Comprehensive insurance can be an important financial backup after a variety of problems. State laws don’t require you to buy comprehensive car insurance, but having it can be smart, especially if your car is new.

What Is Comprehensive Insurance?

Comprehensive insurance is an optional car insurance type that pays to repair your car or pays you the value of the vehicle if it’s totaled due to specific problems. It also compensates you if your car is stolen. Insurance checks for a comprehensive claim will be reduced by the amount of your deductible.

Comprehensive car insurance fits in with liability and collision insurance as part of a good auto insurance policy.

Liability car insurance is required in nearly all states to drive legally, but only pays for damage you accidentally cause to others and for legal costs if you’re sued. Collision insurance is optional and covers damage to your car from accidents or from hitting an object, like a fence. These types of car insurance—along with comprehensive insurance—comprise what’s often called a “full coverage” car insurance policy.

If you lease or finance your vehicle, a lender usually requires you to purchase comprehensive and collision insurance to protect their financial interest.

Like collision insurance, comprehensive insurance has a car insurance deductible, or the amount of money your insurer will deduct from a claims check. Insurers typically offer a range of deductible options. A higher deductible often lowers your rates, but your out-of-pocket expenses will be higher should you file a claim.

Related: Cheapest Full Coverage Car Insurance

What Does Comprehensive Car Insurance Cover?

Comprehensive car insurance covers your vehicle for repair or replacement costs due to:

  • Car theft.
  • Civil disturbances, like a riot.
  • Crashing into an animal, such as a deer.
  • Damage caused by rodents.
  • Falling objects, such as a tree limb.
  • Fire and explosions.
  • Floods.
  • Severe weather, like hail or a hurricane.
  • Vandalism.
  • Windshield and glass damage.

For instance, if a deer jumps in front of your car and you hit it, causing bumper and frame damage, comprehensive insurance will pay out. Or, if a rock flies up from the road and cracks your windshield—you can file a comprehensive claim for windshield repairs. Another common scenario: If your vehicle is dented by hail, you can file a comprehensive insurance claim for hail damage.

How Comprehensive Insurance Claims Affect Car Insurance Rates

You might be worried that filing a comprehensive insurance claim will hike your auto rates.  Some car insurance companies may increase your rate after a comprehensive claim. That’s because they consider you a higher risk to insure, as it can indicate you’re more likely to file future claims.

Typically, your car insurance rates won’t go up as much for a comprehensive claim as they would for an at-fault accident.

Recovered cars and comprehensive insurance claims

Let’s say your car is stolen and you file a comprehensive theft claim, but haven’t been paid yet. Then, your car is recovered and it’s damaged. Your insurer will pay for repairs, up to the actual cash value of your car, minus your deductible. If the recovered car is totaled, your insurer applies your deductible and pays the actual cash value of the car,  just as it would if the car was not found after the theft.

If your stolen car is recovered after you’ve been paid for your comprehensive insurance claim, the car insurance company takes ownership of the car.

Who Needs Comprehensive Auto Insurance?

Car owners who finance or lease their vehicles usually must purchase and keep comprehensive insurance until they pay off their cars.

Even if you aren’t required to carry it, comprehensive insurance can still be beneficial, especially if your vehicle is new or costly to repair.

Drivers in areas prone to natural disasters should consider comprehensive insurance because of the increased chance of vehicle damage from wildfires, hail, tornadoes, hurricanes, earthquakes and other weather-related issues.