So what's the difference between collision and comprehensive car insurance, and why is that important to me as a driver? These are two often misunderstood terms, but they have grand implications for coverage when it comes to getting reimbursed for damages from auto insurance. The protection of your vehicle ultimately depends on the type of accidents you get into, and what you'll get reimbursed for. Together with liability coverage, these are the two of the three most common types of auto insurance, and tend to work hand-in-hand to repair or replace most of the damages to your car, so it's important to know the difference, and make sure you're adequately covered.
Collision car insurance refers to protection for your car when it is involved in a crash with another vehicle or a stationary object. Most car crashes and auto accidents fall under this kind of insurance policy. The types of damages include crashing into another vehicle, another vehicle colliding with yours, or ramming into a streetlight, pole, or some other stationary object. It'll cover the cost of repairs or replacements to your own car (liability coverage and insurance takes care of damages to other people's property).
Comprehensive car insurance is usually overshadowed by its better known cousin, collision insurance, but it's just as important. Otherwise known as "other than collision" or "comprehensive coverage", the phrase is a bit of a misnomer. It actually doesn't give you complete coverage, contrary to what its name might indicate. Comprehensive car insurance really just covers damages to your vehicle not caused by a collision, and car owners can be surprised by how much this can encompass. Read below for examples of damages, and an evaluation of whether you need comprehensive insurance for your vehicle.
The key difference in collision vs. comprehensive coverage is to a certain extent the element of the car driver's control. Collision insurance will typically cover events within a motorist's control, or when another vehicle collides with your car. Comprehensive coverage generally falls under "acts of God or nature", that are typically out of your control when driving - a spooked deer, a heavy hailstorm, a carjacking, etc. Let's take an example of Superstorm Sandy, which ravaged portions of the East Coast in October of 2012, to illustrate the differences of collision vs. comprehensive coverage. You can easily imagine the type of devastation to cars, among other things, that occurred during the week of Superstorm Sandy. Let's take two unfortunate but likely events: the damage from a heavy tree branch falling on your car, and crashing into a tree when swerving to avoid a falling tree trunk. Generally speaking, because you as a car driver have no control over when or why a tree branch would fall on your car, this kind of accident would likely get reimbursed under your comprehensive policy. In the second situation, collision damage would pay for repairs to your car. Even though the primary and intervening cause was a falling tree part, the ultimate destruction to your car came from you driving a car into a stationary object. Regardless of which event hypothetically occurred to you, you can see why telling collision vs. comprehensive coverage apart can matter.
Below are a couple examples of accidents and mishaps other than fender-benders:
- Natural disasters: storms, tornadoes, hurricanes, earthquakes, hailstorms
- Fire, civil commotions, explosions
- Vandalism and theft
- Damage from impacts with animals (deer, etc.); note: a crash from swerving to avoid animals will likely fall under collision
- Broken / shattered windows and windshield
- Falling objects
- Acts of God
The amount of misfortune that can happen to your car can be quite surprising! We take the normal functioning and operation of our car for granted. Outside of keeping normal wear, tear, and routine maintenance or repairs in mind, the other major precaution is to beware crashing into other cars or pedestrians. Fortunately, a lot of these events are within our control, and those of our other fellow drivers. Unfortunately, there are natural and climate-related disasters, or unexpected incidents such as mobs, or nuclear war that can randomly but surely total your car. Hopefully, you have some measure of comprehensive coverage to soften the blow.
While policies typically have vague language around this, acts of terrorism are generally insured by the comprehensive portion of your policy. For example, claims for repairs to your car, or even a replacement, that was caused by an act of terror can only be made if you have comprehensive coverage. For life’s unknowns, comprehensive insurance is certainly important to have in your policy.
Is Comprehensive Car Insurance Worth It? Do I Need Comprehensive Coverage?
So does having a comprehensive policy make sense for you and your faithful car? It depends on several factors.
Does your state or auto financing loan require you to have it? Then easy answer: yes.
How old is your car?
Generally speaking, your policy will reimburse you on the current cash value of your car, and not the original value. We all know that cars depreciate in value rather rapidly. So if your car is a bit older and has less market value, then it makes less sense to get a policy, to go for a high-deductible policy, or to pay additional premiums that may wind up costing more than your car is worth
If your car is new, you should consider getting comprehensive car insurance.
What Do Collision and Comprehensive Coverage Cost?
To give you an indication of the added cost in purchasing comprehensive and/or collision coverage we looked at annual insurance prices for a 40 year old male across four different insurance companies and ten vehicles (the ten best selling automobiles in the US). Below we look at the range of different rates you could pay from basic liability to policy plans with comprehensive and collision coverage. Collision typically costs more than comprehensive, although some companies require you to carry both if you choose one of them. Comparing quotes across at least three companies can get you lower car insurance rates.
|Vehicles||Basic Liability||With Comprehensive||With Comprehensive and Collision|
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