Most states only require liability insurance as a minimum. Comprehensive and collision car insurance are additional coverages in many states, but increase the price of your auto insurance. What is comprehensive and collision coverage, and is the extra insurance cost worth it for you?
What is comprehensive coverage?
Comprehensive coverage helps you repair or replace your vehicle if it’s damaged in an event not caused by a collision. Examples of incidents or events covered by comprehensive coverage include:
- Falling objects
- Floods and natural disasters
- Hitting an animal
Comprehensive coverage also typically includes windshield repair with little to no deductible for the repair or replacement.
What is collision car insurance?
Collision car insurance covers the repair or replacement of your vehicle if it’s damaged in a car crash, whether it’s your fault or not.
When the damages to your car are the other driver’s fault, your collision auto insurance could pay to fix your car and then seek reimbursement from the other driver’s insurance company. This works well in situations where the driver’s insurance company is slow to respond. The claim won’t affect your insurance premium if the other driver is at fault.
Sometimes, there isn’t another driver or insurance company to go after for reimbursement. In this case, your collision auto insurance will pay for your repairs. Some examples where there’s no insurance company to go after include:
- The other driver was uninsured or underinsured
- You were in a hit and run accident
- Your car hits an object like a wall, tree or curb while you were driving
- Your car is damaged by road debris or potholes
What does collision car insurance NOT cover?
- Damage to another person’s vehicle
- Damage to your car from theft or vandalism
- Damage from an animal running into your car
- Damage to your car from a fire
- Damage from a natural disaster or bad weather like hail
- Medical bills
Why should I buy collision car coverage?
If your car is financed or you’re leasing it, your lender will typically require the car have collision insurance until it’s paid off.
If you don’t owe money on your car, ask yourself how much it would cost to replace or repair your vehicle if it’s damaged or totaled in an accident. If you don’t think you can afford to fix or buy a new car after a crash, having collision coverage could give you peace of mind after an emergency.
What if the damage to my car is severe?
Both comprehensive coverage and collision auto insurance will pay for repairs to your car unless the cost of fixing the damages is higher than your car’s value. In that case, your car will be “totaled” by your insurance company and they will pay you the full book value of the car. You can get the book value of your car online at Kelly Blue Book.
How do I pick the right collision or comprehensive coverage?
Coverage comes with a deductible, which is an amount you pay before your insurer pays for your claim. For example, if you have a $1,000 deductible and your car is damaged, you have to pay $1,000 towards the repair and the insurance company pays the rest.
You can usually pick the amount of your deductible when you’re signing up. The lower the deductible, the higher your annual premium, so choose the maximum amount you’re comfortable paying out of pocket after an accident to save on your monthly premium.
Both insurance coverages have a limit, which is the maximum amount your policy will pay toward a covered claim. Your coverage limit is typically the cash value of your vehicle.
Frequently Asked Questions
What is no fault insurance?
No-fault insurance covers the medical expenses of your passengers and you in the event of a crash, regardless of whose fault the accident is. No-fault insurance may also be referred to as personal injury protection (PIP) insurance.
What is comprehensive car coverage?
Comprehensive coverage helps you repair or replace your vehicle if it’s damaged in an event not caused by a collision like hail, flooding or a falling object.
What is collision coverage?
Collision insurance helps you repair or replace your car if it’s damaged in a crash or collision with another vehicle or object like a telephone pole.
Should I buy both comprehensive coverage and collision insurance?
It is recommended to have both comprehensive and collision coverage if you can afford it because they cover different situations. Collision auto insurance covers damages due to crashes or collisions. Comprehensive takes care of damages that are out of your control like falling objects or natural disasters.
Do I need collision and comprehensive coverage if I’ve paid my car off?
No. Once your car is no longer financed, you’re not required to keep these coverages. But it may be worthwhile to keep them if your car value is high. A good rule is the 10 percent rule. If the annual premium is higher than 10 percent of your car’s book value, you can consider dropping these coverages.