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

Understanding collision vs comprehensive auto insurance is important. They are differentiated by the way damage is caused to the insured vehicle. A person who opts for full coverage auto insurance coverage would have both collision and comprehensive.

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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. Although, it typically applies when you’re at fault as the other person’s liability would pay when they are at fault.

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

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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 a result of Mother Nature, fire or vandalism.

Most insurance policies include hitting a deer under comprehensive insurance rather than collision. This can cause confusion. What’s the difference between comprehensive and collision car insurance?

To make the difference clear, collision coverage only covers damage that occurs from colliding with another vehicle or 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 do you need comphensive and collision? In that scenario, 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

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. It’s important to remember that collision vs comprehensive rates for State Farm will be different than 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. 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. 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 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.

Collision vs Comprhensive Insurnace: Do I need both?

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.

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. 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.

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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/month more per month. That means protecting what matters most fully may not be as expensive as you thought.

You probably know there are state minimum auto insurance coverages for most states that you must meet in order 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 what the average cost difference between full coverage and minimum coverage auto insurance is?

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 information on average rates for both coverage types, how various factors can affect your rates, and more.

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Minimum vs Full Coverage Auto Insurance

So just what is 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, a 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 greatly 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 for both liability and full coverage policies, and with two exceptions (Louisiana and New York) the cost of full coverage is significantly higher than the cost of liability coverage (the increase ranges between 10 and over 300 percent).

We also averaged the rates, to compare annual liability versus full coverage costs country-wide and found that 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 is 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 can purchase and still legally drive. Each state determines the minimum limits of auto insurance that a driver must carry in order to legally drive on the roadways. These minimum amounts of coverage for liability-only insurance vary greatly from state to state.

Take a look at this table (we’ve summarized data from the Insurance Information Institute on minimum state requirements) to see what we mean.

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 is 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 your own 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. When speaking about auto insurance, however, “minimum coverage” usually refers to a liability-only policy.

What is full auto insurance coverage?

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 in the event you are in a collision with another vehicle or object. Take a look at this video to learn more.

Comprehensive auto insurance on the other hand (also known as “other than collision”), provides financial protection in the event that:

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 extensive costs later. You should speak to a licensed insurance agent to find out 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. There are a number of factors that determine your auto insurance rates, so while the numbers we provided earlier are helpful as a baseline, your personal rates may be different.

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 where I live 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 rate in urban areas, auto insurance companies generally charge higher rates to those policyholders who live in the city.

This cost difference is generally calculated based on ZIP code (insurance companies look at the crime, accident, 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 determines your auto insurance rates. If you are under 25 years old, you are considered a higher risk driver. Unfair though it may be, your age works against you in terms of auto insurance rates if you are under 25.

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. However, basing rates specifically on gender is becoming a somewhat controversial practice, and there are states like California (among others) that have made this practice illegal.

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 in some cases, may even qualify for different types of auto insurance discounts because they’re married).

Take a look at this table to see some examples of 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 drives until they’re married and 35 (as shown in the table).

How does my credit score affect my insurance rates?

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 who are perceived to be a lower risk will pay lower rates.

Your credit score affects the auto insurance rates you will pay. Those with less than good credit are statistically more likely to be higher risk drivers.

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. In fact, 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, which is considered “good.” This is great news for drivers, since insurance companies offer the lowest rates to those with good credit scores

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 that everything comes down to risk? if you have a clean driving record, you’re clearly 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, as you can see the average difference between a clean record and one with an accident, DUI, or speeding violation can be significant. For example, if you’re insured by Geico,

• 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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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 find out the details about full coverage and liability-only policies, rates, and more. They will be able to answer any questions you many have about purchasing a policy.

The Bottom Line

Now that we’ve discussed liability versus full coverage, how your rates may be affected by various factors, what insurance is covered 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
• There are a number of factors that 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

FAQ

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

Is full coverage required?

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 be in violation of the loan contract. Finance companies may assign an insurance policy to the loan if, for some reason, your insurance policy is canceled.

What is the difference between full and comprehensive auto insurance?

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

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

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 it is required by your state. However, if it is not required, it can be added to your policy (speak to a licensed insurance agent on how to do 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). In addition, 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.

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 uninsured/underinsured motorist coverage is required by your state as a 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.

if uninsured/underinsured motorist coverage is not required by your state, it may be a good idea to speak with your insurance agent about adding it to your policy, particularly given that the average number of uninsured drivers on the road across the United State is about 13 percent.

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 for some of the major companies in the United States.

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

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 a number of other factors insurance companies consider.

These factors can include:

• Driving experience – how many years you’ve been behind the wheel; the more experience you have, the lower your risk and the lower your rates may be
• Commute length – the higher the number of miles you drive, the higher your chances of getting in an accident, so the higher your rates may be
• Coverage level – as you’ve already seen, the more coverage you have, the higher your rates are likely to be
• Vehicle – the more expensive your vehicle, the higher your rates may 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. So in addition to shopping around, 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. 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 good rates available to you!

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What is comprehensive auto insurance?

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

• No states require you to carry comprehensive insurance as part of your insurance plan. However considering 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.

Comprehensive coverage covers acts of nature, fire, vandalism, theft, etc.

No states require you to carry comprehensive insurance as part of your insurance plan. However, there are a couple of reasons that you will want to consider adding comprehensive insurance to your auto insurance package.

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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 need to finance a vehicle you need full coverage insurance, because your lender may have specific requirements for protecting that vehicle.

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, then drivers could go after your personal financing.

A lender requirement isn’t the only reason that you might want to consider comprehensive insurance coverage. Simply put, if you have a vehicle with more than $1000 value, then you will want to consider this coverage.

Not everyone owes money on the vehicle that they owe, but that doesn’t mean that they have the money to replace their car should it be vandalized, stolen, or damaged by severe weather.

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

If you don’t have a loan on your vehicle and you don’t carry comprehensive coverage, then 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 can take one of two actions. The lender can demand that you pay all of your debt or 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 virtually charge you 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 driver of the other vehicle 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 drivers in the accident can sue you if they feel they aren’t being 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.

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

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Do I need comprehensive auto insurance coverage?

You can drive in the US without comprehensive coverage, but you have to purchase it if you’re financing the car.

• Comprehensive auto insurance is optional insurance, not required by law in any of the states of the U.S.
• Automobile insurance coverage broadly falls into two categories: coverage for property damage (usually, but not always, damage to a vehicle) and coverage for injuries to people
• Comprehensive coverage does not cover normal wear and tear, nor does it cover any of the contents of the car
• Once the annual premium equals ten percent of the blue book value of the vehicle, it is time to consider canceling comprehensive coverage

Automobile insurance coverage broadly falls into two categories: coverage for property damage (usually, but not always, damage to a vehicle) and coverage for injuries to people.

The first type is broadly subdivided into “collision” and “other than collision” (OTC) – the latter type is also called comprehensive auto insurance coverage. 

It is important to understand these two types of insurance before searching for the best insurance rate for you.

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Collision Coverage

Collision insurance is coverage for pretty much anything you collide with. This could be hitting a tree or 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.

Broadly speaking, 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), and theft or vandalism.

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Comprehensive Coverage

Many people find the term “comprehensive” misleading or confusing. Some people jump to the erroneous conclusion that it covers any and 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 contents of the car.

Some things you might consider to be part of the car may also not be covered – for example, an upgrade to an expensive stereo system. It also typically does not 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.

When do you need comprehensive coverage?

Comprehensive auto insurance is optional insurance, not required by law in any of the states of the U.S. However, it can be required as a stipulation of the financing company.

In other words, if the car is still being paid off, the financing company may require comprehensive coverage.

If you paid cash for your car or if your car loan has been paid, you can choose to forego this type of coverage.

In some cases, skipping this type of coverage is a financially wise move. In other cases, it is not.

If your car is not worth more than a few thousand dollars and if there is no reason to believe the car is at higher than normal risk for the type of damage in question, it is usually best to drop comprehensive coverage as soon as you can.

The auto insurance company will not pay more in damages than the resale value of the car at the time of a loss (or the amount that would “total” the car), so a low-value vehicle is not really worth the cost of additional coverage.

One reason some people keep comprehensive coverage is when the vehicle is at a higher than normal risk of being stolen, either due to where you live or because it is a “popular” car to steal among car thieves.

What is the cost of coverage?

As with any type of auto insurance, if you can afford to absorb some out of pocket costs, a higher deductible can help bring the cost 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 one thousand dollars can lower the premium.

Other factors which influence the premium include the value of the vehicle, the age and driving record of the driver, how many miles per year the vehicle averages, and your neighborhood.

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

Like other types of insurance, the monthly premium is dependent on so many variables that the only reliable way to determine it is to seek a quote from an insurance company. Comprehensive insurance can be as much as one-third of the total premium for your total auto coverage.

As a general rule of thumb, once the annual premium equals ten percent of the blue book value of the vehicle, it is time to consider canceling this portion of your auto insurance (if it is not required by a third party).

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 the vast majority of 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.

Our FREE comparison tool can help you find out what coverage you need. Get started by entering your ZIP code below!