Collision vs. Comprehensive Car Insurance

These two terms are often misunderstood, but make no mistake, they are vastly difference when it comes to getting reimbursement for damages from your insurance company. So it's important to know the difference, and make sure you're adequately covered.

Definition: Collision Car Insurance
Collision car insurance coverage for your car when it gets in a crash with another car or crashes into property. For example, damage to your vehicle when you crashing into another vehicle, another vehicle colliding with yours, or ramming into a street light, pole, or some other structure. So Collision will cover the cost of repairs or replacements to your own car (liability coverage takes care of damages to other people's property).

Do You Need Collision Insurance?
It is recommended that people have collision insurance if the sum of the premiums paid in five years is greater than what your car is worth. So if you are paying an extra $500 a year for collision insurance, you would spend $2,500 in five years. Now if your car is not worth $2,500 currently, it will be worth even less in five years. This means you would have spent more on insurance than what your car is actually worth. If you are leasing or financing your car, we highly recommend collision insurance, as well as gap insurance.

Comprehensive Car Insurance: What is Comprehensive Coverage?
While collision insurance will cover the costs associate the your car's damage as a result of an accident, sometimes there is car damage as a result of something different than an accident. Think of it as coverage for damaged cause NOT by a collision.

Types of Damages Covered Under Comprehensive Auto Insurance (examples are):
-Natural disasters: storms, tornadoes, hurricanes, earthquakes, hailstorms
-Fire, civil commotions, explosions
-Vandalism and theft
-Damage from impacts with animals
-Broken / shattered windows and windshield
-Falling objects
-Terrorism
-Acts of God


Collision vs. Comprehensive Car Insurance: The Difference
So basically, collision covers events within a your control, or when another vehicle collides with your car. And Comprehensive covers things that can be classified as "acts of God or nature", and are typically out of your control (a deer jumping in front of you, a heavy hailstorm, a car jacking, etc). To be more precise, if the damage was completely unavoidable, we're looking at Comprehensive, but if you are driving and damage was a result of you trying to avoid something unavoidable then Collision. So a heavy tree branch falling on your car, Comprehensive. Crashing into a tree when swerving to avoid a falling tree trunk, Collision.

The costs associate with "acts of God" can be quite high. Since this type of damage is out of your control, we want to stress the importance of having some level comprehensive coverage to help when such things occur.

Is Comprehensive Car Insurance Worth It? Do I Need Comprehensive Coverage?
So does having a comprehensive policy worth it for you? It really depends on these factors:

Does your state or auto financing loan require you to have it? Then easy answer: yes.

How old is your car?

Just like Collision, evaluate what your car is worth. Avoid comprehensive if the premiums will cost more than your car is worth over the next 5 years.

If your car is new? then, yes, you should get comprehensive car insurance.


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