What is comprehensive and collision insurance?

The difference between full coverage and the combination of comprehensive and collision insurance is the addition of state-mandated liability insurance and, in some cases, coverage for a driver’s medical care. Full coverage is generally defined as comprehensive and collision insurance plus a state’s minimum car insurance coverage.

While comprehensive and … read full answercollision coverage are not required by state laws, they are usually required on a leased or financed vehicle. Collision coverage pays for damage to the policyholder’s vehicle from an accident, regardless of fault. Comprehensive insurance, which is sometimes considered “bad luck” insurance, covers events outside of a driver’s control, like natural disasters and damage from animals. Because “full coverage” implies that everything is protected, comprehensive and collision are usually considered part of it.

The last component of full coverage insurance is a state’s minimum required insurance coverage. Almost every state requires liability insurance, which pays for damage the policyholder causes to other people and their property. In addition, some states require coverage that pays for the policyholder’s injuries in the event of a crash.

It is better to have comprehensive insurance than collision insurance, if you need to choose between the two. Comprehensive coverage is inexpensive, can be purchased alone, and pays for damage due to events beyond your control, such as vandalism, theft, natural disasters or run-ins with animals.

On the other hand, drivers with a history of accidents or moving violations and drivers who live in high traffic areas should consider investing in … read full answercollision insurance. Given that collision insurance cannot be purchased without comprehensive in​​surance, you’ll get the benefit of both types of coverage.

Why You Should Get Both Comprehensive & Collision Coverage

If your car is leased or financed, your lender or lessor will likely require you to purchase comprehensive and collision insurance together. But even if you do have a choice, you should still consider purchasing both types of coverage.

Collision and comprehensive insurance are best bought together because they cover different situations. Collision coverage repairs or replaces your car when it’s damaged in an accident, regardless of fault, while comprehensive insurance applies when your car is damaged by something other than an accident.

Ultimately, if you’re still struggling to decide whether to purchase comprehensive or collision coverage, a good rule of thumb is to skip either type if the cost is more than 10% of your car’s value. However, this is just a general guideline, and you should also consider whether you’re in the financial position to repair or replace your car if it’s damaged.

To learn more, check out WalletHub’s guide to collision and comprehensive insurance.

Comprehensive insurance covers damage to your car caused by events other than collisions with other vehicles or stationary objects. For example, comprehensive insurance helps pay for damage from vandalism, natural disasters, fire, and theft, but it does not cover vehicle repairs after hitting a car.

What Comprehensive Insurance Covers

• Theft
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• Vandalism
• Floods
• Fires (not related to a collision)
• Natural disasters
• Animal damage (including hitting a deer or other animal
• Glass damage

Comprehensive insurance is sometimes said to cover “acts of god” because it applies to things outside of a policyholder’s control that can’t really be predicted or prevented.

What Comprehensive Insurance Doesn’t Cover

• Collision with another vehicle
• Hitting a stationary object (such as a house or fence)
• Damage caused by the road surface (like potholes)
• Roadside assistance (including jump starts and towing)
• Rental car expenses after an accident
• Medical expenses

Key Things to Know About Comprehensive Insurance Coverage

Coverage Limits Are Based on Your Vehicle’s Value

The coverage limits for comprehensive insurance are determined by the vehicle’s actual cash value, so the more a car is worth, the more the insurer will pay in a claim.

Comprehensive Insurance Includes Deductibles

Deductibles typically range from $100 to $1,000 and must be paid before your insurer will cover the rest of the claim.

Comprehensive Is Usually Paired with Collision Insurance

Comprehensive insurance is often purchased in conjunction with collision insurance so the policyholder is protected from both accident-related and non-accident-related damage.

Comprehensive Insurance Is Not Required By Law

While no states require drivers to have comprehensive insurance, you may be required to purchase it if you have a loan or lease on your vehicle.

To learn more, check out WalletHub’s guide to comprehensive insurance.