It can be challenging to make sense of auto insurance jargon, but it’s important to understand your coverages, so you know what to expect when the unexpected happens. One common question that many car owners have is: what’s the difference between collision and comprehensive coverage?
The difference is in the details
Collision insurance is what you might expect. It covers you in case you hit another car, or someone else hits yours. Coverage includes needed repairs or a full vehicle replacement if necessary.
Comprehensive insurance is a bit more confusing. It covers damage caused by unexpected non-collision events, such as theft, vandalism, fire, and hail. Some more uncommon scenarios covered are animal damage or civil riots.
What’s not covered
Before taking out any insurance, it’s important to understand what’s not covered. Neither comprehensive nor collision insurance cover damage to the other vehicle. So, if you’re found at fault for a collision, and the other party makes a claim against your insurance, that money will have to come from another coverage.
Another common surprise is that these insurances do not include coverage for medical payments. Make sure to check with your agent what you may be responsible for and to get any additional coverage.
Choosing which is right for you
While all insurance has its purposes, not every coverage makes sense for everyone. When considering whether to add these coverages to your premium, it’s important to consider a few factors.
If you own an expensive car, it may make sense to purchase both collision and comprehensive insurance. Repairs to luxury vehicles can be expensive, and you may be left with a large bill in the case of bad weather, fire, or a hit-and-run. For economy vehicles or vehicles near the end of their life, the cost of the premium may not be worth it.
Your accident risk is something else to consider. Be honest with yourself. Have you been at fault in an accident before? Do you have a long commute? Is there a lot of hit-and-run activity or vandalism in your area? If so, it may make sense to consider both collision and comprehensive.
Finally, take into account your current savings. If you have a lot stored away and wouldn’t be too upset to spend it in case of an accident, you may not need to purchase additional coverage. On the other hand, if you are one accident away from financial ruin, a few extra dollars a month may save you from greater headache in the future.
Collision and comprehensive coverage can provide additional peace of mind to vehicle owners. Each covers several common scenarios that car owners find themselves in every day, but even so-called comprehensive insurance does not cover everything. Nevertheless, after considering the factors above, you decide these coverages are right for you, call your insurance agent today.