Introduction
Auto insurance is confusing, particularly when trying to determine the difference between comprehensive and collision coverage. Both cover your car, but they pay for different kinds of damage. Understanding what each one does — and if you need both — is the key to making informed choices about your policy. This guide explains comprehensive and collision coverage so you can make an informed decision about what is best for you.
What is Comprehensive Coverage
Comprehensive coverage insures your car against damage resulting from occurrences other than a collision. It is also referred to as “other than collision” coverage. Comprehensive insurance can assist in paying for expenses should your vehicle be damaged or stolen by
Theft
Vandalism
Fire
Flooding
Hail
Falling objects such as tree branches
Wildlife such as colliding with a deer
For instance, if a hailstorm damages your hood or someone burglars your car and steals your stereo system, comprehensive coverage pays for repairs or replacements.
It is worth mentioning that comprehensive coverage typically carries a deductible — the cash amount you pay before your insurance picks up the remaining tab.
What is Collision Coverage
Collision coverage assists in paying for repairs to your car after a collision, no matter who is to blame. Whether you collide with another vehicle, a tree, a pole, or roll your car over, this coverage is applicable.
For instance
If you back into a pole by mistake, collision pays for the damage
If you collide with another car, collision assists in fixing your vehicle
If you drive over a pothole and wreck your suspension, collision pays for the repair
Similar to comprehensive, collision coverage also makes you pay a deductible before insurance pays the rest.
Major Differences Between Comprehensive and Collision Coverage
Although both forms of coverage protect your vehicle, they address different scenarios. Below is an outline of the major differences
Type of damage included Comprehensive includes non-collision occurrences such as theft, weather, or wildlife. Collision includes crash damage, even if you were at fault.
Who is at fault Collision will pay for your vehicle repairs even if you were responsible for the wreck. Comprehensive is for circumstances beyond your control.
Deductibles Both typically have a deductible, but you get to decide how much when you purchase the policy.
Optional or mandatory If you paid cash for your car, both coverages are optional. But if leasing or financing, lenders typically require both.
Do You Need Comprehensive Coverage
Comprehensive coverage is worth it for many drivers, particularly those who have newer or more expensive cars. It safeguards against unexpected things — such as weather, theft, or animal crashes — that might put you out a large repair bill or even without transportation.
You may require full coverage if
Your vehicle is newer or expensive
You reside in a region with severe weather, flooding, or wildfires
Car theft or vandalism is frequent in your area
You might not be able to repair or replace your vehicle out of pocket
But if you have an old car that isn’t worth a lot, paying for comprehensive might not be smart. For instance, if your vehicle is worth 2000 and your deductible is 1000, and you are charging 300 per year for comprehensive coverage, it may not be worth it.
Do You Need Collision Coverage
Collision coverage comes in handy if you wish to have your car repaired after an accident — whether or not you are responsible for the accident. It is most valuable for high-value or recent cars.
Have collision coverage if
Your car is new or high value
You drive frequently, particularly where traffic is high
You may not be able to afford out-of-pocket expenses for significant repairs
Your car is financed or leased, and your lender has it as a requirement
If your vehicle is older and of little market value, you could opt to forego collision coverage. For instance, if your vehicle is worth 1500 and repairs would exceed the value of the car, it might not be worth paying for collision coverage.
How to Select Proper Deductibles
Comprehensive and collision coverage both have a deductible — what you pay before your insurance pays. Typical deductibles are between 250 and 1000 or more.
A higher deductible reduces your monthly premium but requires you to pay more out of pocket if you make a claim
A lower deductible raises your premium but decreases your out-of-pocket cost if you make a claim
If you have a solid emergency fund, a higher deductible can save you on premiums. If you like fixed expense and reduced out-of-pocket risk, a lower deductible may be a better option.
What Happens if You Only Have Liability Insurance
Liability pays for the damage and injuries you do to other people — but it doesn’t cover repairs for your car. If you don’t purchase comprehensive and collision coverage and your vehicle gets damaged or wrecked, repair or replacement is your responsibility.
For instance
If someone steals your car and you have only liability insurance, you receive nothing
If a tree lands on your vehicle and you don’t have comprehensive coverage, you’re paying for the repair
If you collide with another vehicle and you don’t have collision coverage, liability covers the damage to the other car — but not to yours
Saving Money on Comprehensive and Collision Coverage
If you find you want to buy both coverages, here are some ways to save:
Select higher deductibles if you have enough money to pay more out of pocket
Bundle your auto and home or renters insurance for a discount
Inquire about safe driver discounts or low mileage discounts
Drive a car with safety features or anti-theft equipment
Review your policy every year and compare quotes so that you can get the best rate
Conclusion
Comprehensive and collision cover your vehicle in two different ways. Comprehensive insures against non-crash events such as theft, vandalism, or damage caused by the weather, and collision insures against crashes regardless of who was at fault. Depending on the value of your car, your finances, and how much risk you’re willing to assume, you might require one, both, or neither. If you know what you’re comparing, you can make an intelligent decision that gets you the coverage you need without breaking the bank.