Knowing the difference between comprehensive policies and collision policies is an important step in choosing the right financial protection for your vehicle. Both cover physical damage to your car, but each works in specific situations.
So how do you know if property and casualty 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 looking for auto insurance, we recommend comparing free quotes from some of the top auto insurance companies to find the best rates. Enter your zip code above to get started.
Full vs. Collision Insurance: Key Differences
What separates comprehensive coverage from collision coverage is when coverage kicks in. Collision coverage pays to repair your vehicle if it is damaged in a collision with another car, building or an object. Comprehensive auto insurance covers your vehicle if you hit an animal or if it is damaged while parked, such as in the event of a natural disaster or vandalism.
It is important to note that comprehensive and collision policies only cover your own vehicle. They won’t cover any of your medical bills, or damage to other people’s vehicles or property after an accident.
You may hear about insurers offering comprehensive auto insurance, which is a combination of comprehensive auto, collision, and liability coverage.
When you compare comprehensive insurance and collision insurance, you will find many differences. But the amount your insurer will pay per claim is the same. The maximum amount a policyholder will pay you per comprehensive claim or collision is the actual cash value (ACV) of the car before it was declared a total loss, minus your deductible.
A car is said to be totaled if it cannot be repaired to safe driving standards or if the cost of the necessary repairs exceeds the value of the car. Forbes recently reported that between 2000 and 2017 the cost of vehicle repairs increased by 61.07% due to high-tech parts in new cars, so your car is more likely than you think to be declared. total loss after an accident.
What is the cost of Full Vs. Collision coverage?
Looking at the prices of comprehensive insurance compared to collision insurance, comprehensive coverage is generally less expensive. According to the most recent data from the National Association of Insurance Commissioners (NAIC), the average cost of collision insurance in the United States in 2017 was $363.08, while comprehensive auto 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 the age and mileage of your car, your driving history and your credit score.
The amount of your deductible generally also influences the insurance quote. An auto 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 generally result in a higher monthly premium, but you’ll pay less when you need repairs.
Do you need all-risk and collision insurance?
No Comprehensive Coverage or Collision Coverage is required for you to hit the road in any state. Usually the value of a comprehensive insurance policy depends on the value of your car. When considering comprehensive coverage or collision coverage, here are some key things to consider:
If you take out a loan to purchase a vehicle, your lender may require you to purchase both comprehensive and collision damage waiver. This is how the lender can collect payment for the value of the vehicle in the event of theft or if the car is totaled.
Continuing to pay for collision and full coverage will be up to you once your car loan is paid off.
Another reason to purchase or continue to pay comprehensive collision and risk insurance is if your car has high repair costs. Replacement parts for a luxury car brand like Porsche will likely be priced higher than parts for a Hyundai and could easily outrun a franchise. If you have collision or comprehensive coverage and own an expensive car, your policy could pay for itself after just a few repairs.
It’s no secret that cars depreciate over time. According to the Insurance Information Institute, many vehicles lose 20% or more of their value in the first year of ownership alone. This means that collision and comprehensive coverage become less valuable because an insurance company’s maximum payout decreases as your car’s CAV decreases. And if you have a high deductible, you might see even less money from the insurer.
So for a car that is over six model years old and has over 100,000 on the odometer, it may not be worth going beyond basic liability coverage. Kelley’s Blue Book is a good tool to use if you want to estimate the value of your car.
Our recommendations for car insurance
Whether you’re bolstering 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 the best insurers in your area, or keep reading to see why Liberty Mutual and AAA are two companies our review team recommends.
Liberty Mutual can be a great option for new drivers, as it offers plenty of discounts for young people. We rate the company 4.5 stars out of 5.0 overall, and it also has an A+ rating from the Better Business Bureau (BBB). Liberty Mutual not only offers collision and comprehensive insurance, but also other optional policies such as new/better car replacement and accident forgiveness insurance.
Check out our Liberty Mutual auto insurance review to learn more.
Although usually associated with some of the best roadside assistance plans in the industry, AAA also offers insurance policies to its members. It’s important to know that coverage options and AAA service may differ from state to state, but collision and comprehensive coverage are among the company’s basic auto insurance options. Keep in mind that to get AAA coverage, you will need AAA membership. Membership fees are approximately $40 to $165 per person per year, depending on location.
Read our AAA insurance review to learn more.
In an effort to provide accurate and unbiased information to consumers, our team of experts collects data from dozens of car insurance providers to compile rankings of the best insurers. Companies receive a score in each of the following categories, along with an overall weighted score of 5.0 stars.
- Industry ranking: Insurers with strong financial ratings and customer-focused business practices receive the highest scores in this category.
- Availablity: We consider availability by state as well as exclusions for specific groups of drivers.
- Cover: This rating is based on the types of insurance available, maximum coverage limits and supplemental policies.
- Cost and discounts: Our research team examines auto insurance rate estimates generated by Quadrant Information Services for a variety of drivers in every state. Companies with lower prices and many car insurance discount opportunities receive the highest scores.
- Customer service: We look at customer reviews and consumer feedback studies from experts like JD Power.
Technology: Auto insurers with mobile apps, advanced online services and telematics are more likely to meet consumer needs.