Difference Between Comprehensive and Collision Insurance

Car insurance can protect you from the cost of repairing or replacing a car that is damaged in a car accident. Few of us are fully prepared for the costs that come with fixing, or replacing a car, and your insurance policy can help you recover some of the costs without breaking the bank.

There are two types of coverage available that deal with the physical damage to your car: Comprehensive and collision. As you shop around for an insurance policy, it’s important to understand the difference between these two types of coverage, and what situations each is designed to address.

Comprehensive and collision coverage

Comprehensive Coverage

This type of auto insurance focuses on damage to your car that is not the result of a collision. This is the coverage you need if you want to ensure that you are protected when your vehicle is damaged as the result of:

  • Broken glass or damaged glass, including windshield chips and cracks.
  • Contact with an animal. This is important if you live in areas where you are likely to hit animals. In my neck of the woods, deer are the most common animals that cars hit — and they can cause a great deal of damage.
  • Stormy weather, such as flood, hail, wind, and other conditions.
  • Vandalism. If your car is keyed, or painted with graffiti, comprehensive coverage will provide you with what you need to repair the damage. You are also protected if your car is damaged due to thieves breaking in.

Comprehensive damage can be used in combination with other types of auto insurance coverage, or it can stand alone. It is known for its affordability. Comprehensive coverage is often on the cheaper side, providing you with the ability to get more coverage for a smaller premium, and there is rarely a need to have a particularly high deductible.

Collision Coverage

As the name implies, collision coverage is designed to protect you in the event that you hit something with your car. This can be another vehicle (moving or standing still), or it can be an inanimate object.

Collision coverage will cover you if you make a mistake, hitting a guardrail, or if slippery conditions send you careening into a tree. It is also worth noting that if your car sustains damage due to a pothole, it is considered something to be taken care of by collision coverage.

In general, collision coverage can be a little more expensive. Additionally, you might only be able to buy collision coverage if you also buy liability and comprehensive coverage. Many consumers choose to select a higher deductible on collision coverage in order to reduce the cost of the premium. If you choose a higher deductible, you should make sure that you have the ability to pay the deductible. An emergency fund can help you meet this obligation.

The advantage of collision coverage is that you are covered if you make a mistake (something that is bound to happen sometime) with your car. Comprehensive damage, in many cases, is about covering damage to your car from events outside of your control.

Which Should You Choose?

In reality, you should probably get both comprehensive and collision coverage. This is because they take care of two different things.

Some consumers choose to drop some of their coverage, usually comprehensive coverage, as the car gets older. If you car is getting older, you might decide that the cost of paying for the insurance is more than the car is worth. If this becomes the case, dropping some of your coverage might make sense.

If you need your car, especially if you need it to get to work and earn a living, the right auto coverage is important, since it can help you repair your car, or provide you with the money to buy a different car, without causing a financial catastrophe.

Photo by adrian8_8 via Flickr.

About the Author

By , on Feb 25, 2013
Miranda
Miranda is a freelance writer and professional blogger, specializing in financial topics. She has written for a number of financial web sites, and her work has been linked to by many publications, online and off. Miranda's blog is Planting Money Seeds.

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{17 Comments}

  1. Great article. My family has been in the insurance business since the late 1970s and growing up, I spent a lot of time in their office. Unfortunately, for all I know about insurance, I still need my grandpa or dad to explain some things to me and it can get complicated. This article is really easy to follow and great advice. Thanks for sharing.

  2. Paying for both has you covered to a large degree. Seems like a good way to go for me.

  3. My loan company required I carry both when I bought my car. It’s a good thing too…I’ve gotten cracks in my windshield twice now that thankfully were completely covered by my comprehensive coverage.

  4. Seems like collision is for you hitting something while comprehensive is for something hitting you.

    You know, it’s funny. I spent the first 10 years of my driving life living in a rural area with a lot of woods. Never came close to hitting a deer myself, although pretty much everyone in my family has.
    Then I moved to a small city and nearly hit a deer in the middle of town!

  5. Having both is imperative unless you have enough savings to cover a whole new car. 🙂

  6. Jose says:

    Most finance companies will insist that you have both comprehensive and collision if you finance your vehicle with them. Most lenders will also insist on A $500 deductible. I have saved money in the past by raising my deductible to $1000. The only time that ever worked against me was in 2004 when I totaled an $18,000 Altima. Even though the payout was $500 “light” I still think that the higher deductible has paid for itself over the years. Once a car gets older, typically eight years or so, it’s time to consider whether you should carry full coverage or liability only. A good rule of thumb to use when considering whether to have full coverage for your car is to take your monthly premium and multiply by by 12 to calculate your annual cost. If it exceeds 10% of your cars value then it’s time to drop the insurance down to liability only (Per Clark Howard).

  7. In the UK comprehensive cover will always include collision insurance – the latter is not I think available on its own but there is third party insurance where you are covered for damage to other people, cars etc. which is the legal minimum (generally includes fire and theft). We generally run new(ish) cars so we always opt for our comprehensive cover with some deductible – perhaps £250 ($400).

    • Matt says:

      Very true. What’s also surprising about the UK, is that liability + collision + comprehensive, (which we call simply comprehensive) can often be cheaper than 3rd party, fire and theft, (equivalent to liability, fire and theft). Apparently, there’s actuarial evidence to suggest that people (in the UK) who buy collision and comprehensive drive more carefully.

  8. Thank you for this well done explanation. It’s very helpful, especially since I’m in the painstaking process of trying to find new insurance.

  9. We’re rockin’ liability only on our beaters, but collision might be a good way to go. I don’t car if my car get’s totaled, but I don’t want to be on the hook if my liability coverage tops out.

  10. Eddie says:

    Good explanation. In Canada, at least in my province, I’m pretty certain it’s mandatory to have both collision and comprehensive. No option really.

  11. My hobby vehicle only has collision insurance on it because it didn’t make sense to pay for full coverage.

  12. I grew up in a very small town, and I swear that most of the people I know there have hit a deer at some point or another.

    I always pay for both because living in Boston now has its own slew of driving-related heart attacks 🙂

  13. Michelle says:

    I always pay for both. Collision of course is a need, and comprehensive seems to have such a minimal cost that I don’t even think about not adding it.

  14. Thad says:

    Comprehensive is a must where we live…far too many deer and far too few hunters! We have hit 4 deer in the time we have lived here.

  15. This is great information. I was in a car wreck a few years ago and became painfully aware of the importance of needing good insurance. I do think we are going to take comprehensive coverage off of my minivan though. It is old and paid off. I don’t think I need full coverage anymore.

  16. Good explanation of the two. We have both on our newer car and just collision on our older car as we rarely drive it. We also have pretty high deductibles set along with a portion of our E-Fund to cover anything that might happen.

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