Comprehensive vs. Collision: Physical Damage Coverage Differences

Collision coverage pays to repair or replace your car after you crash into another vehicle or object, while comprehensive coverage covers other physical losses, like fire or theft. While often sold together and required if you’re financing or leasing your car, there is a difference between comprehensive and collision insurance in terms of the coverage they provide.

In this comprehensive versus collision insurance guide, you will learn more about what each type covers and whether you are required to buy them.

On This Page

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  What Is Comprehensive Insurance?

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  What Is Collision Insurance?

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  Comprehensive vs. Collision: Coverage and Requirements

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  Comprehensive vs. Collision: Costs

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  Do I Need Comprehensive and Collision Insurance?

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  How To Get Comprehensive and Collision Coverage

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  FAQs

What Is Comprehensive Insurance?

Comprehensive insurance is a type of coverage that provides you with a financial safety net in case your car is damaged by an unpredictable or uncontrollable peril, like fire or hail damage. With comprehensive coverage, your insurance company may reimburse you if a natural disaster destroys your car or someone steals your tires.

Here are some specific examples of situations where comprehensive coverage would kick in and provide you with financial support:

• Fire: Your engine overheats and catches on fire.
• Hailstorm: A chunk of hail breaks your windshield.
• Windstorm: High winds from a tornado or hurricane flip your car over.
• Theft: Someone steals your car and the police are unable to recover it. (If your insurance company pays out your claim and your vehicle is later recovered, the insurance company would then own the vehicle.)
• Vandalism: A disgruntled acquaintance keys the side of your car and punctures all of your tires.
• Civil disturbance: Rioters throw rocks through your car windows.
• Falling objects: A heavy tree branch falls on top of your car and causes the roof to cave in.
• Collision with an animal: A deer runs into your car while you’re driving, shattering your headlights and tearing off your front bumper in the process.

What Is Collision Insurance?

Collision insurance is a type of coverage that takes care of repairs to your vehicle after an accident that you are responsible for. While mandatory coverage in most states only pays for someone else’s bills after you cause a crash, collision insurance is the best way to ensure you won’t bear the full financial burden when it comes to your own repair bills.

Some examples of situations where collision coverage could take effect include:

• Collision with another vehicle: You fail to notice a stop sign and drive into the side of another car as a result.
• Collision with an object: You spin out after driving too fast on an icy road and crash into a guardrail.
• Single-car rollover: After coming up behind another car too quickly, you swerve to avoid rear-ending them and flip your car over in the process.

Comprehensive vs. Collision: Coverage and Requirements

Unlike liability coverage, which is meant to take care of the other person's losses if you're the at-fault driver, comprehensive and collision insurance covers damage to your vehicle. The biggest distinction between comprehensive and collision coverage is which types of physical losses are covered.

Below is an overview of how comprehensive and collision coverage work and what some of the similarities and differences are between them.

If your car is damaged in an accident caused by someone else and they have sufficient insurance coverage, your repairs would generally be covered by their liability insurance. However, if you need to pay for repairs as soon as possible, you could initially make a collision claim through your insurer, then get reimbursed later by the other driver’s provider after the investigation for determining fault is over.

A collision or comprehensive claim payout for a totaled or stolen car will be your car’s actual cash value, which factors depreciation factors like age or wear and tear.

Meanwhile, if you are injured in a crash or some other incident involving your vehicle, you will have to look to your health insurance, medical payments coverage or personal injury protection to cover medical expenses, depending on the situation.

Comprehensive vs. Collision: Costs

Comprehensive coverage cost $174.26 per year on average in 2020, while collision coverage cost $370.73. The average annual cost for a full coverage plan including liability, collision and comprehensive coverage was $1,176.18.^[2]

Your exact premium will depend on several different factors, including:

• Age and model of your car
• Your driving and claims history
• Loation
• Credit score
• Demographic factors like your age and gender

You may also be able to save on car insurance by raising your deductible, which is the minimum amount of money you have to pay before your insurance company will start chipping in toward covered losses.

For example, if your policy has a $500 deductible for collision coverage, then your insurance company would pay for any repairs exceeding $500 after you crash your car. Conversely, if you had a $1,000 deductible, you would have to pay more money out of pocket after a covered loss, but you would also get to pay less on your regular premium payments.

Do I Need Comprehensive and Collision Insurance?

Comprehensive and collision insurance are not state-mandated coverages but they are usually required by your lender or lessor if you are financing or leasing your car. Your loan or lease contract may refer to these two coverages as “physical damage” coverage or protection.

For drivers who own their cars outright, comprehensive and collision coverage are entirely optional. Still, adding one or both coverages to your auto policy does carry some situational perks.

Why Should You Consider Comprehensive Insurance?

Although you are not required by law to purchase comprehensive insurance, your lender will likely require you to do so if you are making payments on your car. Even if your car is paid off, comprehensive coverage is a cost-effective way to protect yourself from a number of perils.

Comprehensive insurance generally costs less than collision insurance and covers significantly more damaging events. Unlike a standard homeowners insurance policy, comprehensive insurance even accounts for natural disasters like floods and earthquakes.

Since you will have to pay a deductible before receiving money for a covered loss, comprehensive insurance doesn’t help when it comes to smaller repairs. However, if your car is stolen or totaled, comprehensive insurance can go a long way toward helping you buy another car.

Why Should You Consider Collision Insurance?

Like comprehensive coverage, collision insurance is optional if you fully own your vehicle. Nevertheless, it provides an important degree of protection in case you crash your car and there isn’t another person who can be held liable.

If someone else causes a wreck that damages your car, you can usually rely on their car insurance to cover the costs of your repairs. However, without collision insurance, you will have to pay for 100% of your own repairs out of pocket after an accident that you are responsible for.

While comprehensive and collision coverage are generally both wise investments, they may be less economical if you have an older or otherwise less valuable car. If you are looking to save money on car insurance, you could drop comprehensive and collision coverage if their combined premiums would cost more than 10 times the current value of your car.^[3]

How To Get Comprehensive and Collision Coverage

The simplest way to get comprehensive and collision coverage is to purchase full coverage car insurance, which includes both coverage types plus bodily injury and personal property liability coverage. It may also include other coverage types required by your state. For example, if you live in Kentucky, a full coverage policy might include personal injury protection, uninsured motorist coverage and underinsured motorist coverage along with liability, collision and comprehensive coverage.

You may also be able to purchase collision and comprehensive coverage separately if you decide you need one but not the other.

For example, if you are going on an extended vacation and no one will be driving your car for six months, it might not make sense to maintain your collision coverage. However, you may still want to have comprehensive coverage in case some sort of natural disaster damages your car.

Using an online insurance marketplace like SmartFinancial allows you to compare auto insurance rates for free without having to contact insurance companies individually. Once you have purchased a policy that suits your comprehensive and collision coverage needs, you can file a car insurance claim if your car suffers some type of covered physical damage.