Comprehensive vs. Collision insurance: What’s the Difference?
Posted by Miller Hanover Insurance Agency on
Both comprehensive and collision insurance are two important types of automobile insurance policies. Although both are not legal requirements in any state (especially if you’re an outright owner), they help car owners in unexpected difficult situations. They have similarities, such as paying or compensating you for a damaged or stolen car.
However, these two are different in several ways. In this post, we will dig deep into what each policy entails. So if your search for comprehensive vs collision has led you to this page, then you are in luck! So sit back and read on.
What is Comprehensive Insurance
Comprehensive insurance is an insurance plan designed to help the car owner pay for damages to your vehicle. It covers unexpected damages resulting from bad weather, theft, riots, fires, fallen trees, floods, explosions, or animal crashes.
Comprehensive insurance does not cover medical bills due to a vehicle accident. It also doesn’t cover damages to your vehicle or someone else’s vehicle due to collision. Hence, if the damage caused to your car results from a collision, don’t expect your comprehensive insurance to cover the cost of fixing it.
When buying comprehensive insurance, there’s a need to choose a deductible. This is the amount you are expected to pay towards a covered claim. Another important thing to note is that comprehensive insurance only covers damages to you or your vehicle. It doesn’t cover damages to others. However, if you are the cause of damage to others, such a claim will be categorized as auto liability coverage.
Comprehensive insurance can be expensive, especially when buying it in combination with collision insurance and a third party. Hence, a paid-off or old car may not require comprehensive insurance. You may also neglect it if theft is not a concern in your environment.
What is Collision Insurance
Collision Insurance is another auto insurance policy that covers the cost of your vehicle repair or replacement in the case of an accident involving an object or another vehicle. Although the state does not require it, collision insurance is typically required by lenders when financing or leasing your car.
Collision Insurance covers repair or replacement costs after damage due to a collision with objects like a fence, a tree, or another vehicle. It also covers the cost of a fatal single-car accident, such as falling over or summersaults.
Importantly, collision insurance is not responsible for the costs of car damages that do not involve driving. Examples are damages due to theft, tornado, or fallen objects. It also doesn’t cover medical expenses (both you and your passengers) and damages to other people’s vehicles.
Just like comprehensive insurance, collision insurance also has a deductible that you pay from your pocket. Your insurer may give you different deductible amounts to choose from, ranging from $0 to $1000. It is also important to note that collision insurance has a limit.
Collision insurance can be worth it when your car is new or expensive. In this case, your annual insurance premium will be less than 10% of the car’s total value. However, in the case of an old and not-so-valuable car, buying collision insurance may not be worth it. You can contact your insurance provider if unsure of the value of your car.
Difference Between Comprehensive and Collision Insurance
The difference between comprehensive and collision insurance is majorly found in their policies. While comprehensive insurance covers damages from circumstances out of your control, like theft or bad weather and medical expenses, collision insurance covers damages resulting from a collision with other vehicles or objects.
With comprehensive insurance, you have to guide against avoidable events that can lead to the loss or damage of your vehicle. This is because if the insurer finds out that your carelessness led to the disaster, you may not get reimbursed.
So in cases such as forgetting the car keys in the car, forgetting to lock car doors and windows, or not using warning or tracking devices that help to prevent theft, it might not be easy to get insurance. However, collision insurance does not bother about who is at fault; therefore, you get reimbursed faster.
While you can buy comprehensive insurance either in combination with collision insurance and third-party liability or as standalone insurance, you cannot buy collision insurance as standalone insurance. You have to combine it with comprehensive insurance and third-party liability.
Average Cost of Comprehensive Insurance
In 2019, the National Association of Insurance Commissioners (NAIC) collected recent data that states that the average yearly comprehensive insurance for U.S drivers was $171.87. When the cost of comprehensive insurance was compared for different states, California had the cheapest cost of $96.53, while South Dakota had the most expensive cost of $347.61.
The cost of comprehensive insurance does not include a deductible, which is the amount you pay from your pocket. For comprehensive insurance, drivers are allowed to choose a deductible of their choice ranging from $500 to $1500. However, the higher your deductible, the lower your insurance premium.
Average Cost of Collision Insurance
The cost of collision insurance differs from state to state and from driver to driver. The driver’s age, driving record, marital status, and gender are some factors that determine the cost of collision insurance. However, according to 2019 data collected by the National Association of Insurance Commissioners (NAIC), drivers paid an average of $381.43 per annum.
Despite this average annual cost, different states have their average premiums. South Dakota drivers paid the cheapest average premium of $248.09, while drivers from Washington, DC, paid the most expensive average cost of $539.48.
Like comprehensive insurance, drivers also choose a deductible amount when they buy collision insurance. This amount ranges from $0 to $1000. Another way to reduce the average cost is by choosing a high deductible: the higher your deductible, the lower the average insurance premium.
In conclusion, weighing your options before buying comprehensive or collision insurance is always ideal. Your state, gender, age, driving experience, and records also influence the cost of both insurance costs. It’s also important to compare the rates with different insurance providers.
Miller Hanover Insurance is a leading Hanover auto insurance provider, with a wide selection of plans and policies to choose from. So if you are in need of affordable and effective insurance plans, feel free to check us out.