Comprehensive vs. Collision Insurance | Bankrate

“Comprehensive and collision insurance” are actually two types of physical damage coverage you can add to your auto insurance policy. collision coverage pays for damage to your vehicle caused by colliding with another car or object, while comprehensive coverage covers other accidents that are not related to the collision, such as weather events. these Coverages are often purchased together to supplement required insurance minimums. Understanding the difference between collision insurance and comprehensive insurance can help you determine the best option for your auto insurance needs.

collision vs comprehensive insurance

Although commonly called “comprehensive and collision insurance,” comprehensive and collision options are individual coverages that you can include in your auto insurance policy. they are not individual insurance policies, per se. And while comprehensive and collision coverage are usually sold as a package, you can buy them individually and choose to buy one coverage over the other.

Reading: How does liability insurance differ from comprehensive or collision

When referring to full coverage auto insurance, the phrase generally means that you have coverage for your vehicle as well as for injuries or damages to others. Liability insurance pays for injuries and property damage to the other party, while comprehensive or collision insurance pays for physical damage to your car. The following table illustrates the different types of vehicle damage covered by collision versus comprehensive.

comprehensive coverage

Comprehensive coverage is often referred to as “non-collision” coverage because it kicks in where the collision doesn’t. With comprehensive coverage, your insurance company can help pay for scenarios like broken car glass, repairing your car after hitting an animal, fire damage, and damage from dropped objects. According to the most recent data from the National Association of Insurance Commissioners (NAIC), the average premium for comprehensive coverage nationwide is approximately $168 per year.

collision insurance

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Collision insurance provides physical damage coverage for your vehicle if it is struck by another person’s car or collides with another car or object. An object can include anything such as a tree, utility pole, or shopping cart left in the parking lot. Although there are fewer scenarios in which collision insurance may require claims to be paid by an insurance company, the cost per claim tends to be higher due to the fact that collision claims often result in more damages compared to accidents. comprehensive claims. The national average premium calculated by the NAIC for collision insurance is $378 a year.

deductibles for comprehensive and collision insurance

Comprehensive and collision are separate coverages for physical damage, which generally include separate deductibles. this differs from liability insurance, which has no deductibles for either party when a claim is filed. The deductible is the amount you must pay out of pocket after you file a claim. you can choose your own deductible, which can be the same for both. Generally, the higher the deductible, the lower the premium. however, you will have to pay more out of pocket with a higher deductible if you have to use either coverage.

Because comprehensive coverage generally costs less than collision, the difference between deductible levels may not be as significant as it is with collision. you may be able to set a lower comprehensive deductible for a small price difference compared to a lower collision deductible.

do you need collision or comprehensive insurance?

Although comprehensive and collision coverage are optional, the most recent data analyzed by the Insurance Information Institute (III) shows that approximately 78% of insured drivers purchase comprehensive coverage and 74% purchase comprehensive coverage. of collision. some scenarios require you to have comprehensive coverage, such as a car lease or financing.

You might also consider adding comprehensive and collision insurance coverage if:

  • There is a high probability of weather events, animal collisions, vandalism, or car theft in your area.
  • You don’t have the funds to repair or replace your car after an accident or comprehensive problem-related situation.
  • your car is less than 10 years old or still has a high market value.
  • See also: Compare the Cost of Chevy Silverado Insurance For Your Model Year | MoneyGeek.com

    If your car is older and not worth much, you may decide it’s not worth paying for comprehensive or collision insurance. To help decide if you need one or both coverages, determine the market value of your car and compare that value to the cost of the coverage. If your car was totaled, the auto insurance company would only pay fair market value minus any existing damage and your deductible. Many experts use a general rule of thumb that if your annual premiums cost 10% or more of what you would be paid, full coverage may not be worth paying for.

    frequently asked questions

    Is it better to have comprehensive or collision insurance?

    comprehensive and collision cover different scenarios, so one is not better than the other. If you are not required to have both coverages, you can choose to have both or just one depending on your needs. Collision coverage might pay if you hit another car or object, or if someone else hits your car. Comprehensive coverage covers non-collision events, including vandalism, theft, fire, and weather events.

    when should you cancel your auto collision coverage?

    Deciding when to drop your vehicle’s collision coverage is a personal decision, but the general rule of thumb is when the annual premium cost equals or exceeds 10% of the car’s value. however, if your car still has some market value and you can’t afford to repair or replace it, you may want to keep collision coverage. You can also choose to increase your collision deductible to lower the premium you pay if you don’t want to drop coverage entirely.

    Should I have comprehensive insurance on an old car?

    according to the most recent naic database report, the average annual premium for comprehensive insurance is less than half the cost of collision insurance, approximately $168 versus $378, respectively. If the cost of comprehensive coverage on an older car is substantially more than the car’s market value, it may not make financial sense to continue the coverage.

    You can choose to have comprehensive coverage on an older car, even if you no longer want collision coverage. Having comprehensive coverage on your policy may offer some coverage for some physical damage scenarios, but you won’t have coverage if your car is damaged after hitting or being hit by another car or object.

    See also: What Is the Cost of Full-Mouth Porcelain Veneers?

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