Collision vs comprehensive car insurance coverage

I remember shopping for car insurance the first time. I went to a local State Farm office, and I was presented with a “full coverage” option. While that sounded great, I wasn’t sure what I would be paying for exactly.

The insurance agent gave me a quick rundown, but most of the terms she used were unknown to me, so little difference that made! But the idea of “full coverage” and not having to worry about anything appealed to me enough to pull the trigger.

Now, years later (and hopefully wiser), I have gained enough experience personally and through occupation to clearly understand the differences.

The different car insurance coverage options

Car insurance comes in four different options, those are;

• Liability

• Collision

• Comprehensive

• Full coverage, basically combining liability, collision and comprehensive

Liability coverage

Liability is the most basic form of car insurance. It doesn’t cover your vehicle at all. It only covers damages caused by you to others. That’s why most people don’t opt for liability coverage alone. It’s only recommended if you don’t or rarely drive the vehicle – or if the car simply isn’t worth covering.

Collision coverage

However, most people drive their vehicle, and if you’re one of them, collision coverage is a must. It will cover damages to your car if you’re in an accident. That includes if you cause the accident. It also protects your vehicle if you are not responsible for the accident and the liable party doesn’t have liability insurance.

Don’t assume everyone has liability insurance. If you are involved in an accident and the party responsible doesn’t have liability coverage, damages to your vehicle will only be covered if you have collision coverage.

Comprehensive

Lastly, there’s comprehensive. You may wonder, if liability covers damages to another vehicle, and collision covers damages to your car, what’s the benefit of comprehensive coverage?

Put simply, comprehensive covers damages caused to your vehicle outside of regular car accidents. That includes damages caused by hitting an animal (which can be very common based on the state you live in), floods, fires, explosions, hitting objects, and violent acts like riots.

Is comprensive coverage worth it?

It depends on a few factors, but you should consider the small cost before diving into those factors. Depending on the vehicle, comprehensive coverage typically costs about 10% of liability and collision coverage.

So say your liability coverage costs $1,900 a year, and collision costs $1,900 a year, comprehensive would cost about $190 a year. So for a 5% overall cost increase, your vehicle is covered from just about anything.

It is likely your vehicle has never caught fire or exploded out of the blue, so saving 5% may be worth it. On the other hand, about 260,000 accidents happen every year by hitting an animal. The damage can range from a minor scratch to your vehicle being totaled. If you live in a state prone to wildlife, saving 5% may not be worth it.

Get full coverage and save

Instead of limiting your coverage, you could opt for full coverage and still save 5% or more simply by switching car insurance providers.

Cost examples