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What is Comprehensive Auto Insurance?

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Drivers who are buying car insurance should be able to answer the question, what is comprehensive auto insurance. Comprehensive auto insurance is a specific type of coverage. it is often purchased in conjunction with collision insurance, but can also be purchased separately.

What is Comprehensive Auto Insurance?

Comprehensive auto insurance protects you from damage caused to your car by any non-accident situation. For example, if your car is stolen, comprehensive auto insurance will pay you the replacement value of your vehicle. Comprehensive auto insurance will also pay for damage occurring as a result of most natural disasters, such as fire, flood, hail, or wind damage.

Each policy that contains comprehensive coverage will explain specifically what types of incidents are covered under a comprehensive auto insurance policy. The policy may have exclusions, but generally provides wide coverage for any situation in which your car is damaged, except for an accident.

If you wish to protect your vehicle from an accident, you will need to purchase collision insurance in addition to comprehensive insurance. Collision insurance will pay to repair or replace your vehicle in an accident you cause.

Comprehensive and collision insurance are both distinct from liability insurance. Liability insurance pays damages to other people that you injure as a result of an accident, and pays for damages you cause to other people's property. Liability insurance, in other words, protects others from damage and protects you financially from having to pay those damages out of pocket.

How Comprehensive Auto Insurance Works

If you have a comprehensive policy and you incur damage, your insurer will determine the amount that must be paid to either repair or replace your car. This amount is reduced by your deductible. For example, if your car is stolen, the insurer will determine the replacement value. if the replacement value is $10,000 and you have a $500 deductible, the insurance company will issue you a $9500 check to replace your vehicle.

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