Collision and comprehensive insurance are differentiated by the way damage is caused to the insured vehicle. A person who opts for full insurance coverage would have both collision and comprehensive.
Use your ZIP to compare online auto insurance quotes for free, now!
Unlike liability coverage, both collision and comprehensive are designed to pay for damage to your own car. However, they protect your vehicle from very different things.
What is collision insurance?
Collision insurance covers damage that occurs as a result of a collision with another vehicle or object. This coverage applies regardless of who is at fault in the accident. Collision coverage will handle damage from hitting a post, tree, curb or other various objects.
What is comprehensive insurance?
Comprehensive insurance covers damage to the insured vehicle that occurs as a result of anything other than collision. This can be as a result of Mother Nature, fire or vandalism. Most insurance policies include hitting a deer under the comprehensive insurance rather than collision. This can cause confusion.
To make the difference clear, collision coverage only covers damage that occurs from other vehicles or a collision with an object. Damage from hitting any kind of an animal will fall under your comprehensive insurance coverage.
In most cases, the collision and comprehensive insurance are bundled into one package by your insurance company. It may still be possible to purchase one coverage and not the other as a way of saving money. If you have a lien on your vehicle, your lender will probably require you to have both of these covers.
What determines rates?
Auto insurance rates for collision and comprehensive insurance are affected in the same manner that liability coverage is. The age of the insured drivers, credit history and driving history can all play a role in raising or decreasing your insurance rates. Drivers under 25 are considered high risk and will likely have to pay a higher insurance premium.
Traffic violations including drunk driving will also have an impact on your collision and comprehensive insurance rates. The standard for insurance companies is to look back at the last three years of your driving record to determine the risk that is involved to insure you as a driver. The more violations and accidents you have on record, the more risk the insurance company is taking by insuring you.
The area in which you live may also directly affect your insurance rates. Some areas are known for high rates of car theft and vandalism. By living in one of these areas, the insurance company will likely increase your comprehensive insurance premium. There are also automobiles that are more commonly stolen, which will increase the risk that the insurance company will have to pay a claim on your auto insurance policy.
The insurance company will usually ask you where you work to determine your regular commute. The more mileage you put on your vehicle, the more likely it is to become involved in an accident. As a result of putting high miles on your vehicle, you may have to pay more for your collision coverage.
The value of the vehicle also has a direct impact on your insurance rate. The more it will cost the insurance company to repair or replace the vehicle, the more you will have to pay for your premium. Depending on the worth of your car, you may be able to save a minimal amount of money by deciding not to have collision or comprehensive insurance.
Am I required to have collision or comprehensive insurance?
These rules may vary by state auto insurance laws. The limited requirements by state law are usually for limited liability coverage, which does not include collision and comprehensive coverage. If your vehicle is financed through a bank or credit union, they likely will require you to have full coverage on your vehicle.
Full coverage does include collision and comprehensive. If you get into an automobile accident, the bank wants to make sure their assets are protected. If the vehicle is damaged to the point that it is not drivable, the bank has nothing to take back if you decide to not pay your bill.
If you own your vehicle free and clear, collision and comprehensive insurance are not required. It is a way for you to save money on your auto insurance policy. Depending on the worth of your vehicle and how much money you have to fix potential damages, you may want to consider getting full coverage on your vehicle.
Get your free auto insurance quotes today by entering in your zip code right here!