Definition

• Comprehensive insurance is the broadest form of insurance coverage available, according to Business Dictionary. It usually is associated with automobile insurance, although agents from different insurance areas may refer to extensive policies as comprehensive. Comprehensive insurance covers events such as fire, theft, bad weather and vandalism.
  
  

Coverage

• Definitions of comprehensive insurance from InvestorWords and PE File Car Loans websites explain that comprehensive insurance covers non-collision events. Business Dictionary points out that, when referring to an automobile policy, comprehensive insurance covers the driver and the vehicle, as well as the third party driver, vehicle and property. This coverage applies even if you are at fault under most circumstances.
  
  

Comprehensive Vs. Collision

• Some definitions of comprehensive insurance such as the one from Business Dictionary state that comprehensive insurance covers collisions. Technically, this is not true. Collision insurance is what covers collision expenses; comprehensive covers expenses from non-collision events. The confusion stems from the fact that people who buy comprehensive insurance typically purchase collision insurance as part of their policy anyway, thereby making the two types of insurance appear as synonymous or as a unit.
  
  

Premiums

• Business Dictionary explains that insurance companies calculate comprehensive insurance premiums on multiple factors. These include engine size, driver history and vehicle value. Generally speaking, comprehensive coverage increases premiums, but for the amount of extra coverage you receive, it is worth the expense.
  
  

Legal Requirements

• Most states do not force you to carry comprehensive insurance. However, if you are leasing your vehicle or have not paid off your auto loan in full, the lender that provided funds for the vehicle still will have a legal interest in your vehicle. Because the lender will see your vehicle as an asset which it wants to protect until you have paid your debt in full, it may require you to carry comprehensive insurance as part of your loan agreement.
  
  

Use

• You generally will want to have comprehensive insurance if your vehicle or other property still is of significant value. You'll also want it if you live in an area with high crime rates, although this may increase premiums. You can get by without comprehensive insurance once your property has depreciated to the point where coverage would be more expensive in the long run than replacing the property on your own.