What's the Difference Between Collision and Comprehensive Car Insurance Coverage?

Both collision and comprehensive car insurance are types of insurance that cover damage to your vehicle. Although collision and comprehensive policies are not usually required by state law, some lenders and lessors require their customers to carry this additional coverage when financing or leasing a vehicle.

This article addresses:

• what collision and comprehensive car insurance cover
• notable differences between the two types of coverage, and
• why and when you might want to purchase one or the other (or both).

Collison Car Insurance Coverage

When you purchase collision automobile insurance, you're purchasing coverage for damage to your own vehicle that occurs as the result of an accident, regardless of who was at fault for the crash. Say, for example, you cause a fender bender that damages the front of your car. With collision coverage, you can make a claim with your insurance carrier to cover the costs of repairing the damage (less any deductible), even though you were at fault. If you hadn't purchased collision coverage, you'd be left paying for the repairs out of your own pocket, or living with a messed-up bumper.

Collision auto insurance covers car-on-car accidents (such as sideswipes and multicar pileups) and single-car accidents (such as accidentally backing into one of those pesky pillars in a parking garage). Most collision policies also cover damage caused by another vehicle smashing into your parked car. However, collision car insurance usually does not cover hitting an animal.

Because collision insurance is provided by your own insurance carrier (as compared to the carrier of another driver that you might be in an accident with), and because it is paid out regardless of fault, you will usually receive a payout faster than you would if you sought reimbursement from another party's insurance policy.

Most states do not require drivers to have collision coverage. However, if you owe money on your car, or if you're leasing a vehicle, your lender or the company you're leasing the car from might require you to have it. Otherwise, buying collision car insurance coverage is optional.

Comprehensive Car Insurance Coverage

Comprehensive automobile insurance covers damage to your vehicle caused by something other than a car accident. For example, comprehensive insurance covers damage from vandalism, weather, floods, and fire. Most comprehensive insurance policies also cover damage caused by hitting an animal while driving.

Comprehensive coverage also covers the replacement value of your car if it is stolen.

Most states do not require drivers to have comprehensive coverage. However, like collision insurance, if you owe money on your car, or if you're leasing it, your lender or the company you're leasing the car from might require you to have it.

Collision vs. Comprehensive Car Insurance

Collision and comprehensive car insurance policies have a few things in common. They both:

• are optional under most states' laws
• cover vehicle damage, not car accident injuries, and
• are paid out regardless of fault.

The biggest difference between collision and comprehensive coverage is that collision policies cover damage to your vehicle that happens while you're driving, while comprehensive coverage policies cover damage that happens when you're not driving (such as a door frame broken in a break-in or body damage caused by hail).

Here's a breakdown of the differences between collision and comprehensive car insurance:

As is the case with any type of insurance, all car insurance policies differ, and what yours covers (or doesn't cover) might vary from what's described here. Before you purchase collision or comprehensive car insurance, be sure to read through the policy—and don't be afraid to ask your insurance broker to explain any terms you don't fully understand.

Pros and Cons of Purchasing Both Collision and Comprehensive Car Insurance

If your state's law, lender, or the party you're leasing your car from (lessor) requires you to have collision or comprehensive insurance, the decision of whether to buy these types of coverage is made for you.

But if you own your car outright or aren't subject to anyone else's requirements, you might wonder about the pros and cons of paying for collision or comprehensive car insurance.

The decision comes down to a financial analysis: Is the expense of the premium (the price you pay to get the coverage) plus the deductible you'll pay when something happens worth it? You'll have to consider two things:

The value of your car. If your car has a low value that is close to what your deductible would be, paying for this extra insurance probably isn't worth it. If your car is worth significantly more than your deductible and you can afford the premium payments, though, collision insurance might be a good investment.

The area in which you drive or store your car. Comprehensive insurance might also be worth your money if you live in an area:

• where deer, moose, or other animals frequently enter the roadway
• where car theft or vandalism is common, or
• that is prone to natural disasters or violent weather, such as hailstorms or tornadoes.

Often, you can get a discount on collision and comprehensive car insurance when you bundle it with other types of insurance, so it makes sense to discuss your options as well as the pros and cons of coverage with your broker. Learn more about buying insurance for your car and the role of insurance in a car accident case.