Car Insurance 101: Collision Coverage v. Comprehensive Coverage
Do you know the difference between comprehensive and collision coverage? Find out which one you need for your vehicle!
Collision Insurance:
Collision insurance covers damage to your car resulting from a collision with another vehicle or an object, such as a tree, guardrail, or building. It also covers single-car accidents where your vehicle rolls over or hits an obstacle, even if the collision is your fault.
Examples of When Collision Insurance is Used:
- Your car is damaged in a crash with another vehicle
- You hit a tree, pole, or another stationary object
- Your car rolls over in an accident
- Your vehicle is involved in a hit and run
Deductible:
- You need to pay a deductible (the amount you pay out of pocket before your insurance covers the rest) when you file a collision claim. Deductible amounts can vary based on your policy.
When It's Important:
- Collision coverage is particularly valuable if you have a vehicle that holds value, as the cost of repairs can be significant.
- It's required if you are leasing or financing your vehicle.
Comprehensive Insurance:
Comprehensive insurance covers damage to your car that is not the result of a collision. This includes a wide range of events such as theft, vandalism, natural disasters (e.g., floods, hurricanes), fire, falling objects (e.g., trees, hail), and animal strikes (e.g., hitting a deer).
Examples of When Comprehensive Insurance is Used:
- Your car is stolen.
- Your windshield is cracked by a falling tree branch.
- Your car is damaged by a natural disaster like a flood or hailstorm.
- Your car is vandalized or damaged by fire.
Deductible:
- Similar to collision coverage, you will need to pay a deductible when you file a comprehensive claim. The deductible amount is determined by your policy.
When It's Important:
- Comprehensive coverage is useful for protecting your car against a wide range of non-collision-related incidents.
- It's especially beneficial if you live in an area prone to extreme weather conditions, or wildlife.
Key Differences:
- Type of Damage Covered: Collision insurance is specifically for accidents involving collisions with other vehicles or objects. Comprehensive insurance covers a broader range of incidents, including theft, vandalism, natural disasters, and other non-collision-related damage.
- Scope of Coverage: Collision is focused on moving accidents, while comprehensive covers stationary and external incidents.
- Requirement: Lenders often require both collision and comprehensive insurance if you are leasing or financing your vehicle. If you own your car outright, these coverages are optional but recommended based on your risk tolerance and the value of your vehicle.
Having both collision and comprehensive coverage provides more complete protection for your vehicle. While collision insurance helps with repairs from accidents, comprehensive insurance covers a wide array of other potential damages. Assess your personal needs, vehicle value, and local risk factors to determine the right balance of coverage for your situation.