What is comprehensive and collision coverage?
If you are in the market for car insurance, you need to know the difference between comprehensive and collision coverage. They are fairly simple to understand, yet are often confused with one another. Maintaining insurance for cars is important in order to protect you in case of an accident, rollover, or an act of nature. If your car is leased or financed, you will be required to carry full coverage. If you own your vehicle outright, you have the option in most states to carry only liability. However, it may be in your best interest to consider comprehensive or collision as well, as long as the cash value of your vehicle is over $4,000.
Collision coverage is the type of insurance that covers you when you are involved in an accident with another vehicle – whether you hit another vehicle, or if they hit you. Collision also covers you when you hit another non-living object, such as backing into your neighbor’s mailbox, hitting a tree, or side-swiping a utility pole. It also covers your vehicle if it rolls or overturns in any way.
Comprehensive insurance – also known as “other than collision” insurance – generally pays for claims that result from something other than a collision with another vehicle or non-living object. Hitting animals with your vehicle falls under this type of car insurance. If your car is vandalized, comprehensive covers the damage. It also covers you when your car is stolen. All incidents involving glass fall under this type of insurance, including broken or shattered windshields or windows.
Natural disasters, or other acts of nature are covered under comprehensive as well. This includes storms, tornadoes, hurricanes, earthquakes, floods, fires, or hail, just to name a few. Falling objects are also covered under comprehensive. If you find that a gigantic tree branch crushed your windshield while you were away from your vehicle, the damage would fall under this type of insurance for cars.
When considering either collision or comprehensive insurance for your car, keep in mind that auto insurance only pays out the cash value of your vehicle. If you have an older vehicle that is not worth much, it may not necessarily be in your best interest to carry either of these types of insurance. Especially if your deductible is near the same price as the cash value pay out would be for your vehicle.
Disclaimer: This is for information purposes only and NOT a recommendation from Mills Insurance. Please contact a licensed insurance specialist to discuss insurance coverage’s and laws.