Difference between comprehensive and collision car insurance

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Comprehensive and collision insurance are two types of car insurance that are part of a full coverage policy. They provide physical damage protection for your vehicle after an at-fault accident or a non-collision event, like theft or weather damage.

Unlike liability insurance, comprehensive insurance and collision insurance are not legally required, but if you have a loan or lease on your car, you’ll need both. Without comprehensive and collision insurance you will have to pay out of pocket for repairs to your vehicle if another driver isn’t at fault for the damage.

Below, we’ll discuss the differences between comp and collision, the average cost of collision insurance compared to comprehensive, and why you might need a full coverage policy.

KEY TAKEAWAYS

• Comprehensive insurance and collision insurance provide physical damage coverage for your vehicle.
• Collision insurance pays for your vehicle’s repairs after an accident you cause, while comprehensive insurance pays for your vehicle’s repairs stemming from losses like weather damage, vandalism and theft.
• Collision and comprehensive insurance are typically purchased together as part of a full coverage car insurance policy.
• Standard collision and comprehensive insurance policies pay claims based on the actual cash value (ACV) of your car, minus a deductible.

IN THIS ARTICLE

• The difference between comprehensive and collision
• Comprehensive vs. collision insurance cost
• What is comprehensive insurance?
• What is collision insurance?
• Do I need comprehensive and collision insurance?
• How to save on comprehensive and collision insurance
• Comprehensive vs. collision insurance claims
• When to cancel comprehensive and collision insurance

The difference between comprehensive and collision

Collision and comprehensive insurance are common coverages that are part of a full coverage policy. They cover damage to your vehicle from different causes.

As the name suggests, collision insurance covers accidents. Specifically, it will pay for your vehicle’s repairs if you hit another driver. It also covers rollovers and single-car accidents. So, for instance, if you ran into a telephone pole and the front end of your car was damaged, collision insurance would pay for the damages.

Comprehensive insurance, on the other hand, pays for your vehicle’s damages after a non-collision incident, which is usually out of your control. For example, comprehensive insurance kicks in when your car gets stolen or vandalized, or in the case of weather-related damage. It also covers things like fire damage, flood damage and accidents with animals.

The table below lists a few claims, and which types of insurance would apply.

A notable difference between collision and comprehensive coverage is that you are more likely to see future car insurance rate increases from collision claims than you are from comprehensive claims. Collision claims are usually your fault, so your rate is more likely to rise. Typically, comprehensive claims are not "at-fault" incidents, so your rate may not increase as much.

The cost of comprehensive vs. collision car insurance depends on many rating factors, including your age, gender, location, driving record, credit score and the type of car you drive.

On average, U.S. drivers pay $263 per year for comprehensive coverage and $723 per year for collision insurance, according to a 2022 rate analysis by Insurance.com. The chart below breaks down collision and comprehensive insurance costs by state.

Comprehensive Vs. Collision Insurance Cost

What is comprehensive insurance?

Comprehensive insurance is a type of auto insurance that pays for your vehicle’s repairs after a loss that is not caused by an accident. It’s often referred to as “other than collision” coverage.

What does comprehensive insurance cover?

Here are some types of losses that are covered by comprehensive insurance:

• Minor windshield damage
• Damage caused by falling or airborne objects like hail, rocks or tree branches
• Theft
• Vandalism
• Fire
• Natural disasters
• Civil disturbances
• Striking an animal

When you file a comprehensive claim, you will have to pay the deductible. For example, if you had a $10,000 claim and a $1,000 deductible, you would receive $9,000 from your insurance company.

What's not covered by comprehensive insurance?

Despite the term “comprehensive,” comprehensive car insurance does not cover everything. Examples of items not covered by comprehensive insurance include:

• Vehicle repairs after an accident
• Damage you caused intentionally
• Medical bills
• Your personal items in the vehicle

What is collision insurance?

Collision insurance pays for your vehicle’s repairs after an accident that you cause. It also covers single-vehicle crashes and rollovers.

What does collision insurance cover?

Here are some situations where collision insurance would come into play:

• Hitting a tree or telephone pole
• Crashing into a building
• Rolling or flipping your car
• Hitting a pothole or curb
• Backing into another car

Like comprehensive insurance, collision coverage also has a deductible.

If another vehicle is responsible for your car's damage, but you use your collision coverage to expedite repairs, you’ll still have to pay the deductible. However, your auto insurance company should subrogate (try to recover your repair costs from the at-fault party). If it collects from the other party, your deductible may be refunded to you.

Do I need comprehensive and collision insurance?

You aren’t legally required to carry comprehensive or collision insurance. But just because comprehensive and collision coverages aren't legally mandated doesn't mean you shouldn’t purchase these types of auto insurance.

"One of the biggest mistakes people make is not having the coverage," Peyton says. "Because it's almost always the person who can't afford an unexpected expense who decides to try and save a little money by dropping coverage."

Without comprehensive and collision insurance, you are at risk of covering all repairs or the total replacement of your car out-of-pocket. In addition, you will be required to carry collision and comprehensive insurance if you finance or lease your vehicle.

How to save on comprehensive and collision insurance

Adding comprehensive and collision insurance to your auto insurance will cause your premium to increase. However, there are a few things you can do to reduce the cost of full coverage insurance:

• Bundle auto insurance with home insurance
• Choose a car that's less expensive to insure
• Improve your credit score
• Drive less
• Improve your driving record
• Increase your deductible
• Look for discounts
• Pay your annual premiums in full
• Sign up for a usage-based discount program

Peyton says that by far the best way to save on optional coverage for your car is to combine your auto and homeowners insurance. He also recommends looking for special discounts. For example, insurers offer savings for safe drivers and good students.

Comprehensive vs. collision insurance claims

When it comes to collision and comprehensive insurance, the claim process works similarly. After the loss, you’ll need to document the damage and notify your insurance company of the incident.

Once the claim has been filed and a claim adjuster has been assigned to your claim, they will investigate the loss, verify your coverage and determine how much money you are owed. You’ll then be offered a settlement to cover the cost of your vehicle’s repairs (or purchase a new vehicle, if your car was totaled).

In a total loss, your settlement will be based on the actual cash value (ACV) of your vehicle, minus a deductible. This means that depreciation is factored into the value of your car.

When to cancel comprehensive and collision insurance

At a certain point, it no longer makes sense to pay for collision and comprehensive insurance. As a general rule, if your premiums and deductibles for comprehensive and collision insurance are equal to or greater than the fair market value of your vehicle, it's likely time to drop the coverage.

For example, if your car is worth $1,000 and your coverage costs $500 a year plus a $500 deductible, you're not really getting anything for your money.

If your premiums exceed 10% of your potential payout, experts say you may want to drop your physical damage coverages. Your potential payout is the value of your vehicle minus your deductible.

For example: If your car is worth $3,000 and you have a $500 deductible, your potential payout would only be $2,500 if your car was totaled, and you placed a collision claim. Using the 10 percent rule, if your collision and comprehensive coverage cost $250 or more a year, it's time to consider canceling the coverage.

Depending upon your deductible and other factors, you could consider dropping both comprehensive and collision insurance if your vehicle's value is below the amounts shown below, where the cost of insurance and deductible is equivalent to the value of your car.

Of course, if you still have a loan on your car, you will have to keep the coverage until it’s paid off. And, at the end of the day, it’s up to you to decide whether keeping the coverage is worth the expense.