What is comprehensive car insurance?

Buying auto insurance can be a confusing process, from the type of coverage to how much to pay for premiums and deductibles.

Almost all states require some degree of liability insurance to cover injuries or damage you cause in a car accident, including other drivers and their passengers. But there are also optional policies — such as comprehensive insurance, which pays for damages unrelated to the collision.

Here’s what you need to know about comprehensive car insurance, including what it covers and how to decide if it’s right for you.

Comprehensive insurance covers almost any non-collision-related damage or loss, including hail, fire, vandalism, falling tree limbs, theft and animal strikes.

Without it, you will need to pay out of pocket. Through it, repairs and replacements are covered, regardless of fault.

Comprehensive auto insurance is usually combined with collision insurance, which pays to repair or replace your car if it’s damaged in a collision with another vehicle or object.

If you’re in the market for auto insurance, CNBC Select recommends Geico and Nationwide for their affordable rates, high customer service ratings and wide availability.

Collision coverage covers the costs of repairing or replacing your vehicle after an accident involving another vehicle or object. Generally regardless of error. The comprehensive policy covers other scenarios, including vandalism, theft and natural disasters.

Both cover your car up to its actual cash value, or the replacement cost of the car minus depreciation. Additionally, they both have deductibles — or an amount you’re responsible for before the insurance company issues payment, which can range from $100 to $2,000.

The deductible is determined when you purchase the insurance policy, and generally, the lower the premium, the higher the deductible.

Typically, collision and comprehensive coverage are sold together. Along with liability insurance and any coverage your state requires, it’s part of full coverage car insurance. According to Bankrate, premiums for full coverage average $168 per month, while liability-only coverage averages about $52 per month.

Whether comprehensive coverage makes sense for you depends on the value of your car, how you pay for it, and your overall financial situation.

If you have an auto loan or lease your car, you’ll likely be required to have comprehensive coverage.
If you don’t have the cash to make repairs, comprehensive coverage may be helpful. But if your car is worth less than ten times your insurance premium, the Insurance Information Institute suggests abandoning it. (You can check your car’s value on sites like Kelley Blue Book.)

Whether your car is stolen or you hit a deer, comprehensive coverage can get you back on the road. But you will need to consider the value of your car to determine whether it is right for you.

At CNBC Select, our mission is to provide our readers with quality service journalism and comprehensive consumer advice so they can make informed decisions about their money. All car insurance The review is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of car insurance products. While CNBC Select receives a commission from affiliate partners on many offers and links, we create all of our content without input from our commercial team or any outside third party, and we pride ourselves on our journalistic standards and ethics. Check out our methodology for more information on how to choose the best car insurance.

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