UPDATED: MAY 05, 2023 | 2 MIN READ
Car insurance is an important consideration for any driver, and it’s crucial to understand the different types of coverage available. Comprehensive vs. collision is something many people question. Which coverage do they need? Do they need one? Do they need both?
And it’s understandable because these are two of the most common types of auto insurance. While both protect your vehicle, they differ in the events they cover and their associated costs.
Understanding the differences between comprehensive and collision insurance is essential to making informed decisions about your coverage. In this article, we’ll explore the ins and outs of comprehensive and collision insurance, and provide you with the information you need to make the best decision for your unique situation.
Comprehensive vs. collision: How do you decide?
When people see “comprehensive vs. collision” they often think they have an either-or situation. But that’s not the case.
You can carry comprehensive and collision coverage together. Or you can carry comprehensive coverage only. However, you can’t carry collision coverage without comprehensive. Read on to learn the difference between the two and the pros and cons of each.
Comprehensive insurance
Comprehensive insurance coverage is an optional type of auto insurance that covers damage to your vehicle caused by events that are out of your control. On average, comprehensive insurance coverage costs about $172 per year.
According to the National Association of Insurance Commissioners (NAIC), people in California pay the least at around $97 per year, and South Dakota residents pay the most with an average of $348 per year.
What it covers:
Comprehensive insurance covers a wide range of events that can damage your vehicle, including:
- Theft
- Vandalism
- Fire
- Natural disasters (floods, hurricanes, tornadoes, etc.)
- Falling objects (trees, rocks, etc.)
- Animal damage (hitting a deer or other animal)
-
Provides protection against a wide range of events that can damage your vehicle
-
Can be useful if you live in an area with a high risk of natural disasters or theft
-
Typically has a lower deductible than collision coverage
-
Comprehensive coverage can be expensive, especially if you have a high-value vehicle
-
It may not be necessary if you live in an area with a low risk of non-collision incidents
Factors that affect your premiums
The cost of comprehensive insurance depends on several factors, including your vehicle’s value, location, driving record, and deductible. Generally, the higher the value of your vehicle, the more you can expect to pay for comprehensive coverage.
Also, your premiums may be higher if you live in an area with a high risk of natural disasters or theft. Finally, choosing a higher deductible can lower your premiums, but it also means you’ll have to pay more out-of-pocket if you need to file a claim.
Collision insurance
Collision insurance covers damage to your vehicle in the event of a collision when you’re at fault or, regardless of fault, if you’re in a no-fault state. This type of insurance is designed to help you repair or replace your vehicle if it is damaged in an accident with another vehicle or object, or if it overturns.
According to the NAIC, the average annual cost of collision coverage in 2019 was $384. However, premiums vary a lot between states. South Dakota residents pay the least for collision coverage, with an average of $249 annually, while people in Washington D.C. pay the most, with average annual collision premiums of $540.
What it covers
Collision insurance covers the cost of repairing or replacing your vehicle if you’re in an at-fault accident or any accident in a no-fault state. This includes:
- Accidents with other vehicles
- Collisions with objects like trees or telephone poles
- Rollover accidents
-
Provides protection for your vehicle in the event of a collision, regardless of fault
-
Can be useful if you have a newer or more expensive vehicle
-
May be required if you lease or finance your vehicle
-
Collision coverage can be expensive, especially if you have a high-value vehicle
-
It may not be necessary if you have an older or less expensive vehicle
Factors that affect your premiums
The cost of collision insurance depends on several factors, including the value of your vehicle, location, driving record, and deductible. Generally, the higher the value of your vehicle, the more you can expect to pay for collision coverage.
Also, choosing a higher deductible can lower your premiums, but it also means you’ll have to pay more out-of-pocket if you need to file a claim.
Is your loss covered by comprehensive or collision coverage?
Wondering if a loss is covered by comprehensive or collision coverage? The table below tells you what type of coverage pays for each type of loss listed.
| Cause of Damage | Comprehensive | Collision |
|---|---|---|
| Theft | Covered | Not Covered |
| Falling objects | Covered | Not Covered |
| Fire | Covered | Not Covered |
| Natural disaster | Covered | Not Covered |
| Animals | Covered | Not Covered |
| Vandalism | Covered | Not Covered |
| Collision with another vehicle | Not Covered | Covered |
| Collision with a stationary object | Not Covered | Covered |
| Single-car accident | Not Covered | Covered |
FAQs
Do I need to carry comprehensive coverage on an old car?
The older your car, the less useful comprehensive coverage becomes. This is because insurers only pay claims up to the value of your car minus the deductible.
What does full-coverage car insurance cover?
Full-coverage car insurance includes liability, comprehensive, and collision coverages. It also includes any other coverage that’s mandatory in your state, such as PIP or medical payment coverage.
Do I need to carry collision coverage on an old car?
Collision coverage starts to become obsolete as your car ages. Your insurance company will only pay claims up to the value of the car minus the deductible. So paying for coverage you won’t benefit from is not ideal.
A good rule of thumb is to drop collision coverage once your deductible equals 10% of the vehicle’s worth. So if you have a $500 deductible, you should consider removing collision coverage when your vehicle’s worth drops below $5,000.
Is it better to have comprehensive or collision coverage?
If you can only afford comprehensive or collision coverage, you must choose comprehensive. You can’t purchase collision coverage if you don’t have comprehensive coverage. However, you can have comprehensive coverage without collision.
Protect yourself with comprehensive and collision coverage
With comprehensive and collision coverage, you don’t need to worry about a loss straining your finances. Use our online tool to find the best rates on full-coverage insurance today.
Related content:
