Understanding the Difference between Comprehensive and Collision Coverage

Comprehensive and collision are the basic types of coverage options for physical damage to your vehicle and understanding the differences between them is important.  Together, these two common types of auto insurance offer you protection when your vehicle is damaged. The type of damage they cover, however, is very different.  

The main difference between collision and comprehensive coverage comes down to the question of what the driver controls.  Collision insurance will cover events within a motorist’s control or when another vehicle collides with your vehicle. Comprehensive coverage generally falls under “acts of God or nature” or things that are typically out of your control while driving.

Collision coverage is very important for protecting your vehicle against the financial loss that comes with physical damage to your vehicle.  As the name implies, collision insurance covers the insured for damage from an actual collision. Meaning it will cover damage from a collision with another vehicle, tree, pole, guardrail and most other possible roadway hazards.

Even though “collision insurance” sounds broad, it will not cover every single collision you may experience.  If you have it, this type of coverage will pay for damage to your own car from:

  • A crash you cause with another driver
  • A collision with an object, such as a tree or mailbox
  • Your car rolling over
  • Another driver hitting your vehicle, if they do not have any or enough insurance to cover the cost of the damages

Coverage can be for full replacement or just repairs.  A standard collision automobile insurance policy will cover repairs up to the fair market value of your vehicle.

Comprehensive insurance coverage, on the other hand, is like bad luck insurance for your vehicle; it covers damage to your vehicle caused by events such as theft, vandalism or hail, etc.  Things that are out of your control. In some cases, comprehensive insurance covers the situations that collision insurance does not – which is why bundling the two together can work in your favor.

Generally, you would file a comprehensive insurance claim if your vehicle is damaged by:

  • Hail, flood, lightening, hurricane or tornado
  • Falling objects, such as a tree limb
  • Fire or explosion
  • Hitting an animal
  • Theft
  • Earthquake
  • Vandalism

While comprehensive insurance is optional as far as your insurer or state laws are concerned, lenders typically require it if you finance or lease your vehicle.  Keep in mind that this coverage becomes less valuable as your car depreciates since it will never pay out more than the value of your vehicle. Therefore, if it is not required, do the math and make sure that you are not paying for coverage that will never pay out when you need it.

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