While there are other optional auto insurance coverages, liability, comprehensive and collision are three of the most common. These coverages 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.
Collision and comprehensive are optional coverages but drivers may be able to maximize savings on car insurance by comparing quotes from several insurers.
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What is comprehensive insurance?
Comprehensive car insurance covers damages from an "act of God," or events that are not caused by a car driving into something else.
An "act of God" can include things like 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 would be covered under your comprehensive policy.
Types of damages covered under comprehensive auto insurance
Below are a couple examples of accidents and mishaps excluding fender-benders:
- Natural disasters: storms, tornadoes, hurricanes, earthquakes, hailstorms.
- Fire, civil commotions, explosions.
- Vandalism and theft.
- Damage from impacts with animals, such as a deer. Note: a crash from swerving to avoid animals will likely fall under collision.
- Broken or shattered windows and windshield.
- Falling objects.
- Acts of terrorism.
Policies typically use vague language when referring to acts of terrorism, but they are generally insured by the comprehensive portion of your policy. For example, if there is an act of terror and you need to make a claim on your car, that can only be made if you have comprehensive coverage. Since some circumstances are out of our control, comprehensive insurance is certainly important to have in your policy.
What is collision insurance?
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.
Types of damages covered under collision auto insurance
The following list includes 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
- A hit-and-run, if you can't use uninsured motorist coverage
What are the benefits of collision insurance?
While there are a couple of benefits of collision insurance, the main one is that you can file a claim and receive reimbursement regardless of who was at fault.
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.
Another benefit is that you only deal 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.
What is the difference between collision vs. comprehensive?
The key difference in collision vs. comprehensive coverage is the driver's control over the car accident.
- 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. These can include such events as a spooked deer, a heavy hailstorm or a carjacking.
Let's use the aftermath of Superstorm Sandy as an example to illustrate the differences between collision and comprehensive. Within that storm, let's consider two events that might have happened:
- A heavy tree branch fell on your car, or
- You swerved to avoid a falling tree branch and wound up crashing into a tree.
In the first event, 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, which makes it a collision and collision insurance, therefore, pays for the damages.
Events like the hypothetical ones stated above are why it's important to differentiate between the two types of coverage.
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 that most drivers have both. Even if you have property damage liability, it isn't helpful in this scenario because it doesn't pay for your car's repairs.
According to the Insurance Information Institute (III), 74% of drivers purchase collision coverage while 78% buy comprehensive coverage.
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 to ensure there are sufficient funds to allow the vehicle to be repaired by the driver.
We suggest you have both coverages if:
- Your car is less than 10 years of age
- Your car is worth more than $3,000
If your car is currently worth less than $3,000, you will have spent more on insurance than your car is worth.
Our analysis suggests drivers can buy comprehensive and collision insurance for an average of $600 to $700 per year (however, the cost may be higher for some cars), so you would spend $3,000 to $3,500 in premiums over five years. In comparison, the average collision and comparison claims are each over $1,000 in size, according to the III.
In exchange for paying premium fees, you are preventing yourself from spending out of pocket costs for claims that could be worth thousands. In 2018, about 6.11% of drivers with collision insurance filed a claim that was on average worth $3,547, while 3.02% filed a comprehensive claim that was worth $1,833.
You can obtain the estimated value of your car from sites like Kelley Blue Book and Edmunds. Once you have both the value and a quote for coverage, you can determine whether collision insurance will be worth it.
What if I only get 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 perils than does collision — including, and most importantly, against theft.
Regardless of the value of your car, having it stolen is a major inconvenience. Even if your car is worth only $2,000 at the time of the theft, and your insurer gives you $1,500, that sum would go a long way in buying yourself a new vehicle.
As we discuss in more detail below, comprehensive insurance is generally quoted at no more than $200 per year, so a $1,500 reimbursement would make the coverage valuable.
How much do collision and comprehensive coverage cost?
In the table below, we calculate the added cost in purchasing comprehensive and/or collision coverage by looking at annual insurance quotes for a 30-year-old male from New York across four different insurance companies, and the ten best-selling vehicles 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 rather than just one.
In the table below, you can see the average cost of adding comprehensive or collision coverage to your insurance plan across the ten best-selling vehicles.
|Car Type||Basic Liability||With Comprehensive||With Comprehensive and Collision||Yearly Rate Difference|