Do you get comprehensive and collision insurance confused? Don’t worry — many people do. Both comprehensive and collision are types of car insurance that cover damage to your vehicle. But there are some important differences to understand. Let’s take a look at how these coverages help protect your vehicle from the unexpected. Show
What Is the Difference Between Comprehensive and Collision Car Insurance?While both coverages help you when your vehicle is damaged the key is understanding how they cover different situations. Comprehensive steps in when your car is damaged from a storm, a theft, hits an animal and other incidents that are beyond your control and typically don’t involve another vehicle. Collision insurance is for those times when your vehicle hits something, like another car or an object. In a nutshell, comprehensive is used when something other than a car damages your car, while collision is your go-to when your car hits something. Of course there’s more to it than that, so let’s take a closer look at the differences between comprehensive and collision insurance. What Does Comprehensive Insurance Cover?Comprehensive car insurance pays for damage caused by accidents that don’t involve colliding with another vehicle or object. For example, comprehensive covers you from:
Is Comprehensive Car Insurance Required?Comprehensive insurance isn’t required by any state, but it typically is required by your lender if you have a loan or a lease. What Does Collision Insurance Cover?On the other hand, collision car insurance helps cover damage to your vehicle if it was in an accident with another vehicle or an object. It also kicks in whether you were at-fault or not. Here are some example of how collision insurance protects your vehicle:
In these situations, collision coverage will help with the out-of-pocket expenses of repairing or replacing your car. It doesn’t cover medical expenses or damage to other vehicles. That’s what medical expense coverage and damage liability coverage are for. Like comprehensive insurance, collision isn’t required by any state but it’s often required by the lender if you have a lease or loan. Our at-a-glance chart demonstrates when collision insurance kicks in or your comprehensive insurance plays a part. 7 Min Read | Jul 14, 2022 It’s easy to confuse them. They both start with the letter “C” and they’re both types of car insurance that cover damage to your car only, but that’s where their similarities end. To add to the confusion, car insurance companies usually bundle comprehensive and collision insurance together. So, what’s the difference between collision vs. comprehensive car insurance? Get ready for one of those explanations that when you hear it, you realize, oh, that makes perfect sense! Let’s go over the basics and clear up the confusion.
What Is Comprehensive Insurance?The simplest way to explain comprehensive car insurance is to say that it covers damage—to your car only—that’s caused by something other than a collision with another car.  Don't let car insurance costs get you down! Download our checklist for easy ways to save. It could be a natural disaster, theft, damage from hitting an animal, vandalism, act of terrorism or a falling object. So, if your car gets damaged in a tornado, is stolen from the airport long-term parking lot, or your new paint job gets “keyed,” you’d be covered by comprehensive insurance. (Extremely unlucky but covered!) Comprehensive insurance events are sometimes referred to as “acts of God” since you have no control over them. Most likely, you’re not even around when they happen. The main benefit of comprehensive insurance is to give you peace of mind and financial protection if something really unlucky happens to your car. What Is Collision Insurance?Collision insurance covers repair or replacement costs—to your car only—if you cause damage to your car by colliding with another vehicle or an object like a tree, fence or traffic barrier. A good way to remember this type of insurance is that you have control over the collision. (Side note: Hitting a deer or other animal is covered by comprehensive. It might seem like it’d fall under collision but think of it like this: The deer is running into you. You don’t have control over that.) Let’s say you sideswipe a guardrail at high speed. If you have collision insurance all you’re responsible for is paying your deductible, and your insurance company will cover the cost to repair your car. The main benefits of carrying collision insurance are peace of mind that you won’t have to pay high repair costs, and typically, that you won’t have to deal with another driver’s insurance company. What’s the Difference Between Comprehensive vs. Collision Insurance?The main difference between collision vs. comprehensive insurance is that collision insurance covers damage caused when the driver is in control of the car, while comprehensive coverage generally covers events that are out of the driver’s control. Let’s use a tornado to illustrate the difference between collision vs. comprehensive insurance. Imagine the following two scenarios:
In scenario one, since you did not have control over the falling couch, your insurance company would reimburse you for damages to your car under your comprehensive car insurance. In scenario two, you did have control over your car in that situation, so your insurance company would reimburse you for damage to your car from the street pole under your collision coverage. What Do Comprehensive and Collision Insurance Cover?Together, comprehensive and collision insurance (combined with the required liability insurance) is called full coverage. Here’s a chart that shows what comprehensive and collision insurance cover individually. Do I Need Comprehensive and Collision Insurance?If you’re wondering whether both types of coverage are necessary, the answer is almost always yes. Both types of damage are common, so we do recommend carrying comprehensive and collision insurance in most cases. Here’s why. Your Financial SituationIf your car is totaled, can you afford to replace it without going into debt? It’s an unpleasant thought, but car accidents happen all the time. If your answer is no, then that’s a risk you don’t need to take. Get comprehensive and collision coverage so the insurance company can help with your car’s replacement cost and you can keep your emergency fund for another time. The only exception to this is if your car is paid for and not worth very much, and you could easily afford to replace it. In that case, you could skip comprehensive and collision.” Your Driving HabitsDo you have a long commute to work or a relationship with someone in a different city? If so, keep in mind (as you’re stuck in freeway traffic, yet again) that the more you drive, the higher the risk of damage to your car, and the more likely you need to buy comprehensive and collision insurance. Where You LiveYour location has a lot to do with buying car insurance coverage. Even if you don’t drive that often, if you live in an area that has a high crime rate or is prone to natural disasters, you should at least buy comprehensive insurance. How Your Car Is FinancedIf you lease or finance your car, the lender will most likely require that you carry comprehensive and collision insurance. Lenders want to make sure they’re not at risk if your car is totaled or stolen, and you walk away from your loan or lease. If you own your car (the better financial choice!), you’re not required by law to carry comprehensive or collision insurance, but again—if you can’t afford to pay to repair or replace your car on your own, it’s too risky to go without the right coverage. How Much Does Comprehensive and Collision Insurance Cost?In general, collision insurance is more expensive than comprehensive insurance because collision claims are more frequent than comprehensive claims. Let’s look at the average rates in each state.
* Statistics are from the National Association of Insurance Commissioners Get the Best Coverage for the Best PriceWe recommend carrying both comprehensive and collision insurance. Yes, the two types of coverage are different, but they’ll both protect your emergency fund in the event of significant damage to your car. Connect with one of our Endorsed Local Providers (ELPs) who can find the best rates for comprehensive and collision insurance in your state. Our ELPs are independent agents, meaning they can work for you, not the insurance company.
About the author Ramsey Solutions Ramsey Solutions has been committed to helping people regain control of their money, build wealth, grow their leadership skills, and enhance their lives through personal development since 1992. Millions of people have used our financial advice through 22 books (including 12 national bestsellers) published by Ramsey Press, as well as two syndicated radio shows and 10 podcasts, which have over 17 million weekly listeners. Learn More. Is comprehensive and collision insurance the same as full coverage?Full auto coverage includes comprehensive and collision insurance, in addition to any optional coverages you need and your insurer offers. In the instance of an accident, it provides financial protection against damages to your vehicle and occupants, as well as damages to the other party's vehicle and passengers.
Does collision mean full coverage?Collision Insurance covers damage to your vehicle in the event of a covered accident involving a collision with another vehicle. This may include repairs or a full replacement of your covered vehicle.
What is not covered in comprehensive car insurance?What damage is not covered by comprehensive coverage? Comprehensive coverage does not cover damages caused by hitting another vehicle or object. These incidents are covered under collision coverage. It will also not cover normal wear and tear on your vehicle.
Is collision and comprehensive worth it?Having comprehensive and collision coverage can provide vital extra protection, especially if you are leasing or financing your car or driving a high-value vehicle. You can drop comprehensive and collision coverage if you have a low-value car, or you can afford to pay out-of-pocket in the event of a total loss.
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What is the difference between collision and comprehensive car insurance
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