Historically referred to as Fully Comprehensive or Fully Comp, these terms have been dropped in recent years in favour of Comprehensive insurance but what is comprehensive motor insurance and what does it cover?
Comprehensive motor insurance is the widest forms of motor insurance as it provides extensive cover for loss or damage cover to the insured vehicle.
What does comprehensive motor insurance cover?
In addition to the protection provided by Third Party, Fire and Theft motor insurance, Comprehensive motor insurance provides indemnity in respect of any loss damage to the insured vehicle that is not excluded by the policy wording whilst within the territorial limits stated in the policy. Principally, cover is included for accidental loss or damage to the insured vehicle.
As with Third Party, Fire and Theft motor insurance, the indemnity provided by Comprehensive motor insurance in respect of insured loss or damage to the insured vehicle is the cost of repair or replacement but limited to the market value of the insured vehicle. Where the cost of repair or replacement exceeds the market value of the insured vehicle, the insurer will pay the market value of the insured vehicle in settlement of the claim with the salvage becoming the property of the insurer for their own use or disposal.
The basis of settlement of claims for insured loss or damage to the insured vehicle is indemnity. This means the intention of the policy is put the insured in the same position as they were prior to the insured loss or damage, and settlement of a claim should take into account wear, tear and betterment. Where there is betterment, i.e. the insured is in a better position than prior to the insured loss or damage, the insurer may ask for a contribution to the claim taking into account the amount of betterment involved.
Comprehensive motor insurance policies usually contain a new vehicle replacement cover endorsement extending the indemnity basis of settlement of claims, where the insurer agrees to provide the insured with a new vehicle, if the insured vehicle is not older than a specified age and the vehicle is stolen and not recovered or the cost of repair of the insured loss or damage to the insured vehicle exceeds a specified amount.
Comprehensive motor insurance often has a number of extensions to cover that are not applicable to Third Part Only or Third Party, Fire and Theft motor insurances. These extensions can include Windscreen cover, without loss of No Claim Discount and with a low excess, personal belongings, medical expenses, personal accident and replacement locks.
An excess is usually applicable to each and every claim in respect of insured damage to the insured vehicle, but there is no excess applicable to third party claims.
What isn’t covered by comprehensive motor insurance?
Comprehensive motor insurance offers wide cover for the legal liability for injury to third parties and damage to third party property and for insured loss or damage to the insured vehicle and is subject to few significant exclusions.
Each section of the policy and the policy extensions are subject to exclusions, but the intention of the policy, in addition to the third party coverage, is to provide cover in respect of extraneous loss or damage to the insured, but not wear, rear and maintenance.
How much is comprehensive insurance?
The increase in cost between Comprehensive and Third Party, Fire and Theft has changed radically over the last few years. At one time a Comprehensive policy would generally cost about double that of Third Party, Fire and Theft. However, the increased costs of third party injury and accident claims has eroded the difference significantly as both levels of cover are picking up these increased losses. In many cases the difference in cost is minimal and some insurers will not offer third party fire and theft policies in certain circumstances.
Who buys Comprehensive motor insurance?
Comprehensive motor insurance is usually bought where insurance for loss or damage to the insured vehicle is a priority or the cost of Comprehensive insurance is considered economical compared to the value of the insured vehicle.