Collision vs. Comprehensive Car Insurance

There are two types of auto insurance coverages: collision and comprehensive. They are both legally optional and cover the cost of car damage, but they do so in different ways.

Collision coverage pays for damage to your car caused by a collision, whereas comprehensive coverage pays for damage caused by (almost) anything else. They collaborate to repair or replace most types of vehicle damage. They do not, however, pay for damage to other vehicles or injuries. It's critical to understand the distinction and ensure you're adequately protected.

What is comprehensive insurance?

Comprehensive car insurance covers damages caused by something other than your car colliding with something else.

These are referred to as "acts of God" at times. For example, a "act of God" could include damage caused by a tree branch falling on your car. Because you have no control over when or why a tree branch falls on your car, this type of accident is covered by your comprehensive insurance.

Comprehensive coverage also pays for theft. If your car is stolen, comprehensive insurance will cover the cost of replacing it or repairing any damage if it is recovered.

• Types of damages covered under comprehensive auto insurance

• • Natural disasters, including storms, tornadoes, hurricanes, earthquakes and hailstorms
  • Explosions, fires, and civil unrest
  • Theft and vandalism
  • Impacts with animals, such as a deer, cause damage.
  • Windows or windshield that have been broken or shattered
  • Falling objects
  • Terrorist acts

Comprehensive insurance is usually subject to a deductible. This is the amount you must pay before your insurance coverage kicks in. Let's say you have a $500 deductible. If your car is damaged in a hailstorm and the repair costs $900, you are responsible for $500 and your insurer will cover the remaining $400.

What are the benefits of comprehensive coverage?

The main advantage of comprehensive coverage is that it can provide peace of mind while you are not in your vehicle. If your car is severely damaged or stolen, having comprehensive coverage ensures that you will be compensated.

However, because of your deductible, comprehensive coverage is usually ineffective for minor damage, such as a cracked bumper or minor vandalism. For example, if a vandal steals your car and the repair bill is $600, your comprehensive policy with a $1,000 deductible will not cover any of the costs.

What is collision insurance?

Collision coverage pays for damage to your vehicle as a result of a collision.

This includes a collision with another vehicle as well as a single-vehicle crash, such as slipping on ice and collapsing into a tree.

• Types of damage covered under collision auto insurance

• • You crash into another car, or another car crashes into you while you're parked.
  • You drive into a stationary object, such as a tree, streetlight or pole.
  • You collide with a ditch or a pothole.
  • Your vehicle flips over.
  • If you don't have uninsured motorist coverage, it's a hit-and-run.

Like comprehensive insurance, collision coverage has a deductible: the amount you must pay before your insurance will cover additional losses. When you purchase your policy, you will specify the amount. A higher deductible leads to lower monthly premiums.

What are the benefits of collision insurance?

The main advantages of collision insurance are that you will not have to worry about high repair costs following an accident, whether you are unable to afford repair costs or simply value peace of mind.

Furthermore, if you have collision insurance, you can usually begin the repair process very quickly after a collision. If you expect the other driver's liability coverage to cover the damage, you may have to wait for the insurance companies to determine who was at fault. If you file a collision claim and it is later determined that the other driver's liability coverage should pay, you will usually be automatically reimbursed.

Another advantage is that you only have to deal with your own insurance company, rather than another insurer who has less incentive to pay your claim. In most cases, collision insurance can be applied to a rental car, saving you from having to purchase rental car insurance.

When should you drop comprehensive and collision insurance?

While there is no perfect formula or rule for when you should drop comprehensive and collision insurance, you should generally drop them once the value of your car and replacement parts approaches the cost of your premiums and deductible.

For example, if your comprehensive and collision insurance costs $400 per year and your deductible is $600, you could save money by canceling them if your car is worth $1,000 or less.

What is the difference between collision vs. comprehensive?

The primary distinction between collision and comprehensive coverage is the driver's ability to control the car accident.

• Collision insurance typically covers events that are within a driver's control, such as when another vehicle collides with your vehicle.
• Comprehensive coverage is typically limited to "acts of God or nature," which are typically beyond your control while driving. These can include a startled deer, a heavy hailstorm, or a carjacking.

To demonstrate the distinctions between collision and comprehensive coverage, consider the aftermath of a hurricane. Consider two events that could have occurred during the storm:

1. A large tree branch has fallen on your car, or
2. You swerved to avoid a falling tree branch and crashed into one.

In the first case, you had no say over when or why a tree branch fell on your car. This type of accident would be covered by your comprehensive policy. In the second case, you were driving the car and swerved into a tree, resulting in a collision. As a result, collision insurance covers the damages.

Events like the hypothetical ones mentioned above highlight the importance of distinguishing between the two types of coverage.

Do you need collision and comprehensive insurance?

Collision and comprehensive insurance ensure that you are not liable for any costly car damage caused by a collision or other incident, so we recommend that most drivers have both.

You may be required to have collision and comprehensive insurance if you have a lease or loan on your car. Your lender wants to protect their investment by ensuring that there are enough funds to allow the driver to repair the vehicle if it is damaged.

• We also recommend that you have both comprehensive and collision coverage until you can afford a replacement vehicle. The precise point at which you should drop full coverage will depend on your financial situation, but we recommend considering it if the maximum payout (if your car is destroyed or stolen) is four to six times the cost of coverage. This usually happens when your car is:
  • 8–12 years old
  • Worth between $5,000 and $10,000

However, as a vehicle ages, collision and comprehensive coverages become less valuable. This is due to the fact that the value of an older car (and thus your highest possible payout after a crash) declines more than twice as fast as the cost of those coverages.

What if I only get comprehensive insurance?

Even if your car is not valuable, there is a case to be made for getting only comprehensive insurance and not collision insurance. Comprehensive insurance protects you against far more perils than collision insurance, including theft.

Regardless of how much your car is worth, having it stolen is a major inconvenience, especially if you rely on it every day to get to work. Even if your car was only worth $2,000 at the time of the theft and your insurer only gave you $1,500, that money would go a long way toward purchasing a new vehicle.

As we'll see later, comprehensive insurance is typically quoted at no more than $200 per year, so a $1,500 reimbursement would make the coverage worthwhile.

However, only 3% of drivers with comprehensive insurance file a claim in a given year, so keep that in mind when deciding whether or not to add it to your policy.

How much does collision and comprehensive coverage cost?

Collision coverage costs $1,969 per year for ten of America's most popular vehicles, while comprehensive coverage costs $164 for new vehicles.

In general, collision coverage is comparable to liability coverage, while comprehensive coverage is about a tenth the price of liability protection.

Car insurance rates can be reduced by comparing quotes from various insurance companies.

Cost of liability, collision and comprehensive coverages

To determine the average cost of comprehensive and collision coverages, we obtained quotes from four different insurance companies for liability-only, liability plus comprehensive, and full-coverage policies for ten of America's best-selling vehicles for a 30-year-old male from New York.

How many drivers have comprehensive insurance?

Comprehensive insurance is carried by 77 percent of drivers, but the percentage varies by state. Include comprehensive insurance on your policy if you live in an area with severe weather or high crime rates, as it protects your vehicle from off-road perils like natural disasters or theft.

States with the largest percent of drivers with comprehensive coverage

Comprehensive coverage, which covers damage to your car from tornadoes, hurricanes, tropical storms, flooding, and Nor'easters, is especially beneficial to drivers in coastal states.

States with the lowest percent of drivers with comprehensive coverage

You might believe that inland states are less vulnerable to storms such as hurricanes and earthquakes. However, tornadoes are extremely common in Oklahoma, and Arkansas is vulnerable to severe weather, including heavy storms. Wildfires are also a threat in New Mexico, Wyoming, and Montana.

California, Texas, and Louisiana are among the states most vulnerable to hurricanes and other natural disasters. However, when compared to the rest of the country, these states have a surprisingly low share of drivers with comprehensive coverage, averaging 72% across all three states.

Number of drivers with comprehensive coverage by state

Despite the fact that many states have a plethora of risks — hurricanes, flooding, thunderstorms, and fires — roughly one-fourth of drivers have chosen to forego comprehensive insurance. If you own a valuable car and live in an area prone to natural disasters, consider purchasing comprehensive insurance to protect against unforeseen risks of car damage.

Frequently asked questions

What is collision insurance?

Collision insurance is a type of coverage that pays for damage to your own vehicle caused by an accident. Collision insurance will pay out even if you caused the accident. Anything else, such as damage to someone else's car or medical bills, is not covered by collision.

What is comprehensive insurance?

Comprehensive coverage pays to repair damage to your car caused by events other than a collision. For example, comprehensive coverage would cover vandalism or hail damage. Comprehensive insurance also includes theft protection.

Do I need collision and comprehensive coverages?

Because collision and comprehensive insurance are not required by law, you do not need to purchase them in order to register your vehicle. Many car financing companies, however, require them, so you may need them to qualify for a lease or loan. We also recommend both coverages if your car is worth more than $3,000, is less than 10 years old, or if you would be unable to afford a new car if your current one were destroyed.

How much is collision coverage and comprehensive coverage?

The cost of collision and comprehensive insurance depends on the car you drive, your deductible, and your driving history, but in general, collision is about the same as a liability-only policy, while comprehensive insurance is about 10% more expensive. So, if a liability-only policy costs $100 per month, adding just collision raises the total cost to $200, and adding comprehensive raises the total cost to $210.