Picture this. While you’re sleeping soundly in your warm bed, a windy winter storm rages outside. When you get up in the morning and head to your brand-new car, a tree branch has fallen on it – and caused some major damage. What do you do? Most people will hope that their auto insurance is going to cover the damage. But collision won’t cover it, and neither will your liability. The good news is, comprehensive coverage could – if you have it on your policy. And, comprehensive car insurance takes care of a lot more than just fallen tree branches. Read on to find out what else it covers – and learn the answers to some of the most commonly-asked questions about comprehensive coverage.
What is comprehensive coverage on my car insurance?
Comprehensive insurance is an optional coverage. It helps pay for damage to your car caused by certain things other than a collision with another vehicle or object.
It’s important for car owners to know the difference between collision vs. comprehensive insurance. In a nutshell, collision pays to repair or replace your car if it’s damaged in an accident with another vehicle or a stationary object (like a telephone pole), or if it rolls over. Comprehensive covers you if it’s damaged by the incidents listed just below. For more detail, check out our blog (and fun video) comparing the two.
You can have comprehensive insurance on your policy without collision. But, they’re generally offered as a package deal since the two combined provide the best level of protection. If you lease or finance your vehicle, they’ll more than likely require you to have both.
What does comprehensive insurance cover?
Also called “other than collision” in the industry, we sometimes call comprehensive coverage “bad luck” insurance, since it covers unfortunate events that could happen to your car – things that are mostly out of your control. These include:
- Theft or attempted theft
- Vandalism or civil disobedience, such as a riot
- Weather and natural disasters (floods or lightning from thunderstorms, hurricanes, tornadoes)
- Falling objects (like tree branches)
- Flying objects (like rocks or gravel)
- Fire or explosions
One of the most common questions is whether comprehensive insurance covers theft. The answer (as you can see above!) is yes. It’s a good thing, too, since on average a car is stolen every six minutes in Canada. And if you have a newer car with microchips and fancy gadgets, it’s that much more appealing to car thieves. That’s why it’s so important to have comprehensive on your policy, since it covers a range of theft-related situations. For example, if your car is stolen, vandalized and then found and returned to you, you could file a claim for the damage caused. Or, if it’s stolen and not found, you could file a claim to have your car replaced (at actual cash value). But, if your vehicle is stolen by someone in your household it’s not covered under comprehensive (this is only available under All Perils).
Did you know? There are things you can do to help prevent car theft. Check out our blog for tips, tools and more.
Is comprehensive insurance mandatory?
It’s not required by law, but leasing and financing companies will probably require you to have it. This is to make sure their financial interest in the vehicle is protected if something happens.
Is there a deductible on comprehensive insurance?
Like collision, you do have to pay a deductible on a comprehensive claim. You can choose what to pay based on the set dollar amounts offered by your insurer (usually $300, $500 or $1,000). If you lease or finance your car, your contract will probably require you to have a minimum deductible, too – so make sure you know what that is before choosing.
How much does comprehensive insurance cost?
Your insurance price is based on many different factors, so it’s hard to predict how much it’ll cost to add comprehensive to your policy. Insurance is tailored to a policy holder’s personal profile – which is why even if you drive the same car as your neighbour, you won’t be paying the same premium. Insurers look at things like your age, where you live, your driving record (more tickets means it’ll cost more), what you use your car for (and how often you drive it), and even the safety features you have on your car. It’ll also vary based on what province you live in and who you’re insured with.
Even though we can’t tell you exactly how much it’ll cost to add comprehensive, we can give you an idea of what insurers could consider when they calculate the cost:
- The type of car you drive and how likely it is to be stolen. Certain cars are more attractive to thieves – so they’re at a higher risk of being stolen. This could drive up your premium.
- The area you live in. Again, if you live in an area that’s more prone to auto theft or vandalism, you could see higher comprehensive premiums since an insurer has a higher chance of having to pay out for a stolen car. The same applies for areas with high incidences of hail, extreme weather events, etc.
- Cost for parts to be replaced. If you’ve got top-of-the line tech in your car, it could cost more to replace – which could up your cost to have comprehensive on your policy.
Is comprehensive insurance worth it?
In most cases it is, considering everything that could happen to your car beyond a road accident. Still, it’s up to you whether you want to add comprehensive. You’ll want to consider few things to decide if it’s worth it:
- Your car’s age, mileage, and value. If you have a new, higher-value car that hasn’t been driven much, comprehensive is a no-brainer. With it, you won’t have to pay out of pocket if it’s damaged. But, you might think about dropping comprehensive from your policy if you have an older, run-down car that isn’t worth very much and you’re just going to replace it with a newer, safer vehicle if something happens.
- The risk of natural disasters, hail, vandalism, and theft in your area. If where you live has a high incidence of any of these, it’s in your best interest to have comprehensive on your policy just in case.
- Your financial situation. Would you be able to pay for repairs or a replacement vehicle out of pocket? If not, you should probably have comprehensive coverage.
- Current cost to add comprehensive to your policy. If the extra premium is a small percentage of your car’s value – then yes, it’s definitely worth it. On the other hand, if the coverage is costing you $200 a year with a deductible of $300 but your car’s only worth $2,000, it might not be.
When should I drop comprehensive insurance?
People often stop their comprehensive when their car’s on the older side and has depreciated in value. It also depends on your financial situation. You should really only remove comprehensive from your insurance policy if you can afford to repair or replace your vehicle after a worst-case scenario – or if you intend to send the old car to the junkyard if something happens to it.
Does a comprehensive claim raise my insurance rates?
Unlike something like an at-fault collision, a comprehensive claim generally won’t increase your insurance premium at renewal.
But, be mindful when it comes to claims. If you’ve filed multiple comprehensive claims over the last few years, your insurer could increase your deductible, or even remove comprehensive coverage from your policy altogether. In any case, you should always consult your insurer if a claim-worthy event has happened to get their advice on what to do.
If you’re thinking about making changes to your coverage, get in touch with an insurance advisor first. They’ll provide guidance and help you choose what’s right for you and your vehicle.