Understanding the Difference Between Comprehensive and Collision Coverage
When it comes to auto insurance, understanding the various types of coverage available can be crucial in making informed decisions. Two of the most important types of coverage are comprehensive and collision insurance.
While they are often bundled together, they serve different purposes and cover different types of incidents. Let’s break down the key differences between these two coverages.
Collision Coverage
Collision insurance is designed to cover damages to your vehicle resulting from a collision. This includes:
Accidents with other vehicles: If you hit another car or another car hits you, collision coverage will help pay for the repairs to your vehicle.
Single-car accidents: If you hit an object like a tree, fence, or pole, collision coverage will cover the damage.
Rollovers: If your car rolls over in an accident, collision coverage will help pay for the repairs.
It’s important to note that collision coverage typically comes with a deductible, which is the amount you pay out of pocket before your insurance kicks in. The higher the deductible, the lower your premium, but you’ll pay more out of pocket in the event of a claim.
Comprehensive Coverage
Comprehensive insurance, on the other hand, covers damages to your vehicle that are not the result of a collision. This includes:
Theft: If your car is stolen and not recovered, comprehensive coverage will reimburse you for the actual cash value of your vehicle.
Weather-related damage: This includes damage from natural disasters like tornadoes, hail, floods, and fires.
Vandalism: If your car is damaged by vandals, comprehensive coverage will help pay for the repairs.
Falling objects: Damage from things like falling trees or debris is covered under comprehensive insurance.
Animal collisions: If you hit an animal, such as a deer, comprehensive coverage will cover the damage.
Like collision coverage, comprehensive coverage also comes with a deductible. Choosing a higher deductible can lower your premium, but you’ll need to pay more out of pocket if you file a claim.
Why You Need Both
While neither comprehensive nor collision coverage is legally required in auto insurance, they are highly recommended, especially if you have a new or high-value vehicle. If you have a loan or lease on your car, your lender will likely require both types of coverage. Without them, you would have to pay out of pocket for any damage to your vehicle, regardless of the cause.
