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 exactly is comprehensive coverage?
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.
Theft is also covered under comprehensive coverage. If your car is stolen, comprehensive insurance will cover the cost of replacing it or repairing any damage if it is recovered.
Damage types covered by comprehensive auto insurance
- Storms, tornadoes, hurricanes, earthquakes, and hailstorms are examples of natural disasters.
- 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
- Objects that fall
- Terrorist acts
A deductible is usually required for comprehensive insurance. 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 advantages of having 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 exactly 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.
Damage types covered by collision auto insurance
- You collide with another car, or another car collides with you while you’re parked.
- You collide with a stationary object like 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.
Collision coverage, like comprehensive insurance, 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 advantages of collision coverage?
The main advantage of collision insurance is that you will not have to pay for high repair costs after an accident, which is advantageous if you are unable to afford repair costs or simply value peace of mind.
Collision insurance will also pay for car damage if you’re in a crash but can’t find the other driver — whether it’s a hit-and-run or if the other driver simply stops responding to your calls after the crash.
If you have collision insurance, you can usually start the repair process right away.
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 deal with your own insurance company, rather than another insurer who has a vested interest in paying your claim. In most cases, collision insurance can be applied to a rental car, saving you from having to purchase rental car insurance.
When is it time to drop comprehensive and collision coverage?
While there is no perfect formula or rule for when to drop comprehensive and collision insurance, in general, you should drop them when the value of your car and its 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 distinction between collision and comprehensive insurance?
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:
- A large tree branch has fallen on your car, or
- 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 require collision and comprehensive coverage?
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 price of those newer vehicles.
What if I only get full coverage 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 will see further below, comprehensive insurance is typically quoted at no more than $200 per year, so a $1,500 reimbursement would be appropriate make the coverage valuable.
However, only 3% of comprehensive insurance policyholders file a claim in a given year, so keep that in mind when deciding whether or not to add that coverage to your policy.
What is the cost of collision and comprehensive coverage?
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.
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 full coverage 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.
Commonly Asked Questions
What exactly 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 exactly is comprehensive coverage?
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 require collision and comprehensive insurance?
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 ten years old, or if you would be unable to afford a new car if your current one were destroyed.
How much does collision and comprehensive coverage cost?
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 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.
We collected rates for four coverage profiles in New York state to better understand how adding collision and comprehensive coverage affects car insurance rates:
- Only liability
- Comprehensiveness and liability
- Collision and liability
- Complete coverage (liability, collision and comprehensive)
For each coverage profile, we gathered sample rates from four major insurers for ten of the country’s best-selling vehicles. All sample quotes are for a 30-year-old man from New York with no recent incidents.