Comprehensive Vs. Collision: What Coverage Is Best For You?
Both comprehensive and collision insurance are common vehicle coverages offered by providers, but whether or not you need either–or both–depends.
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Key Points:
- Collision coverage helps pay for repairs to your vehicle after an accident, regardless of who caused it.
- Comprehensive coverage protects your vehicle from damage not related to accidents, such as theft, fire, and environmental causes.
- If you’re leasing a car, your lender will almost certainly require you to carry collision and comprehensive coverage.
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Knowing the difference between comprehensive vs. collision policies is an important step in choosing the right financial protection for your vehicle. Both cover physical damage to your car, but each one works differently.
So, how do you know if comprehensive and collision policies are right for you? In this article, we’ll break down what each type of insurance covers to help you decide.
If you’re in the market for car insurance, we recommend comparing free quotes from a few of the best car insurance companies so you can find the best rates. Enter your zip code above to get started.
Comprehensive Vs. Collision Insurance: Key Differences
What separates comprehensive vs. collision insurance is when the coverage kicks in. Collision coverage pays to repair your vehicle if it’s damaged in a collision with another car, building, or object. Comprehensive car insurance covers damages from non-collision events, like if you hit an animal or if your car is damaged while parked, like in the case of a natural disaster or vandalism.
It’s important to note that comprehensive and collision policies only cover your own vehicle. They won’t cover any of your medical bills, nor will they cover damages to other peoples’ vehicles or property after an accident.
You may hear of insurers offering full coverage auto insurance, which is a combination of comprehensive, collision, and liability car insurance. Minimum liability insurance varies by state and helps pay for medical bills and damage to other peoples’ property when you cause an accident.Liability coverage is mandated in almost every state; Virginia will require it starting in mid-2024, leaving New Hampshire as the only exception.
How Much Do Comprehensive And Collision Policies Pay Out?
When comparing comprehensive vs. collision insurance coverage, you’ll find many differences. But the amount of money your insurer will pay out per claim is the same. The maximum amount a policyholder will give you per comprehensive or collision claim is the actual cash value (ACV) of the car before it’s declared a total loss, minus your deductible. A car qualifies as totaled if it can’t be repaired to safe driving standards, or if the cost of necessary repairs is more than the value of the car.
What’s The Cost Of Comprehensive Vs. Collision Coverage?
Comprehensive coverage is typically cheaper than collision coverage. According to the most recent available data from the National Association of Insurance Commissioners (NAIC), the average cost of collision insurance in the U.S. in 2021 was $377.33, while comprehensive car insurance was $179.84 the same year.
However, the cost of your own comprehensive or collision policy may differ, as car insurance rates are highly personalized. The cost of your car insurance policy will depend on factors such as your car’s age and mileage, your driving history, and your credit score.
The size of your deductible usually influences an insurance quote as well. A car insurance deductible is the upfront cost you pay when filing an insurance claim. Common deductible amounts range from $100 to over $1,000. Choosing a lower deductible will typically lead to a higher monthly premium payment, but you’ll have to pay less out of pocket when you need repairs.
Do You Need Comprehensive And Collision Insurance?
If you aren’t leasing or financing your car, both types of coverage are usually optional, and neither is required for you to hit the road in any state. Usually, the value of a full coverage policy depends on the value of your car. When considering what types of auto insurance coverage you need, there are some key things to think about.
Are You Financing Your Car?
If you’re taking out a loan to purchase a vehicle, it’s possible your lender will require you to buy both comprehensive insurance and collision insurance. This is so that the lender can collect the payout for the value of the vehicle in the event of a theft or if the car is totaled.
After you’ve paid off your car loan, both comprehensive and collision insurance will be optional coverages.
Is Your Car Expensive To Fix?
Another reason to purchase or keep paying for comprehensive and collision insurance is if your car has high repair costs. Replacement parts for a luxury car brand like Porsche will probably have a higher price point than parts for a Hyundai, and their cost could easily overshoot a deductible. If you have collision or comprehensive coverage and you own an expensive car, your policy could pay for itself after just a couple of repairs.
How Old Is Your Vehicle?
It’s no secret that cars depreciate over time. According to Kelley Blue Book (KBB), many vehicles lose 20% or more of their value within the first year of ownership alone. This means collision and comprehensive coverage become less valuable, as the max payout from an insurance company shrinks as your car’s ACV goes down. And if you have a high deductible, you could see even less money from the insurer.
So for a car that’s over six model years old and has more than 100,000 miles on the odometer, it may not be worth going beyond basic liability coverage. KBB is a good tool to use if you want to estimate the value of your vehicle.
Comprehensive vs. Collision Coverage: Our Take
Comprehensive coverage protects your car against damage, non-collision and environmental causes, like vandalism, theft, weather events, and falling objects. Collision insurance pays for damages to your car in a crash, regardless of who caused it. Both comprehensive and collision coverage are good to have in most cases, but not legally required in any state. If you lease your car, your lender may require full coverage.
Our Recommendations For Car Insurance
Whether you’re beefing up an existing policy or buying a new one, comparing quotes from different insurance agencies can help you make the best decision for your wallet. Use the tool below to start getting free quotes from top insurance providers in your area, or keep reading to see why Liberty Mutual and AAA are two companies our review team recommends.
Liberty Mutual: Best Customizable Coverage
Liberty Mutual can be a great option for new drivers, as it offers customizable coverage options and numerous discounts for young people. We rate the company 4.6 out of 5.0 stars overall, and it also has an A++ financial strength rating from AM Best. Liberty Mutual not only offers collision and comprehensive insurance, but other optional policies like new/better car replacement and accident forgiveness insurance.
Read more about this provider in our Liberty Mutual insurance review.
AAA: Best Discount Options
While commonly associated with having some of the best roadside assistance plans in the industry, AAA also offers insurance policies and a variety of coverage discounts. It’s important to know that AAA coverage options and service may differ from state to state, but collision and comprehensive coverage are among the company’s basic car insurance options. Keep in mind that in order to get coverage from AAA, you’ll need a AAA membership. Membership fees run about $40 to $165 per person annually, depending on location.
Check out our AAA insurance review and learn more.
FAQ: Comprehensive Vs. Collision
Below are some frequently asked questions about comprehensive vs. collision insurance:
When should you drop collision and comprehensive coverage?
You can drop collision insurance and comprehensive insurance when you’ve finished paying off an auto loan. It’s also common to stop paying for full coverage insurance once a car has significantly depreciated in value.
What is the difference between collision and comprehensive coverage?
Collision insurance covers your own car in an accident, regardless of who’s at fault, whether it’s a collision with another vehicle, an object, or a building. Comprehensive insurance covers your vehicle if it’s damaged while parked by weather events, if it’s stolen, or if you hit an animal.
What is covered under comprehensive coverage?
Generally, comprehensive coverage pays to repair damage that happens while the vehicle isn’t moving. This can be an incident such as a tree fall, fire, vandalism, and more. It also covers you if you hit an animal or if your vehicle is stolen.
Is it worth having comprehensive coverage?
If you have a newer car and want it insured against theft or damage, comprehensive coverage might be a great investment. If you can afford expensive repairs or to replace your vehicle entirely, you may not need comprehensive coverage.
How We Rate Car Insurance Providers
Our review team extensively researches auto insurance providers to deliver informed and unbiased assessments of leading companies. We evaluate several key rating factors that are important to consumers to determine which providers are the best in the industry:
- Reliability: It’s important that an auto insurer is able to meet its claims obligations. Companies with a strong financial strength rating from AM Best score best in this category. Established insurers with a long history of reliable service also receive positive marks.
- Availability: Insurance companies that offer wider availability to consumers in terms of state availability and few eligibility requirements are more likely to meet consumer needs.
- Coverage: To determine our coverage score, we look at the number of coverage options available as well as coverage limits and deductible options. Our ratings also take into account additional services and benefits like roadside assistance.
- Pricing: Cost can be difficult to compare between insurers because so many factors impact annual premiums. The cheapest insurer for one driver may not be the cheapest for another. To determine our cost score, we look at insurance rate estimates generated by Quadrant Information Services, discount opportunities, and consumer reports.
- Service: We comb through customer reviews on sites like the Better Business Bureau (BBB) to learn about customer experiences. Insurers with a low volume of complaints score well in this area. We also consider the claims process, giving higher ratings to car insurance providers that offer a smooth experience.
- Technology: Providers with an online quote tool, easy-to-use claims app and a usage-based insurance app score best in this category.
*Data accurate at time of publication.