DEFINITION of 'Comprehensive Insurance'
A type of automobile insurance that covers damage to your car from causes other than a collision. Comprehensive insurance would cover your vehicle if it was destroyed by a tornado, dented by a run-in with a deer, spray painted by a vandal, damaged by a break-in or crushed by a collapsing garage, among other causes.
BREAKING DOWN 'Comprehensive Insurance'
Comprehensive insurance, collision insurance and liability insurance are the three components of an automobile insurance policy. State law requires drivers to carry liability insurance, but collision and comprehensive insurance are optional if you own the vehicle outright. If you have financed the vehicle, your auto loan company might require you to carry comprehensive insurance. If you have paid for the vehicle in full and you can’t afford comprehensive insurance, you own an older automobile that doesn’t have much value, you think you’re at low-risk of non-collision damage, or you prefer to self-insure, you can choose not to purchase comprehensive insurance. On the other hand, even if you own your automobile free and clear, if you live in a rural area where collisions with animals are common, in a stormy area that often gets hail, or in a higher-crime part of town where break-ins and theft occur regularly, you might want to purchase comprehensive insurance.
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