August 6, 2019

Comprehensive vs Collision

Read more about Car Insurance

Collision and comprehensive coverages are two important parts of an auto insurance policy. But what are they exactly? And should you have them in your policy? Keep reading for the answers.

Collision and comprehensive protect against damages to your automobile. These are separate from liability coverage, which handles damages or injuries related to other people.

Read on to learn how collision and comprehensive coverages differ.

Collision Coverage

Collision covers damages to your own vehicle after hitting another object, like a vehicle, telephone pole, mailbox, tree, house, or building.

The coverage is more expensive than comprehensive for two reasons:

  • Collisions happen more frequently than comprehensive losses, such as a fire.

  • It is more expensive to repair or replace cars after a collision loss.

Collision can help you in several situations:

Coverage in an at-fault accident
If you are found at fault in an accident, you can file the claim under your own policy and get paid for the damages to your vehicle. The claim would be subject to your deductible, which can be anywhere from $250.00–$2,000.00.

Coverage in a not-at-fault accident
If you are not at fault, you can easily file a claim for your vehicle's damage under the other party's insurance. However, in some cases, it may be difficult dealing with the other party's insurance company.

Your collision coverage will pay to fix your vehicle, subject to your collision deductible. Your insurance company will then try to collect the money from the other party's insurance. While it can be a long process, they will most likely reimburse your deductible.

Coverage in a hit-and-run
Your collision coverage will pay for damage to your vehicle. However, you would still be subject to your collision deductible. The same applies in an accident when the other driver doesn't have any insurance.

In most cases, collision is an optional coverage. However, if you lease or finance your vehicle, you will likely be required to carry both comprehensive and collision.

Comprehensive Coverage

Comprehensive Coverage, also known as "other than collision," will cover your car for physical damage that is caused by an act of nature. In other words, comprehensive covers you for damage over which you have no control.

Covered losses include:

  • Fire
  • Theft
  • Wind
  • Hail
  • Falling objects (such as a tree or rock)
  • Hitting an animal
  • Rodents chewing on wires

Exclusions may include:

  • Acts of war
  • Governmental actions
  • Wear and tear

Car insurance is NOT a warranty. It is not designed to fix your car when it breaks down. Insurance companies expect you to take care of your car by performing routine maintenance when needed.

This can be important in some claims, such as hitting a pothole. If you have old tires that should've been replaced years ago, the insurance company could deny the claim, since the root cause of the accident was wear and tear.

Do I Need Full Coverage?

Full coverage means carrying both collision and comprehensive on your auto insurance policy.

You should consider purchasing full coverage if:

  • You finance or lease your vehicle
    Finance and leasing companies require full coverage, with a maximum deductible of $1,000.00. This is done to ensure that most of the loan/lease term balance is paid in the event of a total loss.

    What is GAP coverage?
    Your automobile may depreciate in value faster than you can pay down your loan. In the event that your car is totaled, this could mean you owe more than the amount you are reimbursed for the loss through insurance.

    GAP covers the difference between what the insurance company will pay (depreciated value) in the event of a total loss and the remaining balance of your loan. This can be purchased through your current auto policy or even through your financing company.

  • Your vehicle is less than 10 years old
    Vehicles less than 10 years old are typically worth more than $5,000. If you cannot afford the cost to buy a similar vehicle in the event of an accident, full coverage is necessary to have.

  • You have tickets and accidents on your record
    Individuals with existing accidents or driving violations on their record are more likely to get into accidents in the future. Having full coverage can ensure that you are properly covered in the event of future accidents.

  • You have teen drivers in your household
    Drivers between the ages of 16–19 are twice as likely to get into an accident than adults.

Consider comprehensive only if:

  • Your vehicle is worth less than $5,000
    If the repairs on a vehicle cost more than what it is worth, the insurance company will declare it a total loss. On older or less valuable vehicles, this is very probable.

    You will likely be paying more for collision coverage than what you would get in the event of a loss. Comprehensive-only still protects the car for things out of your control for a low cost.

Most companies offer comprehensive with full glass coverage. If something were to happen to the glass on the vehicle, the insurance company will fix or replace it with no out-of-pocket deductible for you. Even on an older vehicle, full glass coverage may be worthwhile.

How Much Do They Cost?

Collision and comprehensive are usually the most expensive parts of an auto insurance policy, with collision almost always costing the most.

Expect to pay:

  • $150–$500 per vehicle for collision

  • $100–$300 per vehicle for comprehensive with a $500 deductible

  • $500–$1,500 for full coverage, with collision costing approximately $1,000/year

Auto insurance costs differ for every individual. Factors that will determine your rates include:
  • Insurance company
  • Where you live
  • Age
  • Gender
  • Driving record
  • Type of vehicle
  • Deductible

Choosing Your Deductible
The deductible is the amount of "risk" that you are agreeing to take upon yourself. The insurance company will subtract that amount from its claims check to you.

Most companies have deductible options of $250, $500, $1,000, and $2,000. You can select and change your deductible at any time. The higher your deductible, the lower the cost for coverage will be.

You can have a different comprehensive deductible than you have for collision. Since collision is more expensive, choosing a $500 comp deductible and a $1,000 collision deductible can help save money.

Bottom Line

Comprehensive and collision are insurance coverages that protect your own vehicle in the event it sustains damages. Both are optional, unless you lease or finance a vehicle.

If you can't afford buying a similar car in the event of a total loss, consider adding full coverage to your policy.

More from CreditDonkey:

Collision Insurance

Average Cost of Car Insurance

Car Accident Statistics

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Car Insurance

How Much Car Insurance Do I Need

Auto insurance coverages can be confusing. Just what does each part of your policy cover? Read on for the answers, plus the amount of coverage you need to protect yourself.

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