What does comprehensive auto insurance cover?

The first thing to do when considering comprehensive auto insurance - or any other type of insurance for that matter - is read the fine print. Some policies don't cover certain kinds of damage, such as damage to GPS navigation or satellite radio systems that aren't permanently installed in the car, while others cap the amount of coverage for these items [source: Maine Bureau of Insurance].

A driver should also consider whether the car is likely to be exposed to hazardous conditions. A car parked on a busy city street, for example, is probably more likely to be damaged or stolen than one that is parked in a secure garage and, as a result, likely subject to a higher comprehensive insurance rate [source: Cadet].

Ultimately, the car's value is the most important factor in determining whether comprehensive coverage is a good idea. In the event that a covered car is damaged, the most that this coverage will pay out is the cash value of the car at the time it was damaged, less the deductible amount. For a car that's not worth much - perhaps because it's old or banged up - the payout may be less than or equal to the cost of the insurance [source: Allstate].

Consider for example a car worth $1,000 at the time that it is mauled by a cougar that escaped from the local zoo (or, more likely, stolen or damaged by a falling tree branch). If the owner has comprehensive insurance with a $500 deductible, the most the coverage will pay is $500. With comprehensive rates averaging about $113 a year, a driver who's paid for the coverage for four or five years may get a payout close to what the driver has already paid in premiums. One common rule of thumb is that the annual cost of comprehensive auto coverage should be less than 10 percent of the vehicle's cash value [source: Consumer Reports].

In other words, the purpose of comprehensive auto insurance is to protect the value of the car from non-accident damage. If the value is already low, it may not be worth protecting.

When I lived in Atlanta, it wasn't out of the ordinary to hear ambulances and fire trucks rumble by my apartment complex, sirens blaring. The road adjacent to my apartment complex connects the downtown and college areas to a major hospital. It was unusual, however, for medical and fire personnel to stop their big rigs right outside my window in the middle of the night. So when I realized one night that the fire engine whose siren penetrated the walls of my apartment like they were papier mâché was not moving, but rather parked alongside my apartment complex, I figured I should see what was going on. When I left the apartment and descended three flights of stairs to the outdoor parking lot, I realized that I was trapped. A heavy rain had flooded the entire lot and the water was rising into the living rooms of first floor units. Twenty-five or so cars had also been swept up in the flood and were floating around the lot like unmanned bumper cars. One of them was my relatively new Honda Civic. It's a good thing that I had comprehensive auto insurance.

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