Comprehensive vs Collision Insurance: What’s the Difference?

Owning your first car is a big moment in anyone’s life, be it a brand new car or your dad’s trusted one. But with owning your car comes the necessity of getting your insurance, and this is where things take a confusing turn. With so many types of vehicle insurance, policies, and coverage, choosing the right insurance for your car that is low cost and great at the same time can be overwhelming.

A common confusion always persists between comprehensive and collision insurance. What makes them different, should you get one or both? This article will discuss in detail everything you need to know. This is comprehensive vs collision insurance, putting them side by side and comparing the benefits of both. Let’s get started.

The Mandatory Insurance: Liability Coverage

Almost every state in the US has made it mandatory for vehicle owners to get liability insurance. This insurance is not for your car, but for the car or the property, you might damage in the case of an accident. So there is not a question of choice when it comes to liability insurance, you either get it or don’t drive the car.

The Optional Insurance

Comprehensive and collision insurances are optional insurances, meaning that you are not bound to get these insurances if you don’t want to, but getting them is a sensible thing to do. These insurances are your insurances, both protecting your vehicle from various accidents and damages. A recent survey revealed that over 70% of the drivers in the US choose either comprehensive or collision insurance. So what makes them different? And is one amongst the two better?

Comprehensive Insurance vs Collision Insurance

While both the insurances are optional and personal, the damages they cover make them very different. Comprehensive insurance covers the damage done to your car by something else, which does not involve your active participation. A tree falls on your car and shatters the windscreen is not your deed, hence it is covered in the comprehensive insurance.

Collision Insurance covers all the damage that is caused either by you or by another driver. Perhaps a car drove a little too close to your car, denting your car. Or perhaps a speeding daredevil hits your vehicle and flips it over. Or perhaps you lose control of the car and hit the tree, all these damages are covered in the collision insurance. This is the main difference between the two insurances. Let’s see what these two insurance covers in detail.

Comprehensive Insurance

Comprehensive insurance covers any type of damage to your vehicle that is not caused by you or another driver. These damages are usually natural disasters and calamities such as

• Earthquakes
• Floods
• Tornadoes
• Falling objects such as trees
• Hailstorm
• Acts of vandalism
• Riot
• Fire
• The impact from animals such as a deer hitting your car

So comprehensive coverage protects your car from “acts of God” and it makes sense to buy this coverage if your car is brand new, or expensive at the current market.

This is the cheapest insurance among the three because these calamities and damages are very rare. You don’t run into earthquakes or deers now and then. Plus, comprehensive coverage is subject to deductibles which we’ll discuss later in the article.

Collision Insurance

Just like Liability insurance is for the damage your vehicle will cause to someone else’s vehicle or property, collision insurance is the liability insurance for your vehicle. Both liability and collision insurance are priced very similarly and cost a pretty penny. And although it is possible to get cheaper auto insurance, the cost of collision insurance will always be higher than comprehensive insurance.

For example, we looked at the collision coverage cost of ten of the most popular vehicle models in the US. The average collision coverage cost came out to be $1,968. The average liability coverage cost came out to be $1,746. And what was the average comprehensive collision converge? $163.

Collision coverage is expensive because it is more common. It covers:

• Damages when your car crashes into another car or vice versa.
• You crash into a tree or a ditch, or your car flips over.
• Collision coverage can also be used in a hit-and-run scenario.

In the case of rentals, your insurance will be used to calculate the cost of damage and coverage. This brings us to another important element of insurance; deductibles.

Deductibles

Both comprehensive and collision insurance come with deductibles, which can be very confusing for first-time insurance buyers. A deductible is an amount the insurance company sets that is deducted before paying the insurance coverage. For example, if your deductible is $500, then if you make an insurance claim of $1,500, the company will only pay $1,000 (deducting the $500 from the coverage).

Deductibles are calculated based on many factors such as the vehicle’s value, driver’s age, insurance history, etc. The better the driver you are, the lower will be your deductible.

Which One to Get?

The requirement of insurance varies from vehicle to vehicle. Now that you know what each of these insurance covers, you can evaluate for yourself if spending the dollars on your car’s insurance is worth it or not. We suggest that if your car is brand new and/or expensive, then getting both comprehensive and collision coverage makes sense. But if your car is more than 10 years old and holds a current value of the price of two packs of Budweiser, then so much money would not be the smartest move.