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October 28, 2021Difference Between Collision & Comprehensive Car Insurance?
What Is The Difference Between Collision & Comprehensive Car Insurance?
There are two types of vehicle insurance coverages: collision and comprehensive. They are both legally optional and cover the expense of automobile damage, but they do it in different ways.
Collision coverage pays for damage to your automobile caused by a collision, whereas comprehensive coverage covers for damage caused by (nearly) everything else.
They collaborate to repair or replace most forms of vehicle damage. They do not, however, compensate for damage to other cars or injuries. It's critical to understand the distinction and ensure you're appropriately protected.
What Exactly Is Full Coverage Insurance?
Comprehensive vehicle insurance covers losses caused by something other than your car colliding with something else.
These are referred to be "acts of God" at times. For example, an "act of God" may involve damage caused by a tree limb falling on your automobile. Because you have no influence over when or why a tree limb falls on your automobile, this type of accident is covered by your comprehensive insurance.
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•Storms, tornadoes, hurricanes, earthquakes, and hailstorms are examples of natural catastrophes.
•Explosions, fires, and civil commotion.
•Theft and vandalism
•Impacts with animals, such as a deer, cause damage.
•Windows that have been broken or shattered or a windshield that has been smashed.
•Objects that fall.
•Terrorist acts.
A deductible is generally required for comprehensive insurance.This is the amount you must pay before your insurance coverage kicks in. Let's suppose you have a $500 deductible. If your automobile 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 primary advantage of comprehensive coverage is that it may give peace of mind when you are away from your vehicle. If your automobile is seriously damaged or stolen, having comprehensive coverage guarantees that you will be compensated.
However, because of your deductible, comprehensive coverage isn't generally useful for little damage, such as a broken bumper or minor vandalism. For example, if a vandal steals your automobile and the repair bill is $600, your comprehensive coverage with a $1,000 deductible will not cover any of the charges.
What Exactly Is Collision Insurance?
Collision coverage covers for damage to your vehicle as a consequence of a collision.
This involves a collision with another car as well as a single-vehicle incident, such as slipping on ice and collapsing into a tree.
•You collide with another automobile, or another car collides with you when you're parked.
•You collide with a fixed item, such as a tree, streetlight, or pole.
•You collide with a ditch or a pothole.
•Your vehicle turns over.
•If you don't have uninsured motorist coverage, it's a hit-and-run.
Collision coverage, like comprehensive insurance, includes a deductible: the amount you must pay before your insurance will cover additional damages. When you purchase your coverage, you will specify the amount. A greater deductible leads to lower monthly premiums.
What Are The Advantages Of Collision Coverage?
The major advantages of collision insurance are that you will not have to worry about hefty repair expenses following an accident, whether you are unable to pay repair charges or simply desire peace of mind.
Furthermore, if you have collision insurance, you may usually begin the repair procedure fairly quickly following an accident. If you expect the other driver's liability coverage to compensate for the damage, you may have to wait for the insurance companies to establish who was to blame.
If you submit a collision claim and it is later found that the other driver's liability coverage should pay, you will usually be automatically repaid.
Another advantage is that you just have to deal with your own insurance carrier, rather than another insurer who has less motivation to settle your claim. In most circumstances, collision insurance may also be applied to a rental automobile, saving you from having to purchase rental car insurance.
When Should You Get Rid Of Your Comprehensive And Collision Coverage?
While there is no exact formula or guideline for when to remove comprehensive and collision insurance, in general, you should drop them whenever the worth of your automobile and its replacement components approaches the cost of your premiums and deductible.
For example, if your comprehensive and collision insurance is $400 per year and your deductible is $600, you may save money by eliminating them if your car is worth $1,000 or less.
What Is The Distinction Between Collision & Comprehensive Insurance?
The primary distinction between collision and comprehensive coverage is the driver's ability to control the automobile accident.
•Collision insurance generally covers occurrences that are within a driver's control, such as when another vehicle collides with your vehicle.
•Comprehensive coverage is often limited to "acts of God or nature," which are frequently beyond your control when driving. These can include anything like a startled animal, a strong hailstorm, or a carjacking.
To demonstrate the distinctions between collision and comprehensive coverage, consider the aftermath of a storm. Consider two scenarios that may have occurred during the storm:
•A large tree limb has fallen on your automobile, or
•You swerved to dodge a falling tree branch and ended up colliding with one.
In the first case, you had no say over when or why a tree limb fell on your automobile. This type of accident would be covered under your comprehensive coverage. In the second case, you were driving the automobile and swerved into a tree, resulting in an accident. As a result, collision insurance covers the damages.
Events like the hypothetical ones mentioned above highlight the need of distinguishing between the two forms of coverage.
Do You Require Collision & Comprehensive Coverage?
We typically recommend that most drivers get both collision and comprehensive insurance to guarantee that they are not on the hook for any costly automobile damage.
You may be obliged to get collision and comprehensive insurance if you have a lease or loan on your automobile. Your lender wants to safeguard their investment by ensuring that there is enough cash to allow the driver to repair the car if it is damaged.
However, as a vehicle matures, collision and comprehensive coverages become less valuable to you. While the rates of comprehensive and collision insurance fall over time as the value of your automobile declines, the lower premium does not always keep pace with the lower probable payment if the car is entirely wrecked, or totaled.
What If I Only Receive Full Coverage Insurance?
Even if your automobile is not valued, there is an argument to be made for having only comprehensive insurance and not collision insurance. Comprehensive insurance protects you against much more hazards than collision insurance, including theft.
Regardless matter how much your automobile is worth, having it stolen is a significant nuisance, especially if you rely on it every day to commute to work. Even if your automobile was only worth $2,000 at the time of the theft and your insurer only gave you $1,500, that figure would go a long way toward purchasing a new vehicle.
As we'll see later, comprehensive insurance is typically offered for no more than $200 per year, so a $1,500 reimbursement would make the policy worthwhile.
However, only 3% of drivers with comprehensive insurance file a claim in a given year, so keep that in mind when considering whether or not to add it to your policy.
What Is The Cost Of Collision And Comprehensive Coverage?
In our assessment of ten of America's most popular automobiles, we discovered that collision coverage for new vehicles costs an average of $1,969 per year and comprehensive coverage costs $164.
In general, the cost of collision coverage is equal to the cost of liability policy, whereas comprehensive coverage is roughly one-tenth the price of liability insurance.
See a detailed breakdown of the costs of the comprehensive, accident, and liability insurance for some of the most popular vehicles in the United States:
Car insurance premiums can be reduced by comparing quotes from at least three different firms.
Liability, collision, and comprehensive coverage costs
Vehicle |
Liability coverage |
Collision coverage |
Comprehensive coverage |
Total cost of full coverage |
| Toyota Camry | $1,986 | $1,939 | $185 | $4,110 |
| Honda Accord | $1,644 | $2,304 | $168 | $4,116 |
| Honda Civic | $1,662 | $2,029 | $131 | $3,822 |
| Nissan Altima | $1,704 | $2,043 | $177 | $3,924 |
| Toyota Corolla | $1,800 | $1,875 | $153 | $3,828 |
| Honda CR-V | $1,596 | $1,522 | $146 | $3,264 |
| Ford Escape | $1,668 | $1,622 | $118 | $3,408 |
| Ford F-150 | $1,704 | $1,569 | $189 | $3,462 |
| Chevrolet Silverado | $1,986 | $2,696 | $184 | $4,866 |
| Ram 1500 | $1,716 | $2,086 | $188 | $3,990 |
To determine the average cost of comprehensive and collision coverages, we obtained estimates from four different insurance companies for liability-only, liability plus comprehensive, and full-coverage plans for ten of America's best-selling automobiles for a 30-year-old man from New York.
Commonly Asked Questions
What Exactly Is Collision Insurance?
Collision insurance is a form of coverage that compensates for damage to your own vehicle caused by an accident. Collision insurance can payout even if you are at fault for the accident. Anything else, like damage to someone else's automobile or hospital costs, is not covered by collision.
What Exactly Is Full Coverage Insurance?
Comprehensive coverage pays to repair damage to your automobile that is not the result of a collision. For example, complete coverage would cover vandalism or hail damage. Comprehensive insurance also includes theft protection.
Is It Necessary For Me To Get Collision And Comprehensive Insurance?
Because collision and comprehensive insurance are not needed by law, you do not need to purchase them in order to register your vehicle. Many vehicle finance firms, however, need them, so you may need them to qualify for a lease or loan.
We also recommend both coverages if your automobile is worth more than $3,000, is less than 10 years old, or if you would be unable to purchase a new car if your current one were wrecked.
How Much Do Collision And Comprehensive Coverage Cost?
The cost of collision and comprehensive insurance varies depending on the automobile you drive, your deductible, and your driving history, but on average, collision is approximately the same as a liability-only policy, while comprehensive is around 10% more expensive. So, if liability-only insurance costs $100 per month, adding only collision raises the total cost to $200, and adding comprehensive raises the total cost to $210.