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When purchasing car insurance, many drivers believe they can save by only buying what is legally required in their state. However, doing so could leave you with a large expense if your car is damaged in an event outside your control, such as theft, vandalism, or an act of nature. To have peace of mind knowing you are covered in these situations, you’ll need comprehensive coverage.

Comprehensive coverage pays for your vehicle’s repair or replacement costs if it is damaged in a covered non-collision event, up to your policy’s limits. Comprehensive car insurance isn’t required in any state, but a lender may require it as a condition of your finance contract or lease.

What Does Comprehensive Car Insurance Cover? 

Comprehensive coverage will cover the cost to repair or replace your vehicle (up to your policy’s limits) if it is damaged from…

• Car theft
• Vandalism, including catalytic converter theft
• Fire and explosions
• Falling trees, debris, and other objects
• Windshield damage from rocks or objects kicked up by other cars
• Storms, hail, wind, lightning, and earthquakes
• Interactions with a wild animal

Comprehensive insurance will not cover any of the following incidents:

• Damage to your vehicle that was caused by a collision with an object, or another vehicle regardless of fault (covered by collision insurance)
• Damage to someone else’s vehicle or property (covered by property liability insurance)
• Medical bills for another motorist as a result of an accident you caused (covered by bodily injury liability insurance)

Does Comprehensive Insurance Involve a Deductible? 

When you purchase comprehensive coverage, you’ll have the option of choosing your set deductible. In car insurance, a deductible represents the amount you must pay out of pocket towards a claim before your insurer handles the rest, up to your policy’s limits.

Most insurers allow you to select your deductible amount, with the most common deductibles being $250, $500, or $1,000. As a general rule of thumb, the higher your deductible is, the lower your coverage premium will be. Think of it as a trade-off:

• A lower comprehensive coverage deductible = a higher comprehensive coverage premium 
• A higher comprehensive coverage deductible = a lower comprehensive coverage premium 

Will Comprehensive Car Insurance Replace My Vehicle? 

Comprehensive coverage will pay repair and replacement costs for your vehicle, but only up to your policy’s limits. Exact limits may vary, but most providers cap payouts at your vehicle’s market value right before the accident. This is also called your vehicle’s actual cash value (ACV).

For example, let’s say your car’s ACV is $20,000, and you carry comprehensive coverage with a $500 deductible. One morning, you wake up to find that a tree branch has fallen onto your car, which causes significant damage. You contact your insurance provider, settle your $500 deductible, and wait to see if your vehicle can be repaired. If an auto shop can repair your vehicle, your insurance will cover repair costs up to your vehicle’s ACV minus the deductible. If your car cannot be repaired, your insurance will reimburse you for your car’s ACV minus the deductible, or $19,500, for you to put towards the cost of a replacement vehicle.

Do I Need to Purchase Comprehensive Coverage? 

As mentioned, comprehensive coverage isn’t typically required unless you finance or lease a car. If you own your car outright, you can decide whether comprehensive insurance is worth purchasing.

If you’re not sure whether comprehensive coverage is right for you, consider the following:

• Your car’s value: The value of your car plays a significant role in comprehensive coverage because limits are usually capped at your vehicle’s ACV. If you have an expensive car, the add-on coverage is most likely worth it to help pay for any repairs or replacement costs down the line. However, purchasing comprehensive coverage is not worth it if your vehicle is worth less than your plan’s deductible plus the cost of coverage.

• Your financial situation: If you had to replace your vehicle tomorrow, could you cover the cost? If not, comprehensive coverage could give you peace of mind knowing you are protected against unforeseen events.

What’s the Difference Between Comprehensive and Collision Coverage? 

You will typically see comprehensive coverage bundled alongside collision coverage when shopping for car insurance. Although both coverages pay for damage to your vehicle, the two cover different scenarios.

Unlike comprehensive coverage, collision coverage covers repair or replacement costs for your vehicle after a collision with another car or object, regardless of fault. Examples of covered collision events include crashing into another motorist, a single-car rollover, or a collision with a light pole. Collision insurance is also optional but may be required by a lender when financing or leasing.

Speak with an Insurance Specialist to Learn More

It’s important to look for auto insurance savings whenever possible, but rejecting certain add-on coverages could cause you to pay more for a repair or replacement in the future. If you’re unsure which add-on insurance coverages are right for you, AIS can help. 

Our team of insurance specialists can guide you through the options available and know what questions to ask to ensure you’re fully covered. To speak with an AIS specialist today, call (888) 772-4247.

The information in this article is obtained from various sources and offered for educational purposes only. Furthermore, it should not replace the advice of a qualified professional. The definitions, terms, and coverage in a given policy may be different than those suggested here. No warranty or appropriateness for a specific purpose is expressed or implied.

Despite its population and number of drivers, California is home to some of the country’s lowest minimum auto insurance requirements. Since 1967, California’s minimum limits have remained unchanged, even with increased medical care and vehicle repair costs. However, California has recently introduced legislation that will increase minimum liability requirements for the first time in over 50 years. Before we discuss upcoming changes, let’s first review California’s current auto insurance limits.

California’s Current Minimum Auto Insurance Requirements

Under current California law, all motorists in the state must carry liability insurance with the minimum limits of:

• $15,000 for bodily injury or death per person 
• $30,000 for bodily injury or death per accident
• $5,000 for property damage per accident

California’s current auto insurance limits were set in 1967 and have yet to change since. Unfortunately, a driver who only carries the minimum requirements may find themselves lacking coverage if they’re responsible for an accident in 2023. And state officials seem to agree. According to Ricardo Lara, California’s Insurance Commissioner, the state’s “current minimum coverage levels often [leave] California drivers at risk of being one accident away from financial ruin.”

In an effort to increase minimum coverage limits that better reflect today’s medical care and repair costs, California signed Senate Bill 1107 into law in September of 2022.  

What is Senate Bill 1107 and What Will It Change? 

Senate Bill 1107 is a bill that amends California Vehicle Code to increase the state’s required auto insurance liability limits. The bill was signed by Governor Newsom last year and goes into effect on January 1, 2025. Under SB 1107, California’s current limits will be replaced with the following in 2025:

• $30,000 for bodily injury or death per person
• $60,000 for bodily injury or death per accident
• $15,000 for property damage per accident

By increasing California’s auto insurance limits, drivers with minimum coverage will be less likely to find themselves in debt following a collision. These new limits will remain in effect for ten years until 2035, when they will increase again. On January 1, 2035, California drivers will be required to have the following minimum limits:

• $50,000 for bodily injury or death per person
• $100,000 for bodily injury or death per accident
• $25,000 for property damage per accident

Ricardo Lara says this new law will “ensure auto insurance keeps up with the change in times and that California’s drivers are more adequately protected.”  However, opponents of the bill cite the current economic strain as an argument against increasing limits.

For drivers that opt for meeting the minimum financial responsibility through cash deposits with the DMV, the current $35,000 amount required will increase to $75,000 in 2025. Ten years later, the cash deposit amount will increase again by $50,000.

Does Liability Insurance Cover Damage to My Car? 

Although you must purchase insurance that meets your state’s minimum requirements, it’s important to know that liability insurance does not cover your vehicle. Liability insurance protects you financially from any damage or injuries you cause to another person due to a car accident. To repair damage caused to your vehicle, you’ll need collision and comprehensive coverage.

Collision and comprehensive coverage covers repair or replacement costs (up to your policy’s limits) if your vehicle is damaged in a covered incident. Collision insurance applies when you’re involved in an accident with another car or stationary object. Comprehensive insurance applies when your vehicle is damaged in a non-collision event, such as theft, vandalism, or weather accidents. These coverage types are optional but may be required by your lender if you are financing or leasing a car.

AIS Can Help You Prepare

Although we know that California’s auto insurance limits will increase in 2025, we can’t say precisely how much each person’s insurance bill will change. As you prepare for the increase, building a habit of comparing quotes from multiple providers is more important now than ever. If you own your home, you may want to consider increasing limits now, rather than wait for these changes to take effect.

At AIS, we have over 55 years of experience helping our customers navigate the insurance marketplace. Our team of insurance specialists will assist you in your search for auto insurance quotes by utilizing our network of insurance partners to find you coverage that best works with your budget. Give us a call today at (888) 772-4247 to learn more about the coming changes and how AIS can help.

The information in this article is obtained from various sources and offered for educational purposes only. Furthermore, it should not replace the advice of a qualified professional. The definitions, terms, and coverage in a given policy may be different than those suggested here. No warranty or appropriateness for a specific purpose is expressed or implied.