Comprehensive vs. collision insurance
Determine the best auto coverage for your unique needs
With the exception of just a few states, car insurance is required for every motor vehicle owner. Liability protection, which covers the cost of injuries or damages to other vehicles and drivers if you’re at fault for an accident, is the standard coverage. But what about accidents under other circumstances?
You have the option to add comprehensive or collision insurance, which covers the repair or replacement of your vehicle up to market value, to your preexisting policy. Collision coverage protects you financially in the case of a wreck with another driver; comprehensive covers other unexpected incidents.
Key insights
- Comprehensive insurance covers damages from noncollision events like theft, vandalism and natural disasters, while collision insurance covers damages from collisions with vehicles or objects.
- Deductibles significantly impact your insurance premiums; increasing your deductible lowers your premium, and paying a smaller deductible raises your premium.
- When you’re making auto insurance decisions, it’s crucial to consider the value of your vehicle, your risk tolerance and your current (and future) financial situation.
What does comprehensive insurance cover?
Comprehensive insurance covers any damages made to a vehicle due to noncollision events such as theft, natural perils and falling objects. This means your comprehensive insurance policy should cover you if, for instance, your car is stolen, damaged during a storm or hit in the windshield by a rock on the highway.
Comprehensive coverage provides financial assistance if your car falls victim to various natural or human-related hazards (but not collisions with other drivers).
With a comprehensive policy, you can have confidence that your insurance will cover the following damages:
- Theft
- Vandalism
- Fire and explosions
- Civil disturbances and riots
- Natural disasters
- Falling objects (e.g., tree branch, flying rock)
- Contact with an animal
In 2019, this coverage was purchased by 79% of insured drivers, according to an analysis of data from the National Association of Insurance Commissioners (NAIC) by the Insurance Information Institute.
What comprehensive insurance doesn't cover
Before purchasing comprehensive insurance, ensure you understand the policy and any restrictions. Though this type of coverage helps with many incident claims, it doesn’t cover collisions with other vehicles or stationary objects, personal items stolen from inside the car or normal wear and tear.
Comprehensive coverage also doesn’t cover legal bills, lost income or medical bills associated with the covered damages above. This would have to come from your liability insurance. It won’t cover mechanical breakdowns either — that’s what a car warranty is for.
» COMPARE: Best extended car warranty companies
What does collision insurance cover?
As the name suggests, collision insurance covers vehicle repairs or replacements from collisions, regardless of fault. This accounts for the following perils:
- Collisions with other vehicles
- Collisions with stationary objects (e.g., telephone pole, mailbox, pothole)
- Single-car accidents that involve rolling or falling over
Collision insurance may also help cover the cost if another car hits you but the driver doesn’t have enough insurance to pay for your repairs. This is one reason this coverage is popular among drivers (75% of insurance holders in 2019 also got this coverage, according to the analysis of NAIC data by the Insurance Information Institute). So, if you accidentally hit another car or a tree, for example, rest assured this insurance will cover most of the costs.
What collision insurance doesn’t cover
As with comprehensive insurance, collision policies don’t cover all scenarios. Anything covered by comprehensive insurance, like natural disasters, theft, vandalism and other damages, isn’t included in collision coverage.
Collision insurance only covers damages to your vehicle — it doesn’t cover bodily injuries or damage to other cars or stationary objects. These are generally covered by liability insurance.
» READ MORE: Best car insurance companies
Comprehensive vs. collision insurance cost
Collision insurance is usually more expensive than comprehensive insurance because of the higher probability of collision-related damages and higher costs of related repairs or replacements.
According to the NAIC, average annual insurance premiums for collision insurance are more than double the premiums for comprehensive coverage. In a 2023 report, the NAIC stated that national collision insurance premiums averaged $370.73 per year in 2020, while comprehensive insurance premiums averaged $174.26.
The cost of your insurance depends on several key factors, including your vehicle, your location, your driving record and the deductible you select.
- Vehicle: The year, make and model of your vehicle influences the premium rates you pay — typically, the more expensive your car is, the higher the premium.
- Location: Insurance companies consider your local crime and accident rates in addition to the population density in your area.
- Driving record: Your driving record plays a big part in indicating how much of a liability you are to insurers. A history of multiple accidents or violations may increase your insurance costs.
- Deductible: The deductible you select will determine how much your insurer covers and how much you pay out of pocket for a claim. Having a lower deductible typically translates to a higher premium.
» LEARN: How to get cheap car insurance
Comprehensive vs. collision deductibles
An auto deductible is the amount you have to pay out of pocket for a collision or comprehensive claim before the insurer pays.
Brian Fussel, the owner of Riverbend Insurance Agency in Denver, explained how a deductible affects your premium regardless of the coverage type: “If you have a $500 deductible and file a claim for $2,000 in damages, you would pay $500, and your insurer would cover the remaining $1,500. Generally, higher deductibles lead to lower premium costs and vice versa.”
If having lower premium costs are your priority, you may opt for a higher deductible, depending on your financial situation. Deductibles on car insurance range anywhere from $200 to $2,500 — be sure to shop around and choose a deductible you’re comfortable paying upfront.
How to choose between comprehensive and collision insurance
It’s worth noting that when leasing a vehicle, lenders typically require full-coverage insurance (liability, comprehensive and collision). But if you own your car, how do you determine which coverage is right for you?
Choosing the best premium “largely comes down to your financial situation and risk tolerance,” Tyler Grizzle, a partner at GSP Insurance Group, based in Bluffton, South Carolina, told us. “If you’re driving a brand-new luxury vehicle, you’ll likely want both comprehensive and collision to ensure you’re covered for any possible scenario.”
If you’re driving a brand-new luxury vehicle, you’ll likely want both comprehensive and collision to ensure you’re covered for any possible scenario.”
With older vehicles, however, you may want to consider something less than full coverage. “If your car is totaled, the insurer will only pay you the current market value of your car, which might now be much for an older vehicle,” Grizzle added.
Depending on your particular circumstances, comprehensive, collision or both coverages might make sense for you.
FAQ
What happens if I only have collision insurance and my car is stolen?
Collision insurance doesn’t cover theft of a vehicle. If you only have collision insurance and your car is stolen, the insurance cover will not help you cover the financial loss.
Can I have both comprehensive and collision insurance?
Yes. In fact, it’s common for drivers to have both types of coverage — especially given that lenders usually require full coverage. If you have a newer, more valuable vehicle and are in a good financial position, opting for both comprehensive and collision insurance might be smart.
Is it worth having comprehensive and collision insurance for an older car?
Whether it’s worth it to have these coverages depends on your car’s worth and if the damage costs may outweigh its value. “If the cost of comp and collision exceeds 10% of your car’s value, you might consider dropping them,” Grizzle, from GSP Insurance Group, explained. Essentially, this means what you pay for coverage annually should not exceed 10% of the book value of your vehicle, minus the deductible. If your premium does exceed 10%, it may be wise to carry only liability insurance.
How does the deductible affect my insurance premium?
Increasing your insurance deductible generally lowers your insurance premium. On the other hand, a lower deductible typically means a higher policy cost.
Is comprehensive insurance the same as full-coverage insurance?
Comprehensive insurance is part of full-coverage insurance, but it’s not the same. Full coverage typically includes liability, collision and comprehensive insurance. Reach out to an insurance agent or specialist for help assessing the most suitable coverage options for your needs.
Bottom line
Comprehensive and collision insurance are policy additions that safeguard you from the cost of repairing unforeseen damage to your vehicle. Before deciding on one or the other (or both), ensure that the coverage and premiums align with the level of protection you need and your budget. Consider your specific circumstances, and consult with an insurance agent or specialist for guidance if necessary.
Article sources
- National Association of Insurance Commissioners, “ 2019/2020 Auto Insurance Database Report .” Accessed July 19, 2023.
- Insurance Information Institute, “ Facts + Statistics: Auto insurance .” Accessed July 19, 2023.
- Insurance Information Institute, “ What determines the price of an auto insurance policy? ” Accessed July 19, 2023.
