Who requires Comprehensive Insurance?

Comprehensive insurance is often required by finance companies when a vehicle is financed or leased. This type of insurance provides coverage for a wide range of potential damages to the vehicle that could occur from incidents other than collisions, such as theft, vandalism, or natural disasters. Since finance companies have a vested interest in protecting their collateral—the vehicle—they mandate this coverage to ensure that they can recover the value of the car in case it gets damaged or lost.

On the other hand, all drivers may not be required to have comprehensive insurance by law, and not every state mandates it. Instead, certain minimum coverages like liability insurance might be required by state laws. The Department of Motor Vehicles (DMV) does not set insurance requirements in terms of what specific coverage drivers must carry; they focus on registration and licensing. Therefore, the requirement for comprehensive insurance primarily comes from finance companies when individuals are financing their vehicles.