle. Essentially, it provides coverage for non-collision related damages. If you’re financing or leasing a vehicle, your lender may require you to have comprehensive coverage as part of your overall policy.

The average cost of adding comprehensive coverage to a policy is usually a couple hundred dollars per year. However, the cost will depend on the coverage limit as well as your vehicle’s value and age. It’s worthwhile to talk to your broker or provider about adding comprehensive to your policy to see if it makes sense for you. Typically, it is a cost-effective way to pay for repairs to your vehicle or to replace it for a variety of mishaps, including:

  • Natural disasters such as a flood, hail, lightning, earthquake, hurricane or other severe storms.
  • A not-at-fault collision with an animal that unexpectedly darts out in front of your car or damage done to your vehicle by a rodent.
  • Theft of your vehicle or a part of the vehicle, for example, if the stereo system in your dashboard is stolen.
  • Vandalism or a civil disturbance such as a riot.
  • Fire or explosions.
  • Glass and windshield damage.
  • Fallen objects such as a tree branch or projectile.

Not every comprehensive insurance policy will cover all of the above. Some policies may have exclusions for damages from specific sources, such as a wildfire if you reside in a high-risk area for that type of threat.

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What does comprehensive car insurance not cover?

Comprehensive coverage does not pay for damages to your or another driver’s vehicle resulting from a collision. It also does not pay for your or another driver’s medical and rehabilitation bills or loss of income due to an accident.

Collision coverage, which is also optional, is what will pay for damages to your car if you’re at fault for an accident. Third-party liability, which is a mandatory coverage included in all auto policies, pays for injuries to others as well as damages to another driver’s vehicle if you’re at fault for a collision.

Furthermore, comprehensive insurance does not include coverage if your vehicle is stolen by a member of your household or for a rental car accident. You can add an endorsement to your policy for rental cars known as Ontario Policy Change Form (OPCF) 20 or Standard Endorsement Form (SEF) 20 in Alberta.

Also, comprehensive insurance won’t pay for items inside your vehicle that are damaged that are not part of the vehicle, like a laptop computer. Your home or condo insurance policy will cover the cost of your personal belongings.

How does comprehensive car insurance work?

If you file a comprehensive claim for damages to your car, a deductible will apply before your insurer pays the repair bill’s balance. For example, if your comprehensive deductible is $500, and you have $2,000 worth of damages to your car, you must pay the $500 deductible before your auto insurer pays the balance. Usually, there is no impact on your premium for filing a comprehensive claim.

But know that your comprehensive coverage will have a limit. Typically, the limit on your comprehensive coverage will reflect the actual cash value of your vehicle. Insurers will normally calculate what your vehicle’s actual cash value is by considering its age, mileage, condition before the accident or incident, resale value, and what the selling price is of similar makes and models in your province or region.

Should you add comprehensive car insurance to your policy?

Whether or not you should include comprehensive coverage on your car insurance policy depends on a few factors. For example, how old is your vehicle and what is its value? Some drivers may opt to drop comprehensive coverage from their policies for a vehicle that is 10 years old or older as a way to save funds.

Ultimately, you need to weigh your risk tolerance and determine if you have the money set aside to pay to repair or replace your vehicle if it is damaged by a natural disaster, vandalism, or theft.

Liam Lahey

Liam Lahey is a versatile marketer with experience as a staff and freelance writer for many business and technology publications and newspapers. He previously worked as the editor and media spokesperson for RATESDOTCA, handling home, auto, and travel insurance topics.

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