When reviewing your auto insurance policy, you’ve probably come across the terms “comprehensive” and “collision” coverage. While these two coverages are often grouped together, they actually protect your vehicle in very different situations.
Understanding the difference can help you make informed decisions about your auto insurance and avoid unexpected surprises if you ever need to file a claim.
What Is Collision Coverage?
Collision coverage helps pay to repair or replace your vehicle if it’s damaged in an accident involving another vehicle or object, regardless of who is at fault, subject to your policy’s terms and deductible.
Some common examples of situations where collision coverage may apply include:
- Rear-ending another vehicle
- Hitting a guardrail, fence, or telephone pole
- Colliding with another vehicle at an intersection
- Accidentally backing into an object
- Rolling your vehicle in an accident
For example, let’s say you accidentally back into a pole in a parking lot and cause $3,000 in damage to your vehicle. If you have collision coverage with a $500 deductible, your insurance may pay $2,500 toward the covered repairs, leaving you responsible for the deductible.
Without collision coverage, you would generally be responsible for paying for repairs to your own vehicle in this situation.
What Is Comprehensive Coverage?
Comprehensive coverage, sometimes called “other than collision” coverage, helps protect your vehicle against certain types of damage that aren’t caused by a collision.
Common examples of covered incidents may include:
- Theft or vandalism
- Hail and storm damage
- Falling trees or branches
- Fire
- Hitting a deer or another animal
- Certain types of glass damage
For example, imagine a severe thunderstorm moves through Middle Tennessee and a tree branch falls onto your parked vehicle, causing $4,000 in damage.
If you have comprehensive coverage with a $500 deductible, your insurance may cover the remaining $3,500 in eligible repairs.
It’s important to remember that comprehensive coverage doesn’t mean every possible type of damage is covered. Your specific policy will determine what is and isn’t included.
Do I Need Both Comprehensive and Collision Coverage?
Whether you need both coverages depends on your vehicle, financial situation, and personal preferences.
If you’re financing or leasing your vehicle, your lender will typically require you to carry both comprehensive and collision coverage.
If you own your vehicle outright, these coverages are generally optional. However, that doesn’t necessarily mean removing them is the best decision.
Consider how much your vehicle is worth and whether you could comfortably afford to repair or replace it following an unexpected accident.
How Do Deductibles Work?
Both comprehensive and collision coverage typically have deductibles. A deductible is the amount you’re responsible for paying toward a covered claim before your insurance pays the remaining eligible amount.
For example, if you have a $1,000 collision deductible and your vehicle sustains $5,000 in covered damage, your insurance may pay $4,000.
Choosing a higher deductible can often lower your insurance premium, but it also means you’ll have a larger out-of-pocket expense if you file a claim.
Some policies may offer different deductibles for comprehensive and collision coverage, so it’s important to review both.
What About Liability Insurance?
One of the biggest misconceptions about auto insurance is that having liability coverage means your own vehicle is protected.
Liability insurance generally helps pay for injuries or property damage you cause to others in a covered accident. It does not typically pay to repair your own vehicle.
Comprehensive and collision coverage are designed to help protect your vehicle itself.
Understanding Your Auto Insurance Coverage
Auto insurance isn’t one-size-fits-all. The right combination of coverages depends on your vehicle, budget, and the level of financial protection you’re comfortable with.
At Davis Insurance Agency, Inc., we believe understanding your policy is just as important as having one. Knowing the difference between comprehensive and collision coverage can help you make more confident decisions about protecting your vehicle.