Collision vs. Comprehensive: What is the difference between collision and comprehensive auto insurance?

Understanding collision and comprehensive auto insurance is important. You may have asked, “Does insurance cover damage from hitting a curb?” That would depend on what coverage you have.

So what is the difference between liability auto insurance and collision insurance? We’ll cover that too. Continue reading our extensive guide to explore two well known types of auto insurance: collision and comprehensive coverage.

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Collision vs. Comprehensive: What is the difference between collision and comprehensive auto insurance?

Comprehensive and collision insurance are designed to cover damage to your vehicle. Like the name says, collision covers damage caused by a collision with a car or another object, regardless of who was at fault.

Comprehensive covers damage from other types of incidents outside of a collision.

Many people ask, “Do I need comprehensive and collision?” It depends. Read on to learn why you may need comprehensive and collision insurance, and when to drop collision insurance.

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. Typically, though, it would be used when you are at fault, because if the other party caused the accident, their liability insurance should pay for your damages.

Collision coverage will handle damage from hitting a post, tree, curb, or other objects as well.

Why do I need collision coverage?

Collision insurance is coverage for pretty much anything you collide with. This could be hitting a tree or another vehicle. However, this does not cover hitting an animal that has run out into the road in front of you. That type of incident is covered by comprehensive auto insurance.

A rule of thumb for dropping collision insurance is when your vehicle’s value isn’t enough to get you a new vehicle.

Comprehensive auto insurance covers any accidental physical damage to the insured vehicle other than that caused by a collision with another vehicle.

In addition to accidents involving property or animals, it also covers things like falling trees, flood damage, fire damage, damage from projectiles, damage from severe weather events (hail, tornadoes, etc.), theft, or vandalism.

What is comprehensive insurance?

Many people find the term “comprehensive” misleading or confusing. Some people jump to the conclusion that it covers all physical damage not covered by the collision portion of their policy.

However, comprehensive coverage does not cover normal wear and tear, nor does it cover any of the car’s contents.

Some things you might consider to be part of the car may also not be covered. An upgrade to an expensive stereo system is one of the things that’s not covered, nor does it cover damage to the tires or vandalism by family members or employees.

If in doubt, ask your agent what your policy covers exactly. If necessary, consider getting an additional rider to cover any special upgrades that are important to you.

Why do I need comprehensive coverage?

Comprehensive insurance covers damage to the insured vehicle that occurs as a result of anything other than collision. This would include severe weather, fire, and vandalism.

Most insurance policies include hitting a deer under comprehensive insurance rather than collision.

What’s the difference between comprehensive and collision car insurance? Collision coverage only covers damage from colliding with another vehicle or object.

Damage from hitting any kind of animal will fall under your comprehensive insurance coverage.

In most cases, 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 to save money.

If you have a lien on your vehicle, do you need comprehensive and collision? In that scenario, your lender will probably require you to have both of these coverages.

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Collision and Comprehensive Auto Insurance: Full Coverage vs. Liability Cost

A person who opts for full coverage auto insurance would have both collision and comprehensive.

Is comprehensive insurance full coverage? No. Comprehensive coverage pays for damages from incidents other than a collision. Full coverage, by definition, is collision and comprehensive coverage added to liability. Full coverage and comprehensive coverage are not interchangeable terms.

Unlike liability coverage, both collision and comprehensive are designed to pay for damage to your car. However, they protect your vehicle from very different things. Also, they have different costs.

The National Association of Insurance Commissioners (NAIC) lists the average annual rates of liability, collision, comprehensive, and full coverage in their yearly research reports. Here are the latest average annual rates by coverage type.

Liability carries the most expensive rates across the United States. However, these prices are subject to change based on the various factors that determine your auto insurance rates.

Collision and comprehensive coverage are property damage coverages that increase when the vehicle’s value is much more expensive than the average vehicle. Continue reading to learn more details about liability, collision, and comprehensive insurance.

How does liability insurance differ from comprehensive or collision insurance?

Auto insurance rates for collision and comprehensive insurance are determined in the same manner as rates for liability insurance. The age of the insured drivers, credit history, and driving history can all play a role in raising or lowering 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 impact your collision and comprehensive insurance rates.

The standard for auto insurance companies is to look back at the last three years of your driving record to determine the risk involved in insuring you as a driver. It’s important to remember that collision vs. comprehensive State Farm rates will be different from when you look up collision vs. comprehensive rates from Allstate.

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. If you live in one of these areas, the insurance company will likely increase your comprehensive insurance premium.

Some automobiles are more commonly stolen, and if you own one of these, it will increase the risk that the insurance company will have to pay a claim on your auto insurance policy. Collision vs. comprehensive claims will have different rates based on the state.

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 mileage 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’ll have to pay for your premium.

Depending on your car’s value, you may be able to save a minimal amount of money by opting not to have collision or comprehensive insurance.

Collision vs. Comprehensive Insurance: Do I need both?

To some extent, this depends on state auto insurance laws. State laws’ limited requirements are usually for 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.

Is it worth having comprehensive insurance if you own your car outright? If you own your vehicle free and clear, collision and comprehensive insurance are not required.

However, depending on your vehicle’s worth 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 your ZIP code in our comparison tool below.

What is the average cost difference between full coverage and minimum coverage auto insurance?

The average cost difference between full coverage and minimum coverage auto insurance is $36.55 more per month. That means protecting your vehicle may not be as expensive as you think.

You probably know there are minimum auto insurance coverages for most states that you must meet to legally drive. But you can also purchase additional coverage if you feel the minimum amount does not provide enough protection.

To help you make this decision, you may be wondering about the average cost difference between full coverage and minimum coverage auto insurance.

The average difference is hard to pin down because auto insurance rates vary based on several factors. To help you out, we’ve done some research for you. Read on to find out about average rates for both coverage types, how various factors can affect your rates, and more.

Enter your ZIP code into our FREE car insurance comparison tool to find the price difference between liability and full coverage.

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Minimum vs. Full Coverage Auto Insurance

So just what is the minimum coverage, and what is full coverage? Are there other options? How much can you expect to pay? Take a few minutes to read through the next few sections to find out the answers to these and other questions you may have about the definition and cost of different coverage types.

What are the average rates for minimum versus full coverage auto insurance?

Generally, liability auto insurance coverage is much less expensive than full coverage insurance.

How much is full coverage auto insurance per month versus minimum liability coverage per month?

A driver with a good driving record may obtain a full-coverage policy for under $100 per month. We’ll discuss this in more detail in a bit.

In most cases, the same good driver might pay $40 per month for a liability-only policy. Average auto insurance costs per month vary significantly between the different auto insurance providers.

To better understand the difference between average rates for liability and full coverage, take a look at this table, which we’ve populated with annual rate data from Quadrant.

As you can see, rates vary across the country. The increase from liability to full coverage ranges between 10 and over 300 percent when comparing liability-only and full coverage.

The average rate for liability coverage in the United States is $538.73, compared to $1,009.38 for full coverage.

In other words, on average, drivers will pay 87 percent more in rates for a full coverage policy than for a liability-only policy.

While the difference in cost may seem extreme, it’s important to keep in mind what that additional cost buys you. While liability coverage may be the cheapest auto insurance, it may not be your best option.

Read through the next couple of sections to learn more about both of these coverage types and why full coverage costs so much more.

What is minimum liability auto insurance coverage?

Minimum liability coverage is typically the least amount of coverage you must purchase to drive legally. Each state determines its own minimum limits for auto insurance and they vary considerably from state to state.

Take a look at the next table, featuring data from the Insurance Information Institute on minimum state requirements.

For reference in looking at the table,

• BD – bodily injury liability
• PD – property damage liability
• UM – uninsured motorist
• UIM – underinsured motorist
• PIP – personal injury protection

What’s standard is that minimum liability coverage only covers the cost of the damages and injuries to the other driver when you’re found to be at-fault for the accident. Any damages or injuries you experience will not be covered; you’ll have to pay out of pocket.

Take a look at this video to learn more.

It’s interesting to note that the term “minimum coverage” is a tricky one. A full coverage insurance policy (which we’ll talk about next) typically includes this minimum coverage, along with collision and comprehensive. When speaking about auto insurance, however, “minimum coverage” usually refers to a liability-only policy.

Full Coverage vs. Comprehensive and Collision

What is full coverage auto insurance? Full coverage insurance is a combination of coverage types. It usually includes both collision and comprehensive coverage, along with the state minimum liability coverage.

So what is collision coverage? Collision coverage protects you if you are in a collision with another vehicle or object. Take a look at this video to learn more.

Comprehensive auto insurance (also known as “other than collision”) provides financial protection if your car is damaged as a result of weather, vandalism, or theft. Other types of policies, such as gap insurance and uninsured motorist insurance, may or may not be included in a full-coverage policy.

Watch this video on comprehensive coverage to learn more.

Based on this information, when asking yourself, “is it worth having full coverage auto insurance?” it’s important to remember that while the initial cost for full coverage may be higher, you’re protecting yourself from potentially expensive costs later. You should speak to a licensed insurance agent to determine the best policy and coverage mix for your needs.

Factors That Determine Auto Insurance Rates

You may be asking how much auto insurance should be, and you’ll find that the answer is not as simple as a single price. Several factors determine your auto insurance rates, so while the numbers we provided earlier are helpful as a baseline, your rates may differ.

Take a few minutes to review the next few sections to find out how where you live, your age, gender, marital status, credit score, and more can affect your auto insurance rates.

How does my location affect my auto insurance rates?

Urban dwellers will find that they pay more for both full coverage and liability-only auto insurance policies. Between the traffic and the higher crime rates, auto insurance companies generally charge higher rates to policyholders who live in the city.

This cost difference is generally calculated based on the ZIP code (insurance companies look at the crime and accident rates and other data based on ZIP code). As an example, take a look at this video, which discusses the difference in rates for residents of St. Louis.

As you can see, even within the same city, rates can vary quite significantly by ZIP code.

How does my age, gender, and marital status affect my auto insurance rates?

Your age is one of the factors that determine your auto insurance rates. If you’re under 25 years old, you’re considered a higher risk. Unfair though it may be, your age works against you in auto insurance rates if you’re a young driver.

Your gender may also affect your rates. Males are statistically higher risk drivers than females, which means that males generally pay higher auto insurance rates than females of the same age. Some states have banned basing rates specifically on gender. According to the California Department of Insurance, it’s illegal to base car insurance rates on gender in the state.

Here are the list of states that has banned gender-based auto insurance rates.

• California
• Hawaii
• Massachusetts
• Michigan
• Montana
• North Carolina
• Pennsylvania

Marital status affects your auto insurance rates as well. Married individuals tend to be rated as less of a risk than single folks in the same age group (and may even qualify for different types of auto insurance discounts because they’re married).

Take a look at this table to see some average auto insurance rates by age and gender across the country.

As you can see, at 17, males uniformly pay more for insurance than females do, and rates for both genders at that age are significantly higher than at any other age. Rates start decreasing at 25, but the best rates aren’t available for many drivers until they’re married and 35.

How does my credit score affect my insurance rates?

You’ve probably noticed, everything auto insurance companies consider when adjusting rates is based on risk. Drivers who are perceived to be higher risk will pay higher rates, while drivers perceived to be a lower risk will pay lower rates.

Your credit score affects the auto insurance rates you’ll pay. Those with less than good credit are statistically more likely to be a higher risk behind the wheel.

Take a look at this table to see how credit score can affect your rates.

As you can see, the better your credit score, the better your insurance rates may be. Drivers with a poor credit score will pay an average of 66 percent more for their insurance than drivers with a good credit score.

According to Experian, the average credit score across the United States is 701, considered “good.”

How does my driving record affect my auto insurance rates?

Perhaps the most obvious factor that can affect your insurance rates is your driving record. Remember how everything comes down to risk? If you have a clean driving record, you’re considered a lower risk than a driver with car accidents, speeding tickets, etc. on their record.

But just how much can your driving record affect your insurance rates? Take a look at this table to find out. We’ve compared rates for a clean driving record to a record with one speeding ticket, one accident, and one DUI.

While rates vary by company, the average difference between a clean record and one with an accident, DUI, or speeding violation can be significant. For example, if Geico insures you:

• With one speeding violation – rates increase by 23 percent
• With one accident – rates increase by 49 percent
• With one DUI – rates increase by 127 percent

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When should you drop collision and comprehensive coverage?

Comprehensive auto insurance covers non-collision damage to the car, including damage from natural disasters or theft.

• No states require you to carry comprehensive insurance as part of your insurance plan. However, adding comprehensive coverage may be in your best interest.
• If you have not yet paid off your car, your lender will probably require you to get comprehensive auto insurance coverage.
• If you have a loan and you don’t buy the coverage required by your lender, then they can pursue you for the costs.

Comprehensive auto insurance is an optional add-on to your regular insurance policy to cover the cost of any damage caused by uncovered events.

Why do I need comprehensive insurance?

The most common reason that someone buys comprehensive insurance is that their lender requires them to do so. When you finance a vehicle, you need full coverage insurance because your lender wants to protect their investment.

Even though the car is in your possession, it technically still belongs to your lender until you pay it off. Lenders want to ensure that if something happens to the car, they can be compensated.

There are other types of auto insurance that your lender may require.

• Collision – In addition to comprehensive insurance, your lender will also require you to purchase collision coverage. This insurance covers the cost of the damages to your vehicle in the event of an accident.
• Higher liability – Your lender may also require you to carry higher levels of liability insurance beyond what your state already requires. If you cause a car accident and your insurance doesn’t cover all of the damages, drivers could go after your financer.

A lender requirement isn’t the only reason that you might want to consider comprehensive insurance coverage. Simply put, if you have a vehicle worth more than $1,000, you will want to consider this coverage.

Even if you own your vehicle outright, you might still want to be covered for incidents like vandalism, theft, or damage from severe weather. If you don’t have comprehensive coverage, you’ll be paying for this damage or buying yourself a new car out of pocket.

What happens if I don’t carry comprehensive insurance on my car?

If you don’t have a loan on your vehicle and don’t carry comprehensive coverage, nothing happens.

However, if you have a loan and you don’t buy the coverage required by your lender, then they can pursue you for the costs.

The lender has a few options. They can demand that you pay all of your debt or they can repossess your vehicle.

The other, more common option is to tack insurance onto your loan payment. When a lender charges you for insurance, they aren’t bound by insurance laws, which means they can charge you virtually whatever they want.

Typically, when you pay for insurance through your lender, you will pay at least twice as much as you would if you were paying for your insurance on your own.

The lender can choose to add your insurance payment to your loan payment, requiring you to pay more each month, or they can extend your loan, which means that you will pay far more for your vehicle.

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What does my regular insurance cover?

Many people believe that their basic insurance plan will cover the theft of their car. This isn’t the case. Your basic insurance is called liability insurance, which means that it is designed to cover your liability when an accident occurs.

If you cause an accident, either due to negligence or something that was out of your control, the other vehicle’s driver has a right to compensation. Your liability coverage will pay for the damages.

If your insurance runs out before all of the bills are paid, then you become personally liable for the costs associated with the accident. The other driver in the accident can sue you if they feel they aren’t adequately compensated.

Although there is a per accident limit on the amount of liability coverage that you have, there is no lifetime maximum on the coverage.

Your coverage resets after an accident, so if you cause another accident, then your insurance will pay for the damages again.

However, an insurance company can drop your coverage if you file multiple claims with them in too short of a period. If this happens, you’ll probably be able to get coverage elsewhere, but at a higher price.

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What is the cost of coverage?

As with any auto insurance type, if you can afford to absorb some out of pocket costs, a higher deductible can help bring your premium down.

For example, if you have more than a few thousand dollars in a savings account, you can probably comfortably cover a thousand dollars out of pocket in case of a covered incident with your car.

Raising your deductible from the minimum to $1,000 can lower your premium.

Comparing prices between different auto insurance companies online is always a good idea.

Getting Both Types of Coverage

Most states require liability auto insurance for a car. Some states have provisions for getting around this requirement, like having a bond for the vehicle.

Comprehensive coverage is optional, but since most car owners require financing, it winds up being required for most cars.

In most cases, insurance companies offer both collision and comprehensive coverage as a package deal. Under some circumstances, the two can be purchased individually.

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Shop Around to Get the Best Rates

Like any other product, auto insurance policies vary greatly by company. The best way to get a good deal on auto insurance is to shop around and compare rates. And this includes finding cheap full coverage auto insurance. Our free rate tool allows you to compare rates quickly and easily.

You can also call an agent directly to get the details about full coverage and liability-only policies, rates, and more. They will be able to answer any questions you may have about purchasing a policy.

Collision and Comprehensive Auto Insurance: The Bottom Line

Now that we’ve discussed liability versus full coverage, how your rates may be affected by various factors, what insurance is required in your state, and more, what’s the bottom line?

• Minimum liability coverage is required in nearly every state in the country.
• Liability coverage only covers the cost of the other driver’s damages and injuries when you’re at fault in an accident.
• Full coverage costs an average of 87 percent more than liability coverage.
• Full coverage includes liability, collision, and comprehensive coverage.
• Multiple factors can affect your insurance rates, all based on your perceived risk.
• Shop around to find the best auto insurance policy for your needs and lifestyle.

Start shopping right now by entering your ZIP code in the FREE comparison tool.

Frequently Asked Questions: Collision and Comprehensive Auto Insurance

Do you still have questions? We’re here for you. Read on to find out even more information about auto insurance.

#1 – Is full coverage required?

According to the Federal Trade Commission, if you drive a financed or leased vehicle, you will be required to carry full coverage insurance. Your finance company or leasing company will require that the vehicle is covered to insure them against possible losses.

If you do not carry full coverage insurance, you may violate the loan contract. Finance companies may assign an insurance policy to the loan if, for some reason, your insurance policy is canceled.

#2 – What is the difference between full and comprehensive auto insurance?

As we’ve previously noted, comprehensive coverage provides financial protection for you if your vehicle is damaged in an incident not related to a collision.

Full coverage includes comprehensive coverage (as well as liability and collision coverage).

#3 – What is the difference between full coverage and personal injury protection?

Full coverage includes liability, collision, and comprehensive coverage. Personal injury protection (PIP) is sometimes included in liability coverage if required by your state. Regardless, it can be added to your policy (speak to a licensed insurance agent about this).

What is PIP? Essentially, PIP covers the cost of medical expenses and sometimes lost wages in the event of an accident. Watch this video to learn more.

PIP is a good option because it provides coverage for you, your passengers, and pedestrians (if they’re hit by your vehicle). Also, if you’re in an accident as a passenger in someone else’s vehicle, your PIP coverage may still apply for your medical expenses, etc.

#4 – Will full coverage protect me if I’m in an accident with an uninsured driver?

While full coverage may include protection for uninsured drivers through your liability policy (if your state requires uninsured/underinsured motorist coverage as part of the minimum coverage requirements), this is not always the case.

Take a look at this video to learn more about uninsured/underinsured motorist coverage.

Suppose your state does not require uninsured/underinsured motorist coverage. In that case, it may be a good idea to speak with your insurance agent about adding it to your policy, particularly given that the average rate of uninsured drivers on the road across the United States is about 13 percent.

#5 – What is the cheapest full coverage auto insurance?

While we don’t have data on full coverage per company specifically, we do have average rates (which include liability, collision, comprehensive, and full coverage) for companies across the country.

Take a look at this table to see those average rates from some major companies in the United States.

As you can see, American Family offers the cheapest average rates for auto insurance in the country.

#6 – Are there other factors insurance companies consider when adjusting rates?

While we’ve already discussed how your age, gender, marital status, credit score, and driving record can affect your insurance rates, there are several other factors insurance companies consider.

These factors can include:

• Driving experience – Insurance companies look at how many years you’ve been driving; more experience equals lower rates.
• Commute length – The greater the number of miles you drive, the higher your chances of getting in an accident, and the higher your rates.
• Coverage level – As you’ve already seen, the more coverage you have, the higher your rates are likely to be.
• Vehicle – The higher the vehicle value, the higher your rates will be.
• Occupation – Some jobs are considered more high risk than others; higher risk jobs can mean higher insurance rates.
• Education – The more education you have (i.e., college degrees), the lower risk you are perceived to be, which can mean lower insurance rates.

While this list is not exhaustive, it does cover the primary factors insurance companies consider. You can improve your chances of finding cheap auto insurance by driving safely, minimizing your commute (if possible), managing your credit score, and more.

Now that you know the differences in coverage and cost of liability and full auto insurance policies, as well as what can affect rates, you’re probably ready to get shopping.

#7 – Is comprehensive and collision insurance worth it?

For new car owners or drivers who finance their vehicles, comprehensive and collision insurance is worth it, and it’s required.

#8 – Is comprehensive and collision insurance the same as full coverage?

Full coverage is a combination of liability, comprehensive, and collision coverage.

#9 – Should I carry collision insurance on an older car?

It depends on the value and year of the vehicle. If you have an older car with a low value, you may not get much for it from your auto insurance company. If the older car is your only vehicle and you don’t have much money in savings, get collision insurance to help replace it if something happens.

You could use an auto insurance cost calculator, but why do that when all you have to do is enter your ZIP code into our FREE car insurance comparison tool to see cheap collision and comprehensive auto insurance rates available to you!