No matter where you live or the driving conditions of your area, as a driver, you are required by law to own car insurance. With the overwhelming variety of policies available through your insurer, choosing the right insurance policy for yourself might seem daunting. It may seem simpler to buy the cheapest policy and call it a day. However, the cheaper option might not help you in the long run, providing lesser coverage in the event your car is damaged. Comprehensive and collision insurance are two common choices, and either or both might be right for you.
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What is the Difference Between Collision vs Comprehensive?
Collision insurance covers damages caused by accidents between two vehicles. Comprehensive insurance handles damage caused by non-collision accidents such as vandalism, animals on the road, or weather-related incidents (for example, a fallen tree or hail).
Related: When Is Collision Coverage Worth It?
Which is Better: Collision or Comprehensive Insurance?
Because collision and comprehensive insurance have separate uses, neither is overall the better choice. Depending on your location and the kind of damage that your car will most likely encounter, you might find one to be more useful than the other. For instance, collision insurance will benefit people living in rougher terrain, as collision covers pothole damage as well as car-on-car collision accidents. Furthermore, city dwellers might want collision insurance to cover potential damages of getting clipped on narrow streets.
On the other hand, those who live in stormy areas would prefer comprehensive insurance because this policy covers damage caused by extreme weather, such as a tree falling over from harsh winds or dents made by hail. Comprehensive insurance would also come in handy for residents of theft-prone neighborhoods.
Do I Need Both?
Bundling these two insurance policies may be beneficial, depending on your circumstances. If you often drive long distances, increasing the chances of any kind of damage to your car, be it an accident on the freeway (covered by collision) or hitting a deer or other animal (covered by comprehensive), you should consider getting both. However, if your car is not estimated at a high value, spending extra on both insurances is not worth it. Similarly, if you would be able to pay any repair costs out of pocket, both insurances might be unnecessary. After you determine which of these factors apply to you, deciding on an insurance package will be easier.
When Should You Drop Collision and Comprehensive Coverage?
Because insurance companies only cover repair costs up to the worth of your car, you would do better to opt out of collision and comprehensive insurance with older or less valuable cars. If an accident causes damage that exceeds the car’s worth, insurance will consider the car totaled.
When faced with repairable damage without collision or comprehensive coverage, you can determine whether the car is worth paying out of pocket for or if you ought to simply take the insurance payout and look for a replacement vehicle. Be aware that you can change your mind about your coverage: If you currently have coverage, you can decide to drop it later as your car ages and diminishes in value. That way, you car is covered during the years it’s most beneficial to you.
Because collision and comprehensive insurance have complementary uses, choosing to have both, one, or neither can be a complicated decision. In the end, it all depends on the factors most likely to affect you—the most common ways in which your car might get damaged. As long as you consider your location, the value of your car, and what coverage you can afford, the decision should become simpler. While there is no right or wrong answer when choosing your coverage, don’t be afraid to ask your agent about your options.