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Protect your vehicle from expected and the unexpected.
Even if you’re not very familiar with car insurance, you’ve probably heard of collision or comprehensive coverage. But you might not know what it means. Before we go into deeper detail, all you have to know is that comprehensive and collision insurance coverage offer physical protection to your vehicle. The finer details of this, including how much it can cost and if you’re required to have it, are coming up next.
As we stated, comprehensive and collision only offer physical coverage to your vehicle. Where this physical coverage differs concerns what caused the damage to your vehicle. Collision coverage refers to damage caused by an actual collision — you collide with another car, a wall, or a pole. Comprehensive, on the other hand, refers to things that generally happen outside of your control. Things like theft, vandalism, and animal-related damage. Here’s a handy breakdown:
Comprehensive vs Collision Insurance Coverage
|Colliding with a fixed object||Colliding with an animal|
|Crashing your vehicle due to ice/weather related events||Weather-related damage (flood or hail damage)|
|Hit and Runs||Vandalism|
These coverages are usually paired with your liability insurance coverage, which provides protection against damage you do to other people (bodily injury) or their property (property damage).
Because of the nature of driving, there are more collision claims than comprehensive. Thus, you might want an insurance coverage policy that only includes collision protection. However, it’s very unlikely that you will be able to receive that. You might, however, be able to have different deductibles for your collision versus comprehensive insurance coverage. Your deductible is what you pay in the event you file a collision or comprehensive claim. The remainder is covered by your insurance company. This would vary by company, however.
The only insurance coverage that you’re required to have by law is your liability insurance (sometimes uninsured motorist or personal injury protection as well if your state requires). However, if you’re leasing or financing a vehicle, you’re more than likely required to insure the vehicle with comprehensive and collision coverage.
Even if you own the vehicle outright, you still might want this coverage. If you’re planning on selling your vehicle in the future or using it as collateral for loan, you’re going to want to make sure the vehicle is protected to ensure it’s value.
While we stated the major difference between comprehensive and collision, there’s another aspect to consider: how using them affects your car insurance coverage premium.
This is one of the bigger differences between comprehensive and collision coverage. Because of what it is used to cover against, a collision claim is often seen as an "at-fault accident". Meaning, it will raise your rate. A comprehensive claim, on the other hand, is often seen as outside the control of the driver and thus usually doesn’t affect your premium as much.
Comprehensive vs Collision Claims: Annual Rate Increase
|Collision Claim||Comprehensive Claim|
As you can see, the difference between a collision claim and a comprehensive claim is about $589 a year.
On average, your comprehensive and collision coverage takes up about half of your insurance coverage premium. You can save some premium by raising your deductibles, as your deductibles are inversely related to your premium.
Average Annual Cost of Insurance Coverage
|Coverage Level||Average Annual Premium|
Comprehensive and collision coverage are your two best and most common options for protection to your vehicle. If you’re looking for more information regarding comprehensive and collision coverage or insurance in general, see our additional articles.