What is Comprehensive Car Insurance?

The average consumer is faced with a flurry of unknown terms when shopping for car insurance.  What’s worse is that much of the vocabulary is shortened into acronyms, in a manner that makes them impossible to understand if we aren’t familiar with the words to begin with.

What better example than comprehensive coverage?  Do you need full coverage?  Do you need “physdam?”  Do you want collision?  Do you want “comp” and collision?  Is your head spinning yet?  This is the typical experience of an insurance shopper.

So, what is “comprehensive car insurance” anyways?  Let’s break it down to better understand what we’re looking at here.

First off, it’s important to understand that there are two basic types of car insurance available.  Liability insurance, which is coverage for bodily injury and damage to other people’s property you may cause, and physical damage insurance, which covers you for damage you may cause to your own vehicle (what is physical damage coverage?).

Physical damage coverage is further broken down into collision and comprehensive coverage.  Collision coverage is just that – it covers damage you cause to your car in the event of a collision, which is defined as the striking of another vehicle or object.

This is coverage for your basic car accident; you know, the one that makes you late to work every morning when one car bumps into another.  (On a side note, collision with an animal is not covered here.  Your insurer will deny a claim filed for striking a deer if you only have collision coverage.)

Comprehensive coverage, on the other hand, covers the aforementioned deer incident.  In addition to that, “comp” or “OTC” (Other Than Collision) covers many other causes of automobile physical damage.  Let’s face it.  There are a million ways to get dents and dings in your car without actually striking an object.  Doubt it? Perhaps a tree falls on your car, or it is broken into while parked at a friend’s apartment complex?  Or worse yet, stolen.

There are a few general exclusions to what types of loss, or perils, are covered by comprehensive physical damage insurance.  But don’t let that stop you from purchasing this coverage if it’s within your budget, as two of the exclusions are war and riot!

Each insurer may have different rules regarding what is and isn’t covered by each policy.  I suggest you call your direct insurer or independent insurance agent to discuss the coverage on your current policy in detail or shop for an online quote.

Typically, you cannot purchase comprehensive car insurance coverage without collision coverage.  When you have liability coverage, which is typically mandatory, along with comp and collision, it is referred to as “full coverage.”

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This post was written by The Truth Team on September 28, 2009 Comments (0)