Comprehensive Vs Collision Insurance: What's The Difference?

Protecting your car is essential, but with many insurance options available, it can be challenging to choose the right coverage.

Collision and comprehensive insurance are two optional types of car insurance. While they aren’t legally required, they can be useful if your car is damaged. Collision insurance helps cover repair costs if you are involved in an accident, while comprehensive insurance covers other types of damage, such as theft, vandalism, or weather-related incidents.

Together, these coverages can address various types of damage to your vehicle, but they do not cover damages to other vehicles or any injuries. Make sure you have the coverage that meets your needs.

After a hurricane, you might be facing different types of damage to your car. For example, if a tree branch fell onto your car, that’s an unpredictable event, so comprehensive coverage would typically handle the damages.

However, if you swerved to avoid a branch and ended up hitting a tree, that would be classified as a collision, meaning your collision insurance would cover the repair costs.

Understanding the difference between collision and comprehensive coverage helps ensure you’re prepared for various unexpected situations.

Examples of Situations in which You Could File a Collision Claim:

• You struck a post after swerving to miss a squirrel.
• Someone hits your car and then leaves.
• A guardrail is hit when your car slips on ice.

Examples of Situations in which You Could File a Comprehensive Claim:

• Your car suffered damage from a garage fire.
• Hail storm damage to your car.
• You run over a deer and dent your fender.
• Your car is stolen by a thief and is never found.

What’s A Deductible In Collision And Comprehensive?

When you purchase collision or comprehensive insurance, there’s typically a deductible, which is the amount you’re responsible for before your insurance coverage applies.

Deductibles often range from $250 to $1,000 or more. For example, if you have a $500 deductible and an accident results in $1,800 in repairs, your insurance would cover $1,300, while you pay the initial $500.

Some auto insurance companies offer “diminishing deductibles” as a reward for safe driving. With this feature, your deductible gradually decreases if you avoid filing specific claims over time.

The Maximum Insurance Payout For Collision And Comprehensive?

If you’re in an accident that completely wrecks your car, your collision or comprehensive insurance will reimburse you up to your car’s value just before the accident, minus your deductible.

A car is considered “totaled” if it either can’t be safely repaired or if the repair costs exceed its value. In many states, a vehicle is declared a total loss if repair costs reach a certain percentage, often around 75% of the car’s value.

This can apply even to newer cars, as the high cost of repairing advanced technology can quickly push repair costs over the total-loss threshold.

What Is Comprehensive Insurance?

Comprehensive car insurance covers damage that isn’t caused by driving or collisions. Often referred to as “acts of God,” it includes events beyond your control. For instance, if a tree branch falls on your car, comprehensive insurance would cover the damage.

Additionally, if your car is stolen, comprehensive coverage will help pay for a replacement or cover repair costs if it’s recovered.

What Are The Benefits Of Comprehensive Coverage?

If you’re concerned about theft or major damage to your car, comprehensive coverage can provide peace of mind, letting you go about your day without the worry of unexpected, large repair costs.

However, it’s important to remember that comprehensive coverage doesn’t apply to minor damage, like scratches or small dents. You would need to cover those costs yourself unless they exceed your deductible. For example, if someone keys your car and the repair costs $500, your comprehensive policy would only cover it if your deductible is less than $500.

What Is Collision Insurance?

Collision coverage helps cover repair costs if you’re involved in a crash. So, if you find yourself in an accident, take a deep breath, collision insurance can help manage the expenses.

Types of Damage Covered by Collision Insurance:

• Your car collides with another vehicle, either while parked or driving.
• You hit a stationary object, like a pole or tree, while driving.
• You crash into a ditch or pothole.
• Your vehicle rolls over.
• You experience a hit-and-run incident and can’t rely on uninsured motorist insurance.

This coverage helps with various situations where your vehicle is damaged in a collision, providing valuable protection.

What Are The Benefits Of Collision Insurance?

The main advantage of collision insurance is that it acts as a financial safety net. If you’re in an accident and your car needs repairs, collision coverage will cover the costs, helping you avoid significant out-of-pocket expenses. This can be especially valuable if you don’t have extra cash set aside or simply want added peace of mind.

Collision insurance also provides protection in situations like hit-and-runs or if the other driver is unresponsive after an accident. You can start repairs immediately without waiting for insurance companies to determine fault. If it’s later found that the other driver’s insurance should have covered the costs, you can be reimbursed.

A benefit of collision coverage is that you only need to work with your own insurance company, which is generally more responsive than a third-party insurer.

In many cases, collision insurance also applies to rental cars, sparing you the expense of additional rental car coverage. So, collision insurance is worth considering for both protecting your vehicle and managing repair costs efficiently.

Do I Need Collision And Comprehensive Insurance?

If you’re financing or leasing a car, you’ve likely been advised to get both collision and comprehensive coverage. This requirement protects your vehicle against significant risks, like theft or severe damage, while it’s still under loan.

Once your loan is paid off, you can decide whether to keep this coverage. If it’s no longer required, consider if you could afford to repair or replace your car out of pocket if something happened. If not, maintaining the coverage might be a good choice. However, remember that as your car ages and depreciates, the insurance payout also decreases.

For instance, if you drive a 2019 Toyota Corolla valued at around $4,200 and it’s totaled in a flood, with a $1,000 deductible, your insurance would pay out $3,200. Weighing the cost of ongoing coverage against the potential benefit is important, especially as the car’s value declines.

According to the latest statistics from the National Association of Insurance Commissioners, the average collision claim is $4,412.31, while the typical comprehensive claim is $1,359.04. This data can help you assess whether the coverage cost aligns with your risk level and financial situation.

What If Someone Else Damages My Car?

Collision insurance acts as a reliable safety net if you accidentally damage your car, like backing into a pole. It’s also beneficial if another driver hits you. In such cases, you have two options:

1. File a Claim Against the Other Driver’s Liability Insurance: If the accident wasn’t your fault, the other driver’s insurance should cover the repair costs.
2. File a Claim on Your Collision Insurance: This option can be appealing if you’d prefer not to deal with the other driver’s insurance or if you want the simplicity of going through your insurer. The only drawback is that you’ll need to pay your deductible, but you can be confident that your car will be repaired.

How Much Will Comprehensive And Collision Insurance Cost?

Yes, the value of your car does impact the cost of comprehensive and collision insurance. Insurers consider the potential cost of repairs or replacement if your car is totaled, which directly affects your premiums. Higher-value cars typically have higher premiums due to the greater financial risk to the insurer.

Here’s a sample table illustrating how auto insurance premiums may vary for different vehicles, including the costs for liability, comprehensive, and collision coverage:

This breakdown helps illustrate how vehicle type and value influence insurance costs across different coverage types.

Monthly Cost Of Comprehensive Coverage Vs. Collision Coverage

What Comprehensive And Collision Insurance Doesn’t Cover

While collision, comprehensive, and liability insurance provide broad coverage, there are certain things they won’t cover.

For example, if you’re injured in an accident, you may need to rely on the other driver’s liability insurance, your personal injury protection (PIP) or medical payments insurance, or even your health insurance to cover medical expenses.

Additionally, if personal belongings like a laptop or wallet are stolen from your car, your auto insurance won’t cover those items. Instead, you’d need to file a claim through your homeowners or renters insurance for that type of loss.

Factors To Consider Before Buying Comprehensive And Collision Insurance

Before you buy comprehensive and collision coverage, you should consider the following:

Your Financial Situation

Have you thought about what would happen if your car were unexpectedly damaged or totaled? Could you afford to repair or replace it? If not, you may want to consider adding collision and comprehensive coverage to protect yourself financially in case of unforeseen events.

The Worth of Your Car

It’s also smart to assess whether the cost of comprehensive or collision coverage exceeds 10% of your car’s value. Since these coverages only pay out the car’s market value at the time of a total loss, you may want to weigh the cost against the potential payout to see if they’re worth keeping.

Your Driving Habits

If you drive frequently or have a long daily commute, your risk of an accident is higher, making collision insurance more relevant for your needs.

Your Location

Living in an area with high rates of crime or natural risks like wildfires or floods may also warrant additional coverage. Even if you don’t drive often, these factors can increase the importance of comprehensive coverage to safeguard against potential risks.

How Many Drivers Have Comprehensive Insurance?

Although the percentage of drivers with comprehensive insurance varies across states, about 77% currently have this coverage.

If you live in an area prone to severe weather or with high crime rates, adding comprehensive insurance to your policy could be a wise choice. This coverage protects against non-collision risks, such as theft and natural disasters, making it a valuable consideration for added security.

States With The Highest Percentage Of Motorists That Have Full Coverage

Comprehensive coverage, which covers your automobile against damage caused by tornadoes, hurricanes, tropical storms, floods, and nor’easters, is especially advantageous for drivers in coastal areas.

Auto Insurance Spotlight: Stolen Vehicles

Do you know that a car is stolen every 36 seconds? That’s according to the latest National Insurance Crime Bureau (NICB) Hot Spots report. And even with COVID-19 happening, it didn’t stop vehicle thieves.

Vehicle Theft Rates By State

According to the Hot Spots survey, there are 100 car thefts for every 100,000 people. Ten states reported a decrease in car thefts (since 2019) despite an increase in thefts in the U.S.

These states include:

• Washington – 368.46
• Colorado – 502.12
• Oregon – 385.08
• Kansas – 325.28
• California – 475.24
• New Mexico 426.19
• Oklahoma – 371.28
• Missouri – 453.63
• Nevada – 365.84

Source: National Insurance Crime Bureau

One effective way to protect your car is by taking preventative steps. However, if the worst happens and your car is stolen, you can take comfort in knowing that the comprehensive coverage on your auto insurance policy will compensate you for its value.

The National Insurance Crime Bureau recommends keeping these four safety measures in mind:

Common Sense

Always lock your windows and doors, remove keys from the ignition, and park in well-lit areas.

Warning Devices

Consider installing car alarms and visible deterrents like steering wheel locks, brake locks, or column collars to discourage theft.

Immobilizing Devices

These devices prevent thieves from bypassing your car’s ignition system. Examples include smart keys, kill switches, wireless ignition authentication, and fuel pump or starter disablers.

Tracking Devices

Using GPS and wireless technology, these systems can alert you if your car is moved and help track its location.

By following these tips, you can reduce the risk of theft and enhance your car’s security.