Comprehensive vs. collision insurance

You can add “Comprehensive” and “Collision insurance” to your car insurance policy. Comprehensive covers damage to your vehicle that is not caused by collisions with other vehicles or objects. Collision coverage pays for damages to your vehicle if it hits another vehicle or object. To supplement minimum insurance requirements, these coverages can often be purchased together. Knowing the differences between comprehensive and collision insurance will help you make the right decision about the car insurance policy that is best for you.

Collision vs. comprehensive insurance

Collision and comprehensive insurance are sometimes referred to as “collision insurance” but they can be added to your auto insurance policy. These are not insurance policies that can be purchased individually. Although collision and comprehensive are often sold together, you can purchase them separately and pick one or 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. Comprehensive or collision insurance covers physical damage to your vehicle and pays for injuries and damage caused by others. Below is a table that shows the different types of vehicle damage that are covered by comprehensive and collision insurance.

Comprehensive coverage

Comprehensive coverage is often referred to as “other-than-collision” coverage because it kicks in where collision does not. Your insurance company may offer comprehensive coverage to cover things like broken glass, damage due to fire, and injuries resulting from hitting animals. 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

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. A shopping cart, tree, or light pole can all be considered an object. While there are less situations where collision insurance might be required to pay out, the average cost of a claim is higher because collision claims often cause more damage than comprehensive claims. The average national collision insurance premium is $378 per year according to the NAIC.

For collision and comprehensive insurance, there are deductibles

Collision and comprehensive are two separate coverages for physical damage. They usually have separate deductibles. This is different from liability insurance which does not have a deductible for one party after a claim has been filed. The deductible is the amount you have to pay out of pocket after filing a claim. The deductible you choose can be different for each claim. The deductible is usually higher than the premium. If you need to use either coverage, however, you’ll have to pay more for it out of pocket.

Comprehensive coverage is generally cheaper than collision so the difference in deductibles may not be as important as with collision. A lower comprehensive deductible may be possible for a smaller price than a lower collision one.

Are you looking for collision or comprehensive coverage?

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. You may need full coverage if you lease or finance a vehicle.

If you are:

  • You are at high risk of car thefts, vandalism, animal collisions, weather events and other undesirable circumstances in your locality.
  • You do not have the funds to repair or replace your car after an accident or comprehensive-related scenario.
  • Your car is less then 10 years old, or still has high market value.

Comprehensive or collision insurance may not be worth the expense if your car is old and less valuable than it is. You can determine the value of your vehicle and then compare it to the cost of insurance. If your car were totaled, the insurance company would only pay the fair market value minus any existing damage and your deductible. Experts generally agree that if annual premiums are 10% or more than the payout, then it might not be worth paying full coverage.

Questions frequently asked

Which is better: Comprehensive or collision?

Both collision and comprehensive cover are different, so neither one is better than the other. You can choose to have both collision and comprehensive coverages if you don’t need them. If you are hit by another vehicle or object or someone else hits your car, collision coverage may pay. Comprehensive also covers vandalism and theft as well as weather-related events.

When is it appropriate to drop collision coverage?

The decision to end collision coverage for your vehicle is up to you. However, the rule of thumb is that the annual premium cost should not exceed 10% of the car’s actual value. If your car has some market value, and you can’t afford to repair or replace it, then you might want to keep collision coverage. If you don’t want to drop coverage completely, you can increase your collision deductible.

Do I need comprehensive insurance for an older vehicle?

The average premium for comprehensive insurance is half that of collision insurance according to the NAIC database. It costs about $168 and $378 respectively, as per the latest NAIC database report. It may not be financially prudent to continue with comprehensive coverage if the cost of comprehensive insurance on an older vehicle is significantly higher than its market value.

Even if you don’t want collision coverage, you can still choose to have comprehensive coverage for an older vehicle. Comprehensive coverage can provide some coverage in certain situations, but it does not cover damage to your car if your car is hit or struck by another vehicle or object.