Figuring out which auto insurance coverage to pay for can be pretty confusing. You want the right amount of protection, but you also don’t want to spend too much on insuring your car if it’s not that valuable.
There’s also only so much money that we want to spend on auto insurance.
You know that you need auto insurance to get your vehicle on the road. You just don’t know what kind of coverage to go with when it comes to comprehensive vs collision auto insurance because you already have enough expenses to worry about.
This article will help you decide between collision vs comprehensive auto insurance coverage…
What’s comprehensive insurance vs collision auto insurance like compared to just liability auto insurance? Are there any major differences?
The differences between the different levels of auto insurance are pretty major when it comes to pricing and protection.
Everyone has a different opinion on auto insurance and insurance policies in general (as you’ve seen in our extensive research on renters insurance).
Some folks will purchase the cheapest policy possible just to get the vehicle on the road. Others will want to spend the money on adequate coverage so that they don’t have to worry about any issues in the future.
How do you decide on the better option between collision vs comprehensive auto insurance coverage?
Comprehensive vs collision auto insurance: What are the differences?
It can be challenging as a personal finance writer to recommend insurance options because there are no one-size-fits-all answers when it comes to the topic.
Let’s see what some other financial experts had to say about comprehensive vs collision auto insurance…
The team at Forbes wrote this about the topic of what is comprehensive insurance vs collision auto insurance:
“Collision coverage pays for your vehicle’s damage if you hit an object or another car.
Comprehensive insurance pays for non-crash damage, such as weather and fire damage. It also pays for car theft and damage from collisions with animals.”
As you can tell, there’s simply more protection with a comprehensive insurance package. You never know when you’re vehicle can get damaged through no fault of your own.
This article on NerdWallet looked at the main differences between comprehensive and collision insurance:
“The main difference between comprehensive and collision insurance is the scenarios they cover. Collision insurance pays for damage to your car if you hit an object or another vehicle, while comprehensive coverage pays for theft or damage from causes such as bad weather, fire or fallen trees.”
It’s tempting to be optimistic, but you have to consider all possible options when looking through insurance policies.
We checked an actual auto insurance website to see how they would describe the differences. Here’s what the team at Allstate had to say about collision vs comprehensive auto insurance.
“Collision coverage helps pay to repair your car if it’s damaged in a collision with another vehicle or object, such as a fence. Generally, collision coverage comes into play because a driver gets into a car accident.
Comprehensive is a separate coverage from collision. It helps cover different types of losses that are usually not the result of driving the vehicle, such as theft, hail or fallen trees.”
You can also check out our Allstate Renters Insurance review for more information on the company.
Hopefully, you have a better understanding of the differences between collision vs comprehensive car insurance. Let’s dig a little deeper now.
What’s covered with collision auto insurance?
What’s the exact coverage that you can find with a collision auto insurance policy? We looked through different policies to determine the differences between collision insurance and the other types of car insurance out there.
Here’s what collision auto insurance will pay for:
- Vehicle damage when someone else hits you.
- Damages to your automobile in an accident that you may cause.
- The damages done to your vehicle if you hit an object (pole, stop sign, etc.).
These are all scenarios that could happen to anyone at any given time. I was hit from behind once when I was at a stop sign and luckily my insurance paid for all of the damages. I would’ve been down thousands of dollars if I had to pay out-of-pocket for the damages.
What’s covered with comprehensive auto insurance?
Now that you’re considering the different situations where you may need auto insurance, it’s time to see what kind of protection comes with this level of coverage.
What’s exactly covered with comprehensive auto insurance?
Comprehensive auto insurance means that you get the value of your vehicle if it gets stolen or for some reason you can’t recover it from damages in these scenarios:
- Extreme weather situation (hail, snow, tornado, etc.),
- Something falls on your vehicle.
- Riots or any civil disturbances.
Comprehensive auto insurance is pretty much exactly what it sounds like. You protect your vehicle from all kinds of possible scenarios that could destroy it.
As always, we urge you to go over your comprehensive auto insurance policy to see what’s covered depending on where you live and other personal factors.
Which auto insurance is ideal for your situation?
Now that you know what’s covered with both levels, let’s continue the discussion about comprehensive vs collision auto insurance to see which is the better option.
The aforementioned article on Forbes presented this interesting statistic from the Insurance Information Institute about collision vs auto insurance.
“Nationwide, 73% of drivers with auto insurance buy collision coverage, and 77% buy comprehensive coverage.”
The article also shares this piece of information about the rates from data obtained from the National Association of Insurance Commissioners:
“Nationally, the average cost for collision coverage is $363 a year and the average cost for comprehensive insurance is $160.”
The price difference isn’t light and this is why we wanted to include actual numbers so that you have some information to help you make this decision. It’s important that you obtain a few different quotes so that you see the entire spectrum of options for your insurance policy.
There’s actually a formula for deciding between the types of insurance according to the Insurance Information Institution:
“Consider dropping collision and/or comprehensive coverages on older cars. If your car is worth less than 10 times the premium, purchasing the coverage may not be cost effective.”
So take your annual premium and multiply it by 10. This should help you land on your answer when it comes to collision vs comprehensive car insurance.
You don’t have to guess about the right auto insurance coverage. You can use this formula to see if you could save some money on auto insurance because there’s no sense in overpaying if you can save money for other things in life.
What did regular people have to say about comprehensive vs collision auto insurance?
We searched the phrase “Reddit comprehensive insurance vs collision” just to see what regular folks were saying about this insurance coverage. It’s important to look over multiple sources before making a decision on car insurance since this will impact your monthly budget.
Here’s what we were able to find about comprehensive vs collision car insurance on Reddit…
Those are some interesting situations to think about. Only you can answer the questions about your financial situation. It’s important that you look at your emergency fund/savings account to see what kind of protection you have on your own.
Reddit user @Nilpunk9 wrote in on this Reddit comprehensive vs collision auto insurance thread with the following point on switching to liability insurance:
“The time to switch to liability is when you no longer have any loans on the vehicle and your emergency fund is more than sufficient to buy a replacement.”
As you may know, an emergency fund is a popular topic in the personal finance community and it’s definitely a discussion for another day. It’s just critical that you think about your own financial situation when you’re looking at different auto insurance quotes.
This article should help you figure out the differences between comprehensive vs collision auto insurance so that you can make an informed decision based on your situation. Hopefully, you find the ideal car insurance policy for your current situation.