What is Comprehensive Car Insurance?

Comprehensive car insurance can be a great addition to your existing policy. While not mandatory by law, it can be a requirement for leased cars and can save you many headaches. But what exactly is it and is this type of coverage right for you?

Here is everything you need to know about comprehensive car insurance, including what’s covered by it, what’s not, who needs it and more!

What Does Comprehensive Car Insurance Cover?

In short, comprehensive car insurance protects from damages and losses that aren’t covered by a collision insurance policy. In other words, it provides coverage for events you can’t control, including the following:

• Vandalism
• Damage caused by animals (including collision with wild animals)
• Theft or damage caused by an attempted theft
• Damage caused by falling objects (including trees)
• Damage caused by natural disasters like earthquakes, fires, flood
• Damage caused by several weather conditions, like hail, lightning, wind, etc.
• Damage caused by an explosion
• Damage caused by civil disturbances

Keep in mind that the extent of coverage may vary from one insurer to another, so please refer to your insurer’s policy to get a better picture of what their comprehensive coverage entails.

If you already have this policy and aren’t sure whether a recently suffered damage or loss is covered, you can look it up your policy’s Specified Perils clause to see whether the policy provides for that specific type of coverage.

What Does Comprehensive Insurance Not Cover?

Coverage excluded from comprehensive policies can include but aren’t limited to the following:

• Theft by a household member
• Damage to your vehicle from a collision
• Rental car accident after filing a claim
• Medical expenses or loss of income after a collision/accident
• Medical expenses or lost income for another person after a collision/accident
• Damage to another driver’s vehicle as a result of a collision

Should You Purchase Comprehensive Car Insurance?

When contemplating this question, it’s crucial to determine whether or not this particular policy meets your needs. Since it isn’t mandatory by law, some people choose not to have comprehensive car insurance as it means they’ll pay less on their monthly premiums.

However, this also means that they’re reducing their level of protection. For example, if a large tree limb falls on your car, you’ll be on a hook for extensive repairs.

Paying a little more can give you peace of mind, especially if you live in an area where the risks of any type of damage that could be covered by a comprehensive policy are higher. You won’t have to worry about having enough money to pay for out-of-pocket expenses if something happens to your car in a situation outside your control.

Comprehensive car insurance can particularly come in handy if you have a newer (and thus more expensive) vehicle, as it will cost more to repair than it would an older model. Lastly, if you have a car loan, your lender might require you to show proof of comprehensive car insurance to ensure you’ll be able to pay for any damages.

Is Comprehensive Car Insurance Mandatory?

In Canada, comprehensive coverage is optional, especially if you’re buying your vehicle outright or you’ve paid off your loan. However, it might be mandatory (by the lender) if you’re financing or leasing the car.

In this case, you won’t have the choice of opting out of having it on your active policy. When you finally pay off your loan, you’ll be able to decide whether to remove it based on your risk factors and whether or not you wanted the same type of coverage.

For example, if you drive an older vehicle and/or the car has pre-existing damage that isn’t worth fixing, you may not need comprehensive coverage.

Is Comprehensive Car Insurance Always Available for Purchase?

While most people purchase this additional policy when buying a vehicle or insurance, comprehensive insurance can be added to your existing policy at any time. There are a few exemptions, however.

For instance, if your car has extensive pre-existing damage or modifications for enhancing performance or other purposes, your insurer might deem you ineligible for comprehensive coverage.

Likewise, your insurance company may have restrictions based on vehicle age and refuse to secure coverage for vehicles above a certain age.

How Much Does Comprehensive Car Insurance Cost?

As with your regular car insurance, the costs of comprehensive coverage depend on many factors. These include your deductible, premium, the requirement of the province where you reside, and, of course, your insurance company.

While everyone will pay a different amount, full coverage premiums in Ontario often cost $2,000 or more. While those on a minimum coverage often pay around a third less than that, many deem comprehensive coverage as invaluable for the peace of mind and financial protection.

Final Thoughts

Comprehensive car insurance is an add-on to mandatory vehicle insurance policies. It has many benefits, including giving you the peace of mind of not having to pay out of pocket if your car is damaged due to theft, vandalism, or a natural force.

While it raises your monthly premiums, it can be a great investment if your risk of damages or losses is high, and you have a newer vehicle that could be very expensive to repair. If you’re interested in getting comprehensive, contact Ron Johnston insurance today and we’ll be happy to get you a quote.