Liability insurance is the basis of auto insurance policies. it pays for the harm you cause to others and is required in almost every state.
But two other important components of a good auto insurance policy are collision insurance and comprehensive insurance. They do something liability insurance doesn’t: pay for damage to your own vehicle or compensate you if it’s stolen.
That damage can come from a source you wouldn’t expect: animals. A recent State Farm study found that more than two million animals were struck by drivers between July 2020 and June 2021. That was a 7.2% increase over the previous 12 months.
The five states with the most animal collisions in that period were Pennsylvania, Michigan, Texas, California and North Carolina. those accidents included 1.4 million deer-related.
what does collision and comprehensive insurance cover?
Collision and comprehensive coverage are important additions to liability insurance:
- Collision coverage pays for damage to your vehicle if you hit an object or another car.
- Comprehensive insurance pays for non-collision damage, such as damage from weather and fire. also reimburses you for car theft and animal collision damage.
- Your car slides on the ice and hits a guardrail.
- swerve to avoid a squirrel and hit a pole.
- someone dents your car and drives away.
- You hit a deer and dented the fender.
- a fire in your garage damages your car.
- a hail storm damages your car.
- a thief steals your car and doesn’t get it back.
- cannot be repaired to make it safe to drive.
- Repairs would exceed the value of the car.
- Repairs would exceed a certain percentage of the value of the car. In many states, a car is totaled when repair costs exceed 75% of the car’s value.
Car insurers often sell collision and comprehensive insurance together. Here’s how coverage types compare.
Nationwide, 74% of drivers with auto insurance buy collision coverage and 78% buy comprehensive coverage, according to the Insurance Information Institute.
examples of when you might file a collision claim
examples of when you might file a comprehensive claim
what is a deductible?
Both collision and comprehensive insurance generally have deductibles. a collision or comprehensive coverage claim will be reduced by the amount of the deductible.
Common deductibles are $250, $500, $1,000 and more. So, if you are in an accident and $2,000 worth of damage to your vehicle and your deductible is $500, the insurance company would pay $1,500 for the claim.
Some auto insurers offer “declining deductibles” to customers as a reward for good driving. Under these programs, your deductible goes down over time if you don’t make certain claims.
the maximum insurance payment
See also: FDIC | What We Do
For both comprehensive and collision insurance, the maximum possible payment is the value of the vehicle just before the accident if totaled, less the amount of the deductible. a car can be considered totaled if:
and if you have a new car, don’t assume it will be harder to reach the threshold to total it. technology in new cars is so expensive to repair that it makes cars more likely to be destroyed in an accident.
Do I need comprehensive and collision insurance?
If you have a car loan or car lease, the lender or leasing company will likely require you to purchase collision and comprehensive. that’s so you don’t abandon your loan or lease if your car is totaled or stolen.
once you have paid off your car loan, collision and comprehensive will be optional.
if you’re not required to buy collision and comprehensive, you might still want them. Ask yourself this: If your car were damaged or stolen, you could easily pay for the repairs or buy another car. If the answer is no, collision and comprehensive offer some financial protection.
But as vehicles age, comprehensive and collision coverage can become less valuable to you compared to the cost. As the value of your vehicle decreases, so does your maximum possible insurance payment in the event of a total loss or theft, especially if you have a high deductible.
For example, let’s say you have a 2005 Honda Accord that is worth about $3,300. If the car is destroyed in a flood and you have a $1,000 deductible, your insurance check will be $2,300. you can judge if the price you pay for collision and comprehensive over several years is worth the potential benefit.
The average collision claim is $4,412.31, according to the most recent data from the National Association of Insurance Commissioners. the average full claim is $1,359.04.
how much does comprehensive and collision insurance cost?
Nationally, the average cost of collision coverage is $378 a year and the average cost of comprehensive insurance is $168, according to the most recent data from the National Association of Insurance Commissioners. see the average in your state below.
what if someone else damages my car?
Collision insurance is good for situations where you accidentally damaged your own car, like hitting a pole. but it can also be useful if someone bumps into you. if that happens, you have two options:
- Make a claim against the other driver’s liability insurance. If the accident was someone else’s fault, your liability insurance should pay for the damage to your car.
- Make a claim on your own collision insurance. You may not want to go through someone else’s insurer. instead, you can file a claim on your collision insurance. the downside is that the insurance check will be reduced by the amount of your deductible.
what is the average repair time for a damaged car?
The average repair time (from the time you drop the car off at the body shop to the time you pick it up) is nearly 11 days for cars, according to ccc information services, a provider of data and technologies for the automotive industry. , collision repair, and insurance industries.
Mean time to repair has increased over the years, which ccc attributes to increased vehicle complexity and “many sophisticated vehicles” taking longer to repair.
what about rental car insurance?
If you rent a car, your personal auto policy will typically extend to the rental, including comprehensive auto, collision, and liability insurance. That means you won’t need to buy coverage offered at the rental counter, like collision damage waiver, unless you want to avoid potential claims on your own policy. ask your auto insurance agent to confirm that your policy will also cover a rental.
rental reimbursement auto insurance will help pay for that rent. This is an optional type of coverage that helps cover the cost of a rental car if your car is damaged in an accident covered by your insurance policy.
You will need to cover any rental costs in excess of the rental reimbursement coverage limits. For example, if you are limited to $30 per day for up to 30 days, you will have to pay out of pocket for any amount over the daily limit or over 30 days. you may be able to purchase higher limits.
what comprehensive and collision insurance will not cover
While comprehensive and collision coverage, along with liability insurance, provide a broad spectrum of coverage, they still do not cover:
injuries sustained in an accident. (Depending on the situation, injuries may be covered by another driver’s liability insurance, or your own personal injury or medical payment protection insurance, or your own health insurance.)
Items stolen from your car, such as a laptop or wallet. (Look up your homeowners insurance or renters insurance instead.)
Car Insurance Highlights: Stolen Vehicles
A car is stolen every 36 seconds, according to the latest hot spot report from the National Crime Insurance Bureau (NICB). covid-19 did not hinder vehicle thieves. After a year of decline in car thefts in 2019, car theft figures increased to 880,595 car thefts in 2020 compared to 794,019 in 2019.
vehicle theft rates by state
The hotspot report uses a theft rate based on the number of cars stolen per 100,000 people. despite the increase in thefts in the us In the US, 10 states saw a decrease in vehicle thefts from 2019.
The comprehensive coverage portion of an auto insurance policy pays for the value of your vehicle in the event of theft, but taking some preventative steps may be the best defense. the nicb recommends these four points of protection:
- common sense. always remove the keys from the ignition, close the doors and windows, and park in well-lit areas.
- Warning devices. Consider car alarms and visual devices such as column collars, steering wheel locks, and brake locks.
- Immobilization devices. prevent thieves from bypassing your car’s ignition system (such as hot wiring). examples include smart keys, fuse cutouts, kill switches, wireless ignition authentication, and starter, ignition, and fuel pump disablers.
- tracking devices. These systems typically use GPS and wireless technology to alert you if the car has moved, and will track and monitor the vehicle’s whereabouts.