Do I Need Comprehensive Coverage?

Cars driving on a highway
Photo: peeterv/Getty Images

Most drivers know they need insurance, but it's sometimes difficult to know what kind of insurance coverage you need. For instance, do you need comprehensive coverage for your vehicle?

Understanding how comprehensive coverage differs from other forms of insurance can help answer that question. Comprehensive coverage covers a broad spectrum of potential physical damage claims. It includes coverage for vandalism, contact with an animal, windshield damage, and more.​

Here are five questions to ask that can help you decide whether or not you should purchase comprehensive coverage.

Is Comprehensive Coverage Required by State Law?

Fallen tree on a car, Washington DC, USA
Glowimages/Getty Images

Although state laws vary by state, nearly all states require liability and property damage coverage. However, comprehensive coverage goes further, and that means it's unlikely to be required in your area. When in doubt about your legal obligations, check with your state's department of motor vehicles (DMV).

Two states effectively allow drivers to avoid car insurance. New Hampshire doesn't have a law requiring drivers to maintain any level of insurance. However, drivers in New Hampshire without insurance are held personally responsible for the cost of any medical bills or property damage caused by a crash.

In Virginia, drivers can avoid insurance requirements by paying an "Uninsured Motor Vehicle" fee. Like in New Hampshire, Virginia drivers are responsible for covering the costs related to a crash, whether or not they have insurance coverage.

Do You Have a Loan on the Vehicle?

Man signing car loan paperwork

Witthaya Prasongsin / Getty Images

Many lenders require full coverage insurance on vehicles they have financed. Comprehensive insurance is part of that mandatory coverage. When you sign your loan papers, you agree to protect the vehicle against physical damage by purchasing both comprehensive and collision insurance. You are also required to purchase comprehensive and collision coverage if you lease a vehicle.

Failure to notify your lender of your insurance coverage can lead to expensive penalties. Ask your insurance agent to list your lender as loss payee on your vehicle. By doing so, your insurance carrier will automatically notify your lender of your coverage.

What Is Your Level of Risk?

Tornado-caused car wreck

 photovs / Getty Images

Do you regularly drive on country roads where deer frequently cross? Do you park your car under an aging tree every night? Do you live in tornado alley?

All of these things could increase the risks to your vehicle. If you decide your car faces a lot of risk, then it could be worth the costs to add comprehensive coverage to your insurance policy—for the peace of mind, if nothing else. On the other hand, if you live in a city with mild weather and park in a garage, you may feel secure without additional coverage.

What Is the Value of Your Vehicle?

Woman counting money by her car

SDI Productions / Getty Images 

If a tree branch falls on your car and you have to make a claim, your payout will depend heavily on how much your car was worth to begin with. That's why knowing the value of your vehicle will help you determine if it is worth it to pay for comprehensive coverage. Check with Kelly Blue Book and the National Automobile Dealers Association (NADA) to get a good estimate of your vehicle’s value.

One rule of thumb is to compare the value of your car to the premiums you'd pay with the comprehensive coverage. If your car isn't worth at least 10 times more than the cost of premiums, then the coverage might not be a cost-effective policy.

How Much Does Comprehensive Coverage Cost?

Calculator and keys on car insurance paperwork

 Bill Oxford / Getty Images

To compare the cost of insurance to the value of your car, you've got to do some research to find out how much comprehensive coverage would actually cost you.

The great thing about comprehensive coverage is it is typically reasonably priced. As long as you are not a high-risk driver, comprehensive coverage can be well worth the price. Even an older vehicle might still be worth a windshield replacement. Determine how much you would pay for comprehensive coverage by calling your insurance agent or your insurance company directly.

The Bottom Line

There are solid arguments on both sides when it comes to whether or not to maintain comprehensive coverage. Such versatile coverage makes it hard to give up. However, removing coverage from your car insurance policy will usually save money.

Unfortunately, without a crystal ball, you do not know if—or when—you will have to make a claim. Any serious accidents could negate the savings of removing comprehensive coverage. That makes this issue a personal decision that depends heavily upon your specific situation.

Was this page helpful?
The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
  1. Insurance Information Institute. "What Is Covered by Collision and Comprehensive Auto Insurance?"

  2. Allstate. "New Hampshire Car Insurance."

  3. Virginia Department of Motor Vehicles. "Insurance Requirements."

  4. Allstate. "What Is Comprehensive Insurance?"

  5. Insurance Information Institute. "Nine Ways to Lower Your Auto Insurance Costs."

Related Articles