Comprehensive vs. Collision Insurance: Key Differences Explained

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What Is Comprehensive Insurance?

Comprehensive insurance covers the cost of repairing or replacing your car if it’s stolen or damaged in incidents where you aren’t at fault. This type of insurance is often required if you finance or lease your car, but it’s optional if you own your car outright. Many car owners choose to add this coverage: 79% of insured drivers purchase comprehensive insurance in addition to liability insurance, according to the Insurance Information Institute (III).

Understanding Comprehensive Insurance

Comprehensive car insurance provides financial protection for your vehicle in situations beyond your control, such as natural disasters and theft. You can add comprehensive coverage to an existing policy, but it typically cannot be purchased as standalone coverage. When you file a comprehensive insurance claim, you’ll pay the deductible you selected when you took out the policy, and your insurance company will cover the remaining costs up to the car’s current value.

What Comprehensive Insurance Covers

While you should always review your policy for specific details, comprehensive insurance generally covers incidents such as:

• Fire
• Explosions
• Theft
• Damage resulting from theft
• Windstorms
• Floods
• Hail
• Vandalism
• Contact with an animal
• Glass breakage
• Windshield damage
• Falling objects
• Lightning
• Earthquakes
• Violence from civil unrest or riots

What Comprehensive Insurance Does Not Cover

Comprehensive coverage usually does not cover damage from the following incidents:

• Accidents with another vehicle
• Hitting another object
• Your car rolling over
• Wear and tear
• Mechanical problems
• Items stolen from your vehicle
• Liability or medical costs
• Damage from potholes

Comprehensive vs. Collision Insurance

Collision insurance covers the cost of repairing or replacing your car if it’s damaged in a collision with another vehicle or object. Comprehensive insurance, on the other hand, covers almost everything else that can happen to your car, except for collisions. Collision insurance typically costs more, averaging $290 per year, compared to $160 per year for comprehensive coverage, according to the III.

Do You Need Comprehensive Insurance?

Comprehensive insurance is not legally required in any state, so if you own your vehicle outright, you can choose whether to purchase this coverage. You might consider comprehensive insurance if:

• You park your car on the street or in a high-crime area.
• Your area is prone to natural disasters like hurricanes and wildfires.
• You frequently encounter animals while driving.
• You drive an expensive car.
• You don’t have the funds to repair or replace your car if it’s stolen or damaged.

If you lease or finance your car, your lender may require you to have comprehensive and collision coverage. Once you pay off the car, you can decide whether to keep comprehensive insurance. A common rule of thumb is to drop comprehensive and collision coverage if your car is worth less than 10 times the annual premium for both coverages combined.

How Much Does Comprehensive Insurance Cost?

The average cost of adding comprehensive coverage to a policy for one car is about $160 per year, according to the III. However, prices vary among insurance companies, as each provider has its own formula for setting rates. Factors such as your age, ZIP code, and gender also influence your premium. When you get quotes for car insurance, the company should break down the cost of each type of coverage you’re considering, allowing you to compare prices and find the best deal.

How to Get Comprehensive Insurance

Getting comprehensive insurance is straightforward. You can add the coverage to your existing policy or gather auto insurance quotes that include comprehensive coverage and compare them side by side. Ensure you choose the same coverages for each quote to make a fair comparison. A basic car insurance policy includes the minimum coverage your state mandates, while a full coverage policy typically includes liability coverage as well as comprehensive and collision insurance. Insurers may also offer add-on services like roadside assistance, gap insurance, and coverage for substitute transportation while your car is in the shop.

The Bottom Line

Comprehensive car insurance can be a valuable way to protect your vehicle financially. It covers the cost of repairing or replacing your car if it’s stolen, vandalized, or otherwise damaged by an incident outside your control. The cost of comprehensive car insurance varies with each insurance company and policyholder, but there are ways to reduce your costs. For instance, some states allow insurance companies to use credit-based insurance scores when setting premium rates. If your state allows this practice, consider improving your credit before buying car insurance. Start by checking your credit report and credit score for free with Experian and addressing any issues you find on your report.

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