Comprehensive vs. collision coverage comparison
Even if you’re not very familiar with car insurance, you may have heard of collision coverage and comprehensive coverage. These coverage types offer physical protection for your vehicle.
Comprehensive vs. collision coverage — table of contents:
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:
COMPARISON: COLLISION VS. COMPREHENSIVE CAR INSURANCE
|Colliding with a fixed object||Colliding with an animal|
|Weather-related collision||Weather-related damage (flood or hail damage)|
These coverages may be paired with liability insurance coverage, which provides protection for damage you do to others (bodily injury) or their property (property damage).
Do I need both comprehensive and collision coverage?
Collision claims are more common than comprehensive claims. But it's difficult to find an insurance policy that includes only collision coverage, bypassing comprehensive coverage. You might, however, be able to set different deductibles for collision coverage and comprehensive insurance coverage.
A deductible is what you pay in the event you file a collision or comprehensive claim. The remainder is covered by your insurance company.
Do you need comprehensive or collision coverage?
The only insurance coverage drivers are required to maintain is liability insurance (sometimes uninsured motorist or personal injury protection as well, depending on location). If you’re leasing or financing a vehicle, you might be required to insure the vehicle with both comprehensive and collision coverage.
Even if you own the vehicle outright, you might want this coverage. If you’re planning on selling your vehicle in the future — or using it as collateral for loan — you should make sure the vehicle is protected to retain its value.
One of the primary differences between comprehensive and collision coverage is the difference in premium costs resulting from a claim. A collision claim is often seen as an "at-fault accident," leading to substantial insurance rate increases moving forward. A comprehensive claim, on the other hand, is often seen as outside the control of the driver and doesn’t impact premiums much, if at all.
COMPREHENSIVE VS. COLLISION CLAIMS — AVERAGE ANNUAL RATE INCREASES
|Collision Claim||Comprehensive Claim|
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 INSURANCE COSTS AT POPULAR DEDUCTIBLE LEVELS
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