What is comprehensive coverage on an auto policy?
Comprehensive coverage covers your car against theft, fire, vandalism, damage from a falling object, flood, animal and other non-accident damage. It is purchased on a car by car basis on a policy, meaning that not all cars on a given policy have to have it, or to have the same deductible chosen. You might have a auto insurance policy with two cars for example, one of which is a 2011 vehicle that is leased, the other that is a 1999 car that you don’t wish to carry comprehensive coverage on. Deductibles are selected by the owner, although if a car is leased or financed the bank has the right to dictate the maximum deductible allowed.
An example of how comprehensive coverage works:
A policyholder has a new car and is driving when a deer jumps into the vehicle’s path. The car is damaged badly and is deemed to be “totaled.” This means that the damage exceeds the market value of the car in the owner’s locale. The auto company will issue a check for the market value, less the deductible. If the car is leased or financed, the check is generally sent to the lien holder to pay off the loan/lease, and the owner then receives the balance, or a bill if the car loan is valued at more than market value.