Auto insurance is designed to protect vehicle owners against financial losses in the event that they are involved in an accident or if their vehicle is damaged in some way. It is, effectively, a contract between a vehicle owner and an insurance company where premiums are paid in exchange for protection against financial losses.
In the United States, insurance for automobiles has been available since the late 19th century. Today, there are a number of different types of auto insurance. In this blog post, we will look at two of the most popular options and pit them against each other: collision versus comprehensive insurance.
We will highlight the definition of both types of insurance, their benefits, and how they differ from one another. This will allow you to make an informed decision when the time comes to purchase or renew your auto insurance. Let’s get started.
What Is Comprehensive Insurance?
Comprehensive insurance is a type of auto insurance that helps owners pay to repair or replace their vehicle if it has been stolen or sustained vehicle damage in an accident that was not a collision. It is sometimes referred to as “other than collision coverage” for this reason. Typically, comprehensive insurance cover damages from the following events:
- Natural disasters (such as hurricanes, storms, hailstorms, and earthquakes)
- Vandalism and theft
- Fire, explosions, and civil commotions
- Failing objects
- Broken or shattered windshield or windows
- Damage from impact with animals
- Acts of terrorism
This type of insurance pays for damages caused by something besides a vehicle driving into something else, which are referred to as “acts of God or nature”. To give an example, a vehicle owner has no control over a falling branch that may damage their car.
As noted, comprehensive also covers theft. If your vehicle is stolen, this coverage will cover the cost of replacing it or, if it is recovered, the cost of repairing any damage.
It is generally subject to a deductible, which is the amount a person must pay before the coverage kicks in. To give an example, let’s imagine that a person has a deductible of $400 and their vehicle sustained $1,000 worth of damage following a hailstorm. The person would be responsible for $400 and the insurance company would cover the rest ($600).
The primary benefit of comprehensive insurance is that it offers peace of mind while a vehicle owner is away from their car. Even if their vehicle is stolen or severely damaged, they will be reimbursed.
What Is Collision Insurance?
Collision insurance, as the name suggests, is a type of coverage that helps vehicle owners to pay to replace or repair their car if it has been damaged in an accident with another vehicle or object. Other objects may include, for example, a tree, fence, or streetlight.
Examples of the types of damage that are covered by collision insurance include:
- Crashing into another car (or vice-versa)
- Driving in a stationary object
- Your vehicle flips over
- Crashing into a pothole or ditch
- A hit-and-run (if unable to use uninsured motorist coverage)
As with comprehensive insurance, this type of coverage has a deductible. This amount will be set when you purchase your policy. A higher deductible will result in lower monthly premiums.
The primary benefit of collision insurance is that vehicle owners won’t have to pay for high repair costs following an accident. With collision insurance, it is typically easy to initiate the repair process very quickly following a crash. This often isn’t the case if you are counting on the other driver’s liability coverage.
This type of coverage can also be used, in most cases, toward a rental car. This can save drivers from the need to purchase rental car insurance.
What’s Different Between Collision Versus Comprehensive Insurance?
Really, the main difference here comes down to the driver’s control over the car accident. Collision insurance covers events that are within a driver’s control or when another car collides with theirs. Comprehensive insurance, on the other hand, covers “acts of God or nature”, which are out of a person’s control while driving.
Let’s look at one example to give you a better understanding of the differences. Imagine that there was a storm and two different events happened: one, a tree branch fell on your vehicle; two, a motorist swerved to avoid a falling tree branch, resulting in a car into a streetlight.
In the first example, the driver had no control over the falling of the tree branch. This is an example of an accident that is covered under comprehensive insurance.
In the second example, the driver was forced to swerve their car, resulting in a collision. In this instance, their collision insurance pays for the damages to their vehicle.
In terms of cost, collision insurance is generally more expensive. That said, it is common for motorists to purchase both types of insurance together, given the undoubted benefits of both.
Collision Versus Comprehensive Insurance: The Bottom Line
According to the Insurance Information Institute, around 75% of all drivers in the United States buy collision insurance, while 79% buy comprehensive insurance. If you are unsure which insurance option you should purchase for your vehicle, it is recommended that you speak to a reputable experienced auto insurance company. They will help you to understand the most suitable option for your vehicle.
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