Collision vs. Comprehensive Coverage: An Expert Guide (2024)

Unlocking the secrets behind auto insurance coverage – Collision vs Comprehensive, our guide navigates the crucial differences and critical advantages. In the realm of safeguarding your vehicle, finding the right insurer is key. As we dissect the intricacies of these policies, discover which companies offer the most advantageous rates, tailored to diverse customer profiles. From coverage scopes to financial perks, our breakdown empowers you to make informed choices for optimal protection and savings.

Collision Coverage

Pros:

• Protection in Auto Accidents: Collision coverage provides financial protection for your vehicle’s damages in the event of an auto accident, regardless of fault.
• Lender Requirement: If you finance or lease your vehicle, collision coverage is often required by lenders, ensuring your investment is safeguarded.
• Peace of Mind: Knowing that collision coverage addresses damages from accidents can provide peace of mind, especially for new or valuable vehicles.

Cons:

• Cost: Adding collision coverage to your policy can significantly increase your monthly insurance rates, making it a more expensive option.
• Limited Scope: Collision coverage only applies to damages caused by accidents with other vehicles or objects; it does not cover non-collision events such as theft, fire, or natural disasters.

Comprehensive Coverage

Pros:

• Wide Range of Coverage: Comprehensive coverage protects against various non-collision events, including theft, vandalism, fire, and natural disasters.
• Lender Requirement: Similar to collision coverage, lenders may require comprehensive coverage for financed or leased vehicles.
• Total Loss Protection: In the case of a total loss, comprehensive coverage may provide a payout based on the actual cash value of the vehicle.

Cons:

• Cost: Like collision coverage, comprehensive insurance can significantly increase your monthly premiums, contributing to higher overall insurance costs.
• Not Mandatory: While lenders may require it, state laws don’t mandate comprehensive coverage, leaving it optional for some drivers.
• Exclusions: Comprehensive coverage may have limitations and exclusions, such as not covering personal belongings inside the vehicle.

The Verdict: Comprehensive Coverage Takes the Lead

After delving into the intricacies of collision and comprehensive coverage, it’s clear that each option has its merits and drawbacks. However, when scrutinizing rates, offerings, and overall utility, one emerges as the superior choice.

Rates and Offerings: While both collision and comprehensive coverage can hike up your monthly premiums, comprehensive coverage provides a broader scope of protection. It safeguards against a myriad of non-collision events, including theft, vandalism, fire, and natural disasters. The wide-ranging coverage offered by comprehensive insurance makes it a more comprehensive and versatile choice.

Total Loss Protection: In the unfortunate event of a total loss, comprehensive coverage stands out by potentially offering a payout based on the actual cash value of your vehicle. This feature provides an extra layer of financial security, especially in scenarios where the vehicle cannot be recovered. (For more information, read our “What is total loss Car Insurance coverage?“).

Flexibility in Claim Scenarios: Comprehensive coverage shines in versatility. From hailstorms to theft, it addresses a wide array of incidents beyond traditional auto accidents. Collision coverage, on the other hand, is more narrowly focused on damages caused by collisions with other vehicles or objects, limiting its applicability.

While cost remains a factor in the decision-making process, the broader coverage and additional benefits offered by comprehensive insurance outweigh the potential financial burden. The cons associated with comprehensive coverage, such as cost and non-mandatory status in some states, are comparatively less impactful when considering the comprehensive protection it provides.

What is the difference between comprehensive and collision insurance?

Collision and comprehensive auto insurance are optional types of car insurance coverage. State law won’t require it, but your lender may need it on your policy if you lease or finance your vehicle. 

These types of insurance policies go beyond the minimum liability limits in your state to extend coverage to your vehicle. While liability insurance pays for the other driver, both comprehensive and collision insurance pay for your vehicle’s damages after a covered event. 

They both cover different things in different ways, but they both exist to protect your car, specifically:

• Comprehensive coverage covers damages due to fire, hail, or flooding and running into a deer or wild animal. 
• Collision coverage protects and pays for your car from a collision with another vehicle where you were at fault, a stationary object, or against a hit-and-run driver who damaged your vehicle and fled the scene. (For more information, read our “Does my car insurance cover damage caused by a hit-and-run driver if I cannot identify them?“)
  

You might not need either of these policies if you have an older vehicle that costs more to repair after it depreciates. Consider the examples below to understand better when you might need comprehensive vs. collision insurance. Also, read our guide on the best collision coverage car insurance companies to get the cheapest rates.

Examples of When You Could Make a Comprehensive Claim

Comprehensive insurance is used to cover any event that isn’t an auto accident, including: 

• Hail or tornadoes
• Flood damage 
• Fire 
• Falling objects
• Explosions. 
• Collisions involving animals, like hitting a deer
• Riots
• Vandalism
• Theft

Read more:

• Does car insurance cover damage caused by a collision with an animal if I only have liability coverage?
• Does car insurance cover hail damage?
• Does my car insurance cover damage caused by a riot or civil unrest?

For instance, suppose you drove to the beach for a weekend getaway with friends. During your stay, heavy winds at the shore damage your vehicle. This is where a policy from the best comprehensive coverage car insurance companies would come in handy.

Likewise, you would file a comprehensive insurance claim if your vehicle was stolen. If the authorities cannot recover the vehicle, you will receive a payout for the actual cash value of your vehicle minus your comprehensive deductible. (For more information, read our “What is the difference between agreed value and actual cash value car insurance coverage?“). 

Examples of When You Could Make a Collision Claim

Auto accidents involving one or more vehicles are always collision insurance claims. It will cover any damage to your vehicle up to the policy limits, but you are responsible for paying a deductible. Collision auto insurance coverage pays for: 

• An accident you cause where your car is also damaged 
• If you strike a fence or pole and your car sustains damage
• If someone hits you and your car is damaged

For example, if you were to swerve to avoid hitting something or someone and collide with a tree or mailbox, you would have to file a claim under your collision policy. However, if you are struck by another driver, you can file a claim under their liability insurance policy.

How much do collision and comprehensive insurance costs?

If you currently only carry liability insurance, full coverage car insurance with comprehensive and collision protection will double your monthly insurance rates. Age, gender, and ZIP code also play a major role in how much you pay for car insurance. 

This table compares car insurance rates for both minimum and full coverage to give you an idea of what you’ll pay for collision and comprehensive insurance:

Average Monthly Car Insurance Rates for Collision, Comprehensive, and Full Coverage

Be aware that state and city-wide auto theft rates will impact the cost of comprehensive car insurance. 

According to the National Insurance Crime Bureau, vehicle theft rates by state increased by 11%, with more than 745,000 vehicles reported stolen to law enforcement in the past year. If you live in Washington, D.C., Colorado, Oregon, or California — the top regional areas for auto theft — you will be looking at higher car insurance rates.

Even if you’re trying to save money, skipping out on what’s known as full coverage might not be in your best interest when factoring for a total loss scenario. Remember that prices vary by insurer. 

Situations Collision and Comprehensive Insurance Won’t Cover

Although collision insurance and comprehensive insurance offer a wide range of protection, these policies still do not cover: 

• Damages you cause to others in an accident or collision. Liability insurance covers damages and injuries you cause in an at-fault accident.
• Physical injuries you suffer in a collision. You need personal injury protection (PIP), medical payments insurance, or health insurance to pay for your medical bills after an accident. You can file a claim with the other driver’s insurance if you’re not at fault.
• Personal items stolen out of a vehicle. Car insurance doesn’t cover stolen items, including tables, phones, or wallets. You will file a claim with your renters or homeowners insurance.

Comprehensive and collision car insurance only applies to your vehicle, and you will need to invest in other types of coverage to protect yourself, your passengers, and any personal belongings inside your car.

Does comprehensive and collision insurance cover rental cars?

When you drive a rental car, your existing collision and comprehensive auto insurance may already cover you, depending on your policy. You’ll have to purchase liability insurance from the rental car company if you already don’t have a personal auto policy.

Most of the time, your personal auto insurance policy and rental car insurance overlap. You won’t have to pay for extra coverage unless you’re driving a more expensive vehicle than the one listed on your policy.

Who pays if someone else hits my car?

If anybody hits your vehicle, whether moving or parked, you should call the police and share the other driver’s information. Drivers are legally required to carry an auto liability policy in most states to cover accident damages, and the at-fault driver will pay for hitting your car. Here’s what you need to know after a car accident.

However, if the person who hit you disputes that they are to blame, your insurance companies will determine fault. Your collision insurance might pay for damages if the other driver is uninsured or doesn’t carry enough coverage, but you might see your insurance rates rise for filing a claim. 

What’s a car insurance deductible on comprehensive and collision coverage?

The deductible is an agreed-upon amount you will be responsible for paying out of pocket to repair or replace your car before the insurance company pays the rest. Only collision and comprehensive car insurance have deductibles, which usually range between $250 and $1,000.

For instance, if you don’t have a personal history of filing very many insurance claims, you might set your deductible higher to keep your monthly insurance payments low since you’re a safe driver. So, you pick a $1,000 deductible and reap the long-term savings.

However, if you chose a lower deductible of $250, you would likely pay quite a bit more per month for the option to reduce your total repair costs in the event of a claim.

Case Studies: Illustrating Comprehensive and Collision Coverage

Case Study 1: Mary’s Comprehensive Claim

Mary owns a brand-new car that she purchased with a car loan. One night, a severe hailstorm damages her car, causing dents and cracks on the body. Mary files a claim under her comprehensive insurance policy to cover the damages caused by the weather-related event. The insurance company assesses the damage and pays for the repairs, minus the deductible.

Case Study 2: John’s Collision Claim

John is driving his car when another driver runs a red light and collides with his vehicle. The accident causes significant damage to John’s car. Since the other driver is at fault, John can file a claim under the other driver’s liability insurance policy.

However, if the other driver is uninsured or underinsured, John can rely on his collision insurance to cover the repair costs. John pays the deductible, and the insurance company takes care of the remaining expenses.

Case Study 3: Sarah’s Decision to Skip Collision Coverage

Sarah owns an older car that has significantly depreciated in value. She decides to save money on insurance premiums by not carrying collision coverage. One day, Sarah accidentally hits a tree while parking her car, causing damage to the front bumper. Since Sarah doesn’t have collision coverage, she is responsible for paying for the repairs out of pocket.

The Bottom Line: Are collision and comprehensive insurance a good idea?

Choosing to get full coverage auto insurance to include collision and comprehensive depends on various factors, from your current financial situation to the value of your car, and the geographic location where you drive and park it.

You might want to forego this insurance if you own a much older vehicle. Consider the actual cash value of the car and always factor in the price of replacement parts and repairs. If it costs more to repair than it’s worth, you can likely drop collision and comprehensive coverage to save money on car insurance.

However, consider what you have to lose if you don’t get these coverages. You should also think about your driving style, your car’s safety features, and your driving record. Insurance companies will charge you different rates based on these factors. Use our comparison tool below to find affordable collision and comprehensive car insurance quotes from local companies near you.