How are collision and comprehensive coverage different?

This is a good question, and I often get it while working my day job as an insurance broker (see What Is an Insurance Broker to learn more about what I do). Many people are confused about the difference between the two kinds of coverage because, most of the time, they are purchased together as “collision and comprehensive” coverage (also known as “own damage coverage” in some areas). Basically, this is all coverage that can be purchased on top of the standard liability insurance that protects you against third party liability an uninsured or underinsured motorists (for more on improving your liability coverage, see Who Needs Umbrella Insurance?).

While they’re often packaged together, they’re not exactly the same. The main difference is what they cover. Collision coverage provides protection against damage to your vehicle when you hit something (excluding animals). Comprehensive coverage, on the other hand, protects you if your vehicle is damaged by something other than a “collision” (as defined by the collision coverage mentioned above). Theft, for example, would be covered by comprehensive.

They do, however, share some similarities. Probably the most important one are the exclusions. Both collision and comprehensive coverage exclude:

• Warranty-type issues (mechanical breakdown or wear & tear)
• Freezing or explosion in the combustion chamber (except when due to collision)
• Vehicle contents (although equipment like seat covers of safety gear is covered)

To ensure clients have the most complete coverage, insurance brokers and agents will usually sell both collision and comprehensive coverage together (hence, the source of this confusion).