Definition

• Comprehensive coverage is a shortened name for comprehensive physical damage coverage. A policy insures the driver's own vehicle and other vehicles the driver may operate from damage, theft or disasters, including fires and floods.
  
  

What It Covers

• Comprehensive insurance covers damage to a vehicle that may be hit by a tossed or falling object, burned in a fire, destroyed by water in a flood, vandalized or destroyed in a natural disaster, including earthquakes and windstorms. In some cases, the coverage is extended to human causes, such as riots and broken glass.
  
  

Financial Limit

• Each policy is written according to the fair market value of the vehicle, whether it is new or used. Comprehensive insurance will cover only that fair market value, excluding any aftermarket enhancement that does not add actual value to the vehicle.
  
  

Comprehensive vs. Collision

• On insurance policies considered to be full coverage policies, comprehensive coverage is often sold with collision insurance, because they each cover what the other does not. While collision covers the vehicle in an accident, comprehensive covers other types of damage that may occur. The two are often sold together, but may be sold separately.
  
  

Deductibles

• An insurance policy's deductible is the amount that must be paid before the coverage begins. For example, if the loss is $2,500 and the deductible is $500, the insured must pay $500 before the insurance pays the remaining $2,000. Some policyholders select higher deductibles to keep the insurance premiums low. Even if the car is financed or leased, the policyholder, not the bank, sets the deductible amount.