Comprehensive and collision insurance are two of the most important types of car insurance to understand. They’re not legally required by any state, but they can come to the rescue in a variety of situations. Show
Collision and comprehensive coverage are often sold as a package. Both pay to fix damage to your own car or replace it entirely — but they don’t cover injuries or damage to anyone else’s property. See what you could save on car insuranceEasily compare personalized rates to see how much switching car insurance could save you. Key terms in this articleHere are some common terms you will see associated with comprehensive and collision coverage.
Comprehensive vs. collision insuranceThe main difference between comprehensive and collision insurance are the situations covered. Collision insurance pays for damage to your car if you hit an object or another vehicle, while comprehensive coverage pays for theft or damage from causes such as bad weather, fire or fallen trees. Some insurers require that you purchase collision and comprehensive insurance together, while other insurers may allow you to purchase these two types of coverage separately.
How much comprehensive and collision coverage costTo get realistic comparisons, we analyzed rates for minimum-coverage policies and compared them with policies with comprehensive, collision and higher liability limits. Together these three types of coverage are commonly considered “full coverage” car insurance. Here are the rates for drivers with good credit and no recent traffic violations or accidents at the five largest auto insurance companies in the U.S. (In most states, drivers with good credit typically qualify for lower rates than those with poor credit. Four states — California, Hawaii, Massachusetts and Michigan — don't allow insurers to use credit in setting car insurance rates.)
Car insurance rates vary widely by state for similar policies, and adding comprehensive and collision coverage costs more in some places than others. Below are the average cost differences between minimum and full coverage policies in every state for a driver with good credit and no recent tickets or accidents. Keep in mind that your own rate will depend on the value of your car, your location, your driving history and the deductible amount that you choose.
See what you could save on car insuranceEasily compare personalized rates to see how much switching car insurance could save you. How to save on comprehensive and collision insuranceAs you can see, average annual rates can vary by hundreds of dollars, so it’s worth shopping around for car insurance quotes from several companies to make sure you’re getting the best deal. Another way to save money is by raising your comprehensive and collision deductibles. An insurance deductible is a predetermined amount that is subtracted from a claim payout. Many policies offer options as high as $2,000. But do this only if you’re prepared to spend more of your own funds to fix or replace your car. Do I need comprehensive and collision insurance?About 79% of all U.S. drivers buy comprehensive coverage, and 75% buy collision, according to the Insurance Information Institute, which based its analysis on 2019 data from the National Association of Insurance Commissioners. You should consider buying comprehensive and collision insurance if:
You probably don’t need comprehensive and collision insurance if your car is older and not worth a lot. Remember the maximum payout will be the value of your car if it’s totaled or stolen, minus the deductible. If your car’s value is low, consider whether the potential payout would be worth the premiums you’ll pay. Remember, too, that the deductible amount will reduce any claims check. Check out NADAguides for your car’s current value. Is comprehensive and collision worth it on old car?Since older cars, typically 10 years and older, aren't worth as much as those newer vehicles on the road due to depreciation, dropping comprehensive and collision coverage is a good idea if your vehicle's value drops to a level you feel comfortable paying out of pocket if it were totaled.
Is it better to have comprehensive or collision insurance?Comprehensive coverage protects your vehicle from unexpected damage, such as a tree branch falling on it or hitting an animal, while collision coverage protects against collisions with another vehicle or object.
Are older cars more expensive to insure?In general, auto insurance for older cars may be cheaper than insuring newer vehicles of the same make and model if the used car is cheaper to repair or replace. A car depreciates in value over time, which lowers the maximum amount an insurance company would have to pay in the event of an accident.
Why do some people drop collision and comprehensive coverage?If you are a safe driver, you might not need a collision cover. At the same time, if your car is worth less than the minimum deductible amount, or is cheap to fix, you might not want to take out a comprehensive cover.
|