When buying car insurance, it’s crucial to know what types of coverage are out there. Comprehensive and collision insurance are two of the most critical types of coverage. Both pay for damages to your car, but they’re for different kinds of accidents. In this guide, we will demystify the main differences, advantages, and when you need each type of coverage.
What Is Collision Coverage?
Collision coverage pays for damage to your car resulting from a crash, regardless of who is at fault. This includes:
Accidents with another vehicle.
Collisions with stationary objects (e.g., poles, guardrails, fences).
Single-car accidents (e.g., rolling over or hitting a pothole).
When Is Collision Coverage Useful?
Collision coverage is particularly useful if:
You have a newer or expensive car that would be costly to repair.
You frequently drive in high-traffic areas, increasing the likelihood of accidents.
You own an auto lease or loan that needs this coverage.
What Collision Coverage DOESN’T Cover
Theft or vandalism damage.
Natural disasters like storms or floods.
Animal collisions (e.g., running into a deer).
Medical payments for you or others in the accident.
What Is Comprehensive Coverage?
Comprehensive coverage insures your car against damage due to non-collision incidents, such as:
Theft and vandalism.
Natural disasters (e.g., tornadoes, hurricanes, floods).
Fire damage.
Debris (e.g., tree limbs, hail).
Animal damage (e.g., collision with a deer).
When Comprehensive Coverage Comes In Handy?
Comprehensive coverage will be handy if:
You live in a weather-prone or disaster-prone area.
Your vehicle is an expensive model with high repair and replacement costs.
You leave your vehicle outdoors or in unsecure areas where stealing or vandalism occurs.
What Comprehensive Coverage Does NOT Pay For
Damage resulting from collisions with another car or a stationary object.
Medical charges for accident-injured body or limbs.
Mechanical breakdown or wear and tear.
Important Distinctions Between Comprehensive and Collision Coverage
Feature
Collision Coverage
Comprehensive Coverage
Protects against damage to the vehicle in accidents
Protects against theft and vandalism
Protects against natural disasters
Protects against hitting an animal
Mandatory for lenders for financed/leased vehicle
Protects against medical bills
Do You Need Collision and Comprehensive Coverage?
Whether or not you need both types of coverage depends on a number of factors, such as the worth of your car, your budget, and your tolerance for risk. Consider these scenarios:
If you own a new or high-value car: Collisions and comprehensive coverage are strongly suggested to cover your investment.
If you own an older car with low market value: You can omit either one or both of these coverages, as the insurance cost might be more than the value of the car.
If you have a loan or lease: Both collision and comprehensive coverage are usually required by lenders until your loan is satisfied.
If you reside in a high-theft or high-disaster area: Comprehensive coverage is a good decision to cover you against unexpected damage.
How Much Do Comprehensive and Collision Coverage Cost?
The cost of these coverages varies depending on:
Your car’s make, model, and age.
Your claims and driving history.
Your deductible level (higher deductibles reduce premiums but raise out-of-pocket costs when making a claim).
Your location and exposure to risk (e.g., high-theft neighborhoods or accident hotspots).
Collision coverage, on average, is more expensive than comprehensive coverage since accidents happen more often than events such as theft or natural disasters.
Conclusion
Both collision and comprehensive coverage are beneficial, but they are for different things. Collision coverage covers against accident damage, and comprehensive coverage covers against non-collision incidents such as theft and weather damage.
When you decide whether or not to buy these coverages, take into account the value of your car, your budget, and possible risks. If you have the means to pay for repairs or replacement yourself, you can skip one or both. Yet, for peace of mind and protection financially, keeping both coverages is usually the best option. Compare insurance quotes always and consult with an agent to figure out the proper amount of coverage for your requirements.