Comprehensive and collision insurance are common, but do you really need either policy?

 

Knowing the difference between comprehensive vs. collision policies is an important step in choosing the right financial protection for your vehicle. Both cover physical damage to your car, but each one works in specific situations. 

So, how do you know if comprehensive and collision policies are right for you? In this article, we’ll break down what each type of insurance covers to help you decide.

If you’re in the market for car insurance, we recommend comparing free quotes from a few of the best car insurance companies so you can find the best rates. Enter your zip code below to get started. 

 

In this article:

 

Comprehensive Vs. Collision Insurance: Key Differences

What separates comprehensive vs. collision insurance is when the coverage kicks in. Collision coverage pays to repair your vehicle if it is damaged in a collision with another car, building, or object. Comprehensive car insurance covers your vehicle if you hit an animal or if it is damaged while parked, like in the case of a natural disaster or vandalism.

It’s important to note that comprehensive and collision policies only cover your own vehicle. They won’t cover any of your medical bills, nor will they cover damages to other peoples’ vehicles or property after an accident.

You may hear of insurers offering full coverage auto insurance, which is a combination of comprehensive, collision, and liability car insurance.

How Much Do Comprehensive And Collision Policies Pay Out? 

When comparing comprehensive vs. collision insurance, you’ll find many differences. But the amount of money your insurer will pay out per claim is the same. The maximum amount a policyholder will give you per comprehensive or collision claim is the actual cash value (ACV) of the car before it’s declared a total loss, minus your deductible. 

A car qualifies as totaled if it can’t be repaired to safe driving standards, or if the cost of necessary repairs is more the value of the car. Forbes recently reported that between 2000 and 2017, the cost of vehicle repairs rose by 61.07 percent due to new cars’ high-tech parts, so it may be more likely than you think that your car is declared a total loss after an accident.

 


 

What’s The Cost Of Comprehensive Vs. Collision Coverage?

Looking at prices for comprehensive vs. collision insurance, comprehensive coverage is typically cheaper. According to the most recent data from the National Association of Insurance Commissioners (NAIC), the average cost of collision insurance in the U.S. in 2017 was $363.08, while comprehensive car insurance was $159.72 the same year. 

However, the cost of your own comprehensive or collision policy may differ, as car insurance rates are highly personalized. The cost of your car insurance policy will depend on factors such as your car’s age and mileage, your driving history, and your credit score. 

The size of your deductible usually influences an insurance quote as well. A car insurance deductible is the upfront cost you pay when filing an insurance claim. Common deductible amounts range from $250 to over $1,000. Choosing a lower deductible will typically lead to a higher monthly premium payment, but you’ll have to pay less out of pocket when you need repairs.

 


 

Do You Need Comprehensive And Collision Insurance?

Neither comprehensive coverage nor collision coverage is required for you to hit the road in any state. Usually, the value of a full coverage policy depends on the value of your car. When considering comprehensive vs. collision coverage, here are some key things to think about:

Are You Financing Your Car?

If you’re taking out a loan to purchase a vehicle, it’s possible your lender will require you to buy both comprehensive insurance and collision insurance. This is so that the lender can collect the payout for the value of the vehicle in the event of a theft or if the car is totaled. 

Continuing to pay for collision and comprehensive coverage will be up to you once your car loan is paid off. 

Is Your Car Expensive To Fix?

Another reason to purchase or keep paying for comprehensive and collision insurance is if your car has high repair costs. Replacement parts for a luxury car brand like Porsche will probably have a higher price point than parts for a Hyundai and could easily overshoot a deductible. If you have collision or comprehensive coverage and you own an expensive car, your policy could pay for itself after just a couple of repairs. 

How Old Is Your Vehicle?

It’s no secret that cars depreciate over time. According to the Insurance Information Institute, many vehicles lose 20% or more of their value within the first year of ownership alone. This means collision and comprehensive coverage become less valuable, as the max payout from an insurance company shrinks as your car’s ACV goes down. And if you have a high deductible, you could see even less money from the insurer. 

So for a car that’s over six model years old and has more than 100,000 on the odometer, it may not be worth going beyond basic liability coverage. Kelley Blue Book is a good tool to use if you want to estimate your car’s value.

 


 

Our Recommendations For Car Insurance

Whether you’re beefing up an existing policy or buying a new one, comparing quotes from different insurance agencies can help you make the best decision for your wallet. Use the tool below to start getting free quotes from top insurance providers in your area, or keep reading to see why Liberty Mutual and AAA are two companies our review team recommends.

 

Liberty Mutual: Best For Teens

Liberty Mutual Insurance logo

Liberty Mutual can be a great option for new drivers, as it offers numerous discounts for young people. We rate the company 4.0 out of 5.0 stars overall, and it also has an A+ rating from the Better Business Bureau (BBB). Liberty Mutual not only offers collision and comprehensive insurance, but other optional policies like new/better car replacement and accident forgiveness insurance

Check out our Liberty Mutual auto insurance review to learn more. 

AAA: Best For AAA Members

AAA Insurance logo

While commonly associated with having some of the best roadside assistance plans in the industry, AAA also offers insurance policies to its members. It’s important to know that AAA coverage options and service may differ from state to state, but collision and comprehensive coverage are among the company’s basic car insurance options. Keep in mind that in order to get coverage from AAA, you’ll need a AAA membership. Membership fees run about $40 to $165 per person annually, depending on location. 

Read our AAA insurance review to learn more.

 


 

FAQ: Comprehensive Vs. Collision

When should you drop collision and comprehensive coverage?

You can drop collision insurance and comprehensive insurance when you have finished paying off an auto loan. It’s also common to stop paying for full coverage insurance once a car has significantly depreciated in value.

What is the difference between collision and comprehensive coverage?

Collision insurance covers your vehicle repairs after an accident that you’re found at fault for, whether it’s a collision with another vehicle, an object, or a building. Comprehensive insurance covers your vehicle if it’s damaged while parked, if it is stolen, or if you hit an animal.

What is covered under comprehensive coverage?

Generally, comprehensive coverage pays to repair damage that happens while the vehicle isn’t moving. This can be an incident such as a tree fall, fire, vandalism, etc. It also covers you if you hit an animal or if your vehicle is stolen.

Is it worth having comprehensive coverage?

If you have a newer car and want it insured against theft or damage, comprehensive coverage might be a great investment. If you can afford expensive repairs or to replace your vehicle entirely, you may not need comprehensive coverage.

 


 

Methodology

In an effort to provide accurate and unbiased information to consumers, our expert review team collects data from dozens of auto insurance providers to formulate rankings of the best insurers. Companies receive a score in each of the following categories, as well as an overall weighted score out of 5.0 stars.

  • Industry Standing: Insurers with strong financial ratings and customer-first business practices receive the highest scores in this category.
  • Availability: We consider availability by state as well as exclusions for specific groups of drivers.
  • Coverage: This rating is based on types of insurance available, maximum coverage limits, and add-on policies.
  • Cost and Discounts: Our research team reviews sample quotes for a variety of drivers in every state. Companies with lower prices and many car insurance discount opportunities receive the best scores.
  • Customer Service: We comb through customer reviews and consumer feedback studies from experts like J.D. Power.
  • Technology: Auto insurers with mobile apps, advanced online services and telematics are more likely to meet consumer needs.