Little-Known Quirks in Comprehensive Insurance

By Jessica Bosari
After 13 years in personal and commercial insurance, Jessica Bosari now writes about personal finance, car insurance, risk management and related topics. Since 2008, she has been simplifying complex ideas through engaging articles for her readers.

Little-Known Quirks in Comprehensive InsuranceWhen you want to be sure you have the money to fix your damaged car, two main types of insurance coverage can help. Referred to as “physical damage” coverage within the industry, they include collision and comprehensive insurance. Collision covers damages caused by an accident. Comprehensive insurance pays for other types of damage that you can’t pin on another driver. The nature of this insurance creates all sorts of quirky scenarios that will make you shake your head.

How Comprehensive Insurance Works

Comprehensive insurance, sometimes called “other than collision,” covers accidental damage resulting from everything else that can happen to your car. This includes events like theft, fire, flood, windshield breakage, or even the wind blowing a shopping cart into the side of your car in a parking lot. Most of the time, comprehensive claims involve incidents that happen when no one is behind the wheel, but there are exceptions.

For instance, damage caused by forces of nature, even when you’re behind the wheel, fall under comprehensive insurance. Think of striking a deer with your car, a rock hitting your windshield, or driving into a hailstorm. Drivers are sometimes frustrated by similar damages that aren’t considered forces of nature but probably should be. A pothole is a perfect example. If you run over one (or any other road debris for that matter) and damage your car, the claim falls under collision.

Don’t Swerve

Another frustrating example is that of almost hitting an animal. Sadly, you’re better off financially if you don’t try to avoid hitting the deer that runs in front of your car. If you swerve to avoid hitting an animal, running off the road into a ditch, the damage to your car falls under collision and you’re at-fault. If you do nothing and let the car run into the deer, possibly breaking your own neck in the process, it falls under comprehensive. I’ve had many an animal lover on the phone in the claims department bemoaning that rule. Whether they hit the animal or not, they don’t like the way the claim plays out.

Is It the Fault of the Driver or the Weather?

Nature can create another weird scenario to tie your brain in knots. I once had a claim where an insured was opening her car door and a huge gust of wind ripped the handle away from her. The car door flew open and hit the car next to her. Collision or comprehensive? At-fault or not?

In the end, I decided that the accident was probably my insured’s fault. The weather report for that day confirmed there were strong winds, but not THAT strong. I felt bad about it, but I had to reason it out.

If the weather report had showed no human could possibly hold onto a car door in that wind – with hurricane force gusts blowing – I would have placed it under comprehensive coverage. In that case, I would then have to battle the other driver’s insurance company after the fact, when they tried to recover money for the damages to the other car. No matter which way it went, somebody was going to end up unhappy.

Comprehensive and Collision Go Together

Interestingly, you can’t carry collision coverage without comprehensive coverage. In rare cases, such as having a classic car in storage, you can carry comprehensive only, but it won’t work the other way around. Insurance companies won’t sell you comprehensive coverage unless you buy collision coverage too. Why? There’s simply too much temptation for car owners to skew the facts to get a claim covered.

Say you have collision coverage, but not comprehensive and someone steals your car, running it into a telephone pole. There will be a huge temptation to lie and say you fell asleep at the wheel and hit the pole yourself. That means there’s a car thief running around loose with no police chasing him. There are simply too many ways for people to alter the truth, rather than face an uninsured claim.

Stupidity is a Covered Cause of Loss

I don’t mean to sound insulting, but some claims arise because we have a nut loose behind the wheel – aka, the driver. If you leave your car unlocked in a bad neighborhood and somebody steals it, it’s covered. If you’re not careful with cigarette butts and your car catches on fire, it’s covered. If you drive through a hailstorm instead of parking under the safety of an overpass, it’s covered. Comprehensive is one of the few types of insurance that doesn’t care how smart or careful you are.

Deductibles on Comprehensive Insurance

Comprehensive insurance is different because it has more than one deductible, depending on the damage. For glass damage claims, there is usually a separate, smaller deductible. You can skip that deductible if you use a shop that bills the insurance company directly. Shops and insurance companies work out agreements on the cost of repairs that save the insurance company a lot of money. The insurance company encourages you to use these money-saving shops by waiving the deductible when you use them.

For any other comprehensive claim, however, you will have a deductible. The deductibles on collision and comprehensive coverage are a matched pair. If you have a $500 deductible for car accidents, you’ll have the same deductible for comprehensive claims.

How Claims Affect Your Rates

Whether a comprehensive claim affects your car insurance rates depends on the laws in your state. In states with strong consumer protections, your insurance company is barred from raising your rates because of a comprehensive claim, unless you have a ridiculous number of claims in a short time span. In those states, only at-fault accidents and across-the-board increases, where rates go up for everyone, can affect your rates under most circumstances. But if you have a bad year and your car is stolen twice, or you have a really bad commute with rocks flying at you left and right, causing several windshield claims, you could see your rates go up because of comprehensive claims.

Physical Damage Coverage that Doesn’t Pay for Physical Damage

The last point I’d like to make about the quirks of comprehensive coverage is related to an insurance ride that covers Towing and Labor. It’s the one coverage that will pay a claim that doesn’t come from accidental damage. Under this insurance, you can make a claim if your car breaks down because of mechanical failure. This insurance doesn’t pay for the parts to fix the breakdown, just the labor costs and the tow.

No other insurance coverage causes so many sticky situations. In the end, comprehensive coverage is a good deal for those in states that only allow rate increases for at-fault accidents. For the rest of you – not so much.