Collision and comprehensive insurance are two optional types of auto insurance where your insurer pays for repairs to your vehicle. Together with liability coverage, comprehensive and collision are three of the most common types of auto insurance coverages that work hand-in-hand to repair or replace most of the damages to your car. It's important to know the difference, and make sure you're adequately covered.
What is Comprehensive Insurance?
Comprehensive car insurance covers damages from "acts of God," "acts of nature," or anything not caused by a car driving into something else. Common events include damage from a heavy tree branch falling on your car. Since you have no control over when or why a tree branch would fall on your car, this kind of accident is an "act of God," and would be covered under your comprehensive policy.
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 or shattered windows and windshield
- Falling objects
- Acts of Terrorism
- A hit-and-run, if you can't use uninsured motorist coverage
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.
What is Collision Insurance?
Collision car insurance refers to protection for your car when it is involved in a crash with another vehicle or a stationary object. Whether your vehicle is involved in a crash with another vehicle or rammed into a fixed structure, you can rely on collision insurance to offer you coverage. Most car crashes and auto accidents fall under this kind of insurance policy. The following list is a few examples of crashes that would be covered by collision insurance:
- You crash into another car, or another car crashes into you while you're parked
- You drive into a stationary object, such as a tree, streetlight, or pole
- You crash into a ditch or a pothole
- Your car flips over
The main benefit of collision insurance is that you can file a claim and see reimbursement regardless of whose fault the accident was. Collision claims usually get processed faster than property damage claims because the insurance company does not have to spend time investigating who was at-fault. You would also be dealing with your own insurance company, rather than another insurer with less incentive to pay for your claim. Collision insurance can also be used toward your rental car in most cases, which can spare you from having to buy rental car insurance.
The Difference between Comprehensive and Collision Insurance
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 as an example Superstorm Sandy to illustrate the differences between collision and comprehensive. Within that storm, there are two events that could happen: 1) a heavy tree branch falls on your car, and 2) you swerve to avoid a falling tree branch and wind up crashing into a tree. In the first event, since you had no control over when or why a tree branch would fall on your car, this kind of accident would get reimbursed under your comprehensive policy. In the second situation, you were driving the car and ultimately swerved into the tree, so it is a collision, and thus collision insurance pays for the damages. Regardless of which event hypothetically occurred to you, you can see why telling collision vs. comprehensive coverage apart can matter.
Do You Need Collision and Comprehensive Insurance?
Collision and comprehensive insurance ensure you won't be on the hook for any costly car damage, so for the most part we recommend most drivers have both. Even if you have property damage liability, it is unhelpful because it doesn't pay for your car's repairs. Get both coverages if:
- You lease or finance your car
- Your car is less than 10 years of age
- Your car is worth more than $3,000
If you lease or finance your car, you may actually be required to have collision and comprehensive insurance. Your leasing agent will want to protect their investment, and ensure there is a way for drivers to repair their vehicles.
If your car is worth more than $3,000 and/or is less than 10 years old, we'd suggest collision and comprehensive too. Our drivers typically can buy comprehensive and collision insurance for an average $600 to $700 per year (though it can be significantly more depending on your car), so you would spend $3,000 to $3,500 in premiums over five years. If your car is worth less than $3,000 currently, you will have spent more on insurance than any value you'd get from the car. You can fetch the value of your car from sites like kbb.com and edmunds. Once you have both values figured out you can determine whether collision insurance will be worth it.
Collision claims are usually a bit higher than comprehensive ones according to the III, but both are above $1,000 on average. In 2015, about 6% of drivers with collision insurance filed a claim, that was on average worth $3,350, while 2.73% filed a comprehensive claim worth $1,671.
Getting Just Comprehensive Insurance
There is a case to be made for getting just comprehensive and not collision insurance--even if your car is not valuable. Comprehensive covers you for a lot more than collision and perhaps most importantly for theft. Even if your car is cheap, if it is stolen that would be a major inconvenience. Even if your car is only worth $2,000 at the time of the theft, and your insurer gives you only $1,500, that would go a long way in buying yourself a new vehicle. As we discuss more below, comprehensive insurance is generally no more than $200 per year, so a $1,500 reimbursement would still make the coverage valuable.
How Much Do Collision and Comprehensive Coverage Cost?
To calculate the added cost in purchasing comprehensive and/or collision coverage we looked at annual insurance quotes for a 30 year old male from New York across four different insurance companies and the ten best-sellingvehicles in the US. We look at the range of 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.
|Car Type||Basic Liability||With Comprehensive||With Comprehensive and Collision||Yearly Rate Difference|