Comprehensive vs. collision insurance
“Comprehensive and collision insurance” are actually two types of physical damage coverage you can add to your car insurance policy. Collision coverage pays for damage caused to your vehicle when hitting another car or object, while comprehensive covers other accidents that are not collision-related, like weather events. These coverages are often purchased together to supplement required insurance minimums. Understanding the difference between collision vs. comprehensive insurance can help you determine the best choice for your car insurance needs.
Collision vs. comprehensive insurance
Although commonly called “collision and comprehensive insurance,” collision and comprehensive options are individual coverages you can include in your auto insurance policy. They are not individual insurance policies, themselves. And while comprehensive and collision are usually sold as a package, you can buy them individually and choose to buy one coverage over the other.
When referring to full coverage car insurance, the phrase typically means you have coverage for your vehicle as well as injury or damage to others. Liability insurance pays for the other party’s injuries and property damage, while comprehensive or collision pays for physical damage to your car. The following table illustrates different types of vehicle damage covered with collision vs. comprehensive.
|Comprehensive coverage||Collision coverage|
|Broken windows or windshields
Hitting an animal
Theft of the vehicle
|Collision with another person’s property, such as their car or home
Collision with another object, such as a tree, fence or light pole
Damage from a car accident, regardless of fault
Comprehensive coverage is often referred to as “other-than-collision” coverage because it kicks in where collision does not. With comprehensive coverage, your insurance company can help pay for scenarios like broken car glass, fixing your car after hitting an animal, fire damage and damage from fallen objects. According to the most recent data from the National Association of Insurance Commissioners (NAIC), the average premium for comprehensive coverage nationwide is about $168 per year.
Collision insurance offers physical damage coverage for your vehicle if it is either hit by someone else’s car or involved in hitting another car or object. An object can include anything such as a tree, light pole or a shopping cart left in the parking lot. Although there are fewer scenarios where collision insurance may require claim payouts by an insurance company, the cost per claim tends to be higher due to collision claims often resulting in more damage versus comprehensive claims. The average national premium calculated by the NAIC for collision insurance is $378 annually.
Deductibles for comprehensive and collision insurance
Comprehensive and collision are separate physical damage coverages, which usually include separate deductibles. This differs from liability insurance, which has no deductibles for either party when a claim is filed. The deductible is the amount you have to pay out of pocket after filing a claim. You can choose your own deductible, which may be the same for both. Typically, the higher the deductible, the lower the premium. However, you will have to pay more out of pocket with a higher deductible if you have to use either coverage.
Because comprehensive coverage typically costs less than collision, the difference between the deductible levels may not be as significant as it is with collision. You may be able to set a lower comprehensive deductible for a small price difference compared to a lower collision deductible.
Do you need collision or comprehensive insurance?
Despite collision and comprehensive coverage being optional, the most recent data analyzed by the Insurance Information Institute (III) shows about 78% of insured drivers purchase comprehensive coverage and 74% buy collision coverage. Some scenarios require you to carry full coverage, such as leasing or financing a car.
You might also want to consider adding comprehensive and collision insurance coverages if:
- There is a high likelihood of weather events, animal collisions, vandalism or car thefts in your area.
- You do not have the funds to repair or replace your car after an accident or comprehensive-related scenario.
- Your car is less than 10 years old or still has a high market value.
If your car is older and not worth much, you may decide comprehensive or collision insurance is not worth the cost. To help decide if you need one or both coverages, determine the market value of your car and compare that value to the cost of coverage. If your car were totaled, the insurance company would only pay the fair market value minus any existing damage and your deductible. Many experts use a general rule of thumb, where if the cost of annual premiums is 10% or more than the payout you would receive, it may not be worth paying for full coverage.
Frequently asked questions
Is it better to have comprehensive or collision insurance?
Comprehensive and collision cover different scenarios, so one is not better than the other. If you are not required to carry both coverages, you can choose to carry both or just one depending on your needs. Collision coverage could pay if you hit another car or object, or if someone else hits your car. Comprehensive covers non-collision events, including vandalism, theft, fire and weather events.
When should you drop collision coverage on your car?
Deciding when to drop collision coverage on your vehicle is a personal decision, but the general rule is when the annual premium cost is equal to or exceeds 10% of the car’s value. However, if your car still has some market value and you cannot afford to pay for repairs or to replace it, you may want to keep collision coverage. You can also choose to increase your collision deductible to lower the premium you pay if you do not want to drop the coverage entirely.
Should I carry comprehensive insurance on an older car?
According to the most recent NAIC database report, the average annual premium for comprehensive insurance is less than half the cost of collision insurance, at about $168 versus $378, respectively. If the cost of comprehensive coverage on an older car is considerably more than the car’s market value, it may not make financial sense to continue carrying the coverage.
You can choose to carry comprehensive coverage on an older car even if you no longer want collision coverage. Having comprehensive on your policy can offer some coverage for some physical damage scenarios, but you will not have coverage if your car is damaged after hitting or being hit by another car or object.