Auto Insurance – Comprehensive vs. Collision: What’s the Difference?

What’s The Real Difference Between Comprehensive and Collision Insurance?

What is Collision Insurance?

Collision insurance covers your costs of repair, up to your policy limit, if your car hits another car or an object like a fence or mailbox.  It “collides”.  It also provides you with coverage if you are hit by an uninsured motorist or if someone runs into your vehicle and drives away without providing their information.

If you file a collision insurance claim, you will only have to pay your deductible for the repair.  If your car is totaled, meaning that the cost of repairing your car is more than the car is worth, you will be paid the value of your car, minus your deductible.

What is Comprehensive Insurance?

While collision coverage is used only for collisions, comprehensive coverage is used for several different types of damage.  Severe weather damage, if your auto is stolen or vandalized, if an animal runs into you, etc.  These damages can result in costly repairs.  If you have comprehensive insurance, you will only have to pay your deductible to have your vehicle returned to the condition it was in before the damage.

Do I Need Both Types of Insurance Coverage?

If you are making payments on your vehicle, your bank lender or lease holder may require you to have ‘full coverage” including both comprehensive and collision coverage.  This is because they have a financial investment in the value of your vehicle, and they have a vested interest in making sure that it is in good condition and kept in nice looking condition.

Maybe you own your vehicle outright; do you still need comprehensive and collision coverage?  To decide how much coverage you need, think about your unique situation.  Do you drive every day, or does your car spend most of the time parked in your garage?  Do you have an older vehicle, or is your vehicle only a couple of years old?  If you got in an accident tomorrow, or someone hit and ran, could you pay out of your own pocket the cost of repairing or replacing your car?

When it comes to deciding how much coverage you need, there isn’t a one-size-fits-all solution.  Think about your needs and habits and decide what is best for you.  Many times, auto owners that have older cars that aren’t really deemed “collectibles” will not add collision or comprehensive coverage to their policy.  They figure the extra cost in their policy, plus paying the deductible if the car were to be involved in an accident wouldn’t be worth these extra costs each month if an accident occurred.

How to Build the Best Auto Insurance Policy

Building the auto insurance policy that is right for you can be difficult.  With so many different options available, you may worry that you don’t have the right amount of coverage.  Carrying too much coverage on an older car may end up costing you more in the long run, while having too little coverage can leave you with thousands of dollars in repairs in the event of an accident and law suit.  Call us to help you review your options and build the policy that will fit your needs and budget.

Related Articles:

♦ Automobile Comprehensive Coverage

♦ Automobile Collision Insurance

♦ How to Determine How Much Auto Insurance Coverage You Need

♦ Uninsured Drivers: Avoiding Financial Devastation

Read More: Auto Insurance in Las Vegas, Nevada

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DISCLAIMER: It is important to note that the information contained herein is made general for the purpose of explanation.  You should consult your policy for exclusions or other language that may alter your policy.

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