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Collision Insurance and Comprehensive Insurance Explained

It is important to be familiar with the different components of your policy, and that involves understanding some of the common phrases used. One such distinction is the relationship between comprehensive and collision insurance. Though similar, there are a lot of important differences.

Collision Auto Insurance

Collision insurance is what is used to cover the repairs to the vehicle in the event of a driving accident. More specifically, it’s used in a scenario where you are at fault for the accident, meaning you are the driver who caused it. Most collision insurance policies cover the cost of repairs as long as they are less than the actual cost of the car itself. Most states do not require a driver to get collision insurance, although it’s highly recommended. Comprehensive and collision insurance are almost always required is a vehicle is being financed.

 

Comprehensive Auto Insurance

Comprehensive insurance will kick in if the vehicle is damaged, but not for vehicle accidents. Any number of things can cause a vehicle to be damaged. Some of these include fire, hurricane, tornado, vandalism, or anything else that’s caused by an unknown party. In the event of weather or natural causes, the unknown party is referred to as an act of God. With both comprehensive and collision insurance, you’ll be reimbursed for repairs that don’t exceed the actual value of the vehicle, and it’s not a state requirement to purchase comprehensive insurance on your policy.

When to Get Comprehensive Auto Insurance

It’s always recommended for a driver to purchase comprehensive insurance, but in the interests of keeping premiums down some people understandably opt out of the coverage. It’s impossible to predict when one of these “acts of God” will occur, but geographic location is a deciding factor for whether or not you should get the added insurance. For example, vehicle owners in the Midwest might want to purchase comprehensive insurance to safeguard against tornadoes, which can be a huge threat in the summer. With these factors in mind it’s easier to make an informed decision.

When to Get Collision Auto Insurance

In short, any time you’re on the road you should be covered by comprehensive and collision insurance isn’t a bad idea. Unlike comprehensive insurance, which has a large geographic distinction, collision insurance is more susceptible to the general quirks of the road, and bad drivers are everywhere. If you find yourself in an accident with no collision insurance, your insurance provider may refuse to pay for the damages. Worse, you may end up liable for the damage to the second party’s vehicle, which would need to be paid out of pocket.

Although there are plenty of similarities between comprehensive and collision auto insurance, they still have enough vital differences to be considered separate levels of coverage. This is why it’s so important to understand the distinctions between the two.

 

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