When it comes to purchasing car insurance, you have many different options. Drivers who buy brand new cars often want comprehensive insurance to cover any situation; other drivers are only concerned with how much collision coverage they have.
How many drivers choose each type of insurance? What are the comparison statistics like between the two largest categories of coverage in the U.S.?
Today, find out in our deep dive into seeing the difference between comprehensive and collision coverage for your car insurance.
Comprehensive versus collision insurance explained
Before getting into the statistics of how many drivers get each type of coverage, it’s essential to understand the actual difference between them.
What is comprehensive car insurance?
Comprehensive car insurance is the part of your car insurance policy that will cover damages that happen to your car for things other than a collision. For example, a fire or natural disaster could cause damage to your vehicle, and a comprehensive car insurance policy would cover these.
What is collision coverage?
When it collides with another vehicle or an object related to driving on the road, such as a guardrail, damages that occur to your car are handled by collision coverage.
Statistics: Comprehensive vs. collision coverage
74% of US drivers have collision coverage, and 78% of drivers have comprehensive coverage. This data comes from the Insurance Information Institute, which works to find out more about how people utilize insurance in the modern age.
How are comprehensive and collision coverage similar?
These two types of coverage have a lot in common because they are both types of personal car insurance that help cover damages done to your car in specific circumstances. Neither of these types of cover requires a limit, as the coverage limit is typically the value of your car.
Additionally, these policies often require drivers to choose a deductible when selecting between different coverage options. This means that you would need to pay a certain amount before the coverage would kick into effect. You can choose a lower deductible for both of these coverage types by paying a larger premium each month.
While these two types of coverage can be bought separately, they are often bundled by insurance companies. Most state laws say that these types of coverage are optional. However, your bank or lender may require you to buy these coverage policies if you do not own your car outright.
How are comprehensive and collision coverage different?
The primary difference to be understood between collision and comprehensive coverage is what type of damage the policies cover.
Collision coverage is used for incidents involving another vehicle or caused by the driver hitting an object. Comprehensive insurance coverage is used when events outside of the driver’s control cause damage to their vehicle. Collision coverage is typically much more expensive than comprehensive coverage because of the difference in the plan’s coverage.
What are full coverage and liability insurance policies?
You may be wondering about liability versus full coverage car insurance and how these types of policies fit into the grand scheme of personal car insurance.
Full coverage insurance is a term often used to describe the bundling of comprehensive and collision coverage. Full coverage insurance does exactly what the title suggests and covers damages caused by a wide variety of situations, from accidents to natural disasters.
Liability insurance is the part of your insurance coverage that will handle paying for property damages outside of your car if you are at fault for the accident. Your property damage liability insurance policy would cover damages done to another vehicle, for example, if you were in a two-car accident and responsible for the incident.
Deciding what type of policy you need
As comprehensive and collision insurance are optional types of car insurance, you might have trouble figuring out what type of policy you need. There are a few different factors that you can take into consideration when you are determining if you should have these policies in addition to liability insurance or not.
Can you afford an accident?
The first thing to consider is whether or not you’d be able to repair or replace your car if you were in an accident. If that would be financially devastating, you should invest in comprehensive and collision insurance to avoid a bad situation.
Is your car worth it?
Some cars are not worth insuring as much as other cars. If you have a car that is not worth very much, you might not want to pay for comprehensive or collision coverage. Even if your vehicle was completely totalled, you would not receive much from the coverage.
Do you drive frequently?
The more you drive, the more likely you are to be in an accident. If you drive long distances daily, it is in your best interest to get full coverage auto insurance.
Where do you live?
Your car insurance needs to fit your location. If you live in an area where natural disasters are common or weather-based issues can cause car issues, having extra coverage is a good investment.
Consider your options carefully
Choosing a car insurance plan can be complicated because there are many options. Now that you know more about the difference between comprehensive and collision coverage, it will be easier to decide if these types of coverage are worth it for you.
Remember, most states do not require more than liability coverage for your car insurance. If you cannot or do not want to have more coverage than what is legally required, you are not obligated to carry that insurance. However, it may be in your best interest to consider expanding beyond basic liability insurance.