Comprehensive Vs. Collision Auto Insurance: Here’s What You Need To Know

Collision and comprehensive coverage are two other crucial aspects of a good auto insurance policy. They pay for damage to your vehicle or reimburse you if it is stolen, which liability insurance does not.

Auto insurance policies are built on the foundation of liability insurance. It compensates people for the harm they create, and it is mandated in practically all states.

What Are Collision and Comprehensive Insurance’s Advantages?

Collision and comprehensive coverage are valuable additions to liability coverage:
If you collide with an object or another car, collision coverage pays for the damage to your vehicle.
Non-crash damage, such as weather and fire, is covered by comprehensive insurance. It also compensates you for car theft and damage caused by animal collisions.
Auto insurers frequently sell collision and comprehensive automobile insurance as a combination. Here’s how the various types of coverage stack up.

Examples of When a Collision Claim Might Be Made

  • Your automobile skids across the ice and collides with a railing.
  • To avoid a squirrel, you swerve and collide with a post.
  • Someone dings your automobile and then flees.

When You Might Be Able to Make a Comprehensive Claim

  • Your fender has been dented after colliding with a deer.
  • Your car is damaged by a garage fire.
  • Your car is damaged by a hailstorm.
  • Your car is stolen by a thief and is never found.

What is a Deductible in Insurance?

Deductibles are common in both collision and comprehensive insurance policies. The deductible amount will be deducted from a claim on collision or comprehensive coverage.

Deductibles of $250, $500, $1,000, and greater are common. If you are in an accident and your vehicle is damaged for $2,000 and your deductible is $500, the insurance company will pay $1,500 for your claim.
As a reward for good driving, several auto insurance companies offer consumers “diminishing deductibles.” If you don’t make certain claims, your deductible will decrease over time under these plans.

The Insurance Maximum Payout

The maximum possible reimbursement for both collision and comprehensive insurance is the value of the car shortly before the accident, minus the deductible amount, if the vehicle is totaled. When a car is deemed totaled, it must meet the following criteria:

It cannot be repaired in such a way that it is safe to drive.
The cost of repairs would outweigh the car’s value.

Repairs would cost more than a set percentage of the vehicle’s worth. In several states, a car is considered totaled if the repair expenses surpass 75% of the vehicle’s value.

Also, don’t think that because you have a new car, it will be more difficult to meet a threshold for wrecking it. Because new car technology is so expensive to maintain, cars are more likely to be totaled in an accident.

Is Collision and Comprehensive Insurance Required?

If you have a car loan or lease, the lender or leasing company will almost certainly require you to purchase collision and comprehensive coverage. That way, if your automobile is totaled or stolen, you won’t be able to walk away from your loan or lease.

Collision and comprehensive coverage will become optional after your car loan is paid off.
Even though collision and comprehensive coverage aren’t needed, you may still want them. Consider this: if your car was damaged or stolen, would you be able to afford repairs or a new vehicle? If the answer is no, collision and comprehensive insurance can help you save money.

However, as your car ages, collision and comprehensive coverage may become less valuable about the cost. If your car is stolen or written off, your maximum insurance payment will go down as its value goes down.
Consider the following scenario: you own a $3,300 2005 Honda Accord. Your insurance check will be $2,300 if your automobile is totaled in a flood and you have a $1,000 deductible. You can determine whether the cost of collision and comprehensive insurance over several years is worth the possible advantage.

According to the National Association of Insurance Commissioners’ most recent data, the average collision claim is $4,412.31. $1,359.04 is the average cost of a comprehensive claim.

What if my car is damaged by someone else?

Collision insurance is useful in circumstances where you’ve damaged your vehicle by mistake, such as backing into a pole. It can, however, be useful if someone else collides with you. You have two choices if this happens:
Claim the liability insurance of the other driver. If the accident was caused by someone else’s negligence, their liability insurance should cover the damage to your vehicle.

Make a collision insurance claim on your vehicle. Maybe you don’t want to deal with another person’s insurance company. You can instead file a claim with your collision insurance. The bad thing is that the amount of your deductible will be taken out of your insurance check.

How long does it take to repair a car that has been damaged?

According to CCC Information Services, a provider of data and services to the automotive, collision repair, and insurance industries, the typical repair period for cars is almost 11 days from the time you drop it off at the auto body shop to the time you pick it up.

The average repair time has risen over time, owing to growing vehicle complexity and “more sophisticated automobiles” that take longer to repair, according to CCC.

What About Rental Car Insurance?

When you hire a car, your auto insurance usually covers the rental, including liability, collision, and comprehensive coverage. That implies that unless you wish to avoid any claims on your policy, you won’t need to purchase the coverage offered at the rental counter, such as the collision damage waiver. Confirm with your car insurance agent if a rental is covered under your policy.

Rental reimbursement auto insurance will assist you in covering the cost of the rental. This is a form of extra coverage that helps pay for a rental automobile if your car is damaged in an accident covered by your insurance policy.

Any rental costs that exceed the rental reimbursement coverage restrictions must be covered by you. For example, if you have a $30 per day limit for a maximum of 30 days, any amount over the daily limit or that exceeds 30 days must be paid out of pocket. You might be able to get larger limitations if you shop around.

What Comprehensive and Collision Insurance Doesn’t Cover

Even though collision, comprehensive, and liability insurance covers a lot of things, they don’t cover the following:

Injuries sustained as a result of an accident. (Depending on the situation, your injuries may be covered by the insurance of the other driver, your injury protection or medical payments insurance, or your health insurance.)

Laptops and wallets have been stolen from your car. (Instead, consult your homeowner’s or renters’ insurance policies.)

Stolen Vehicles in the Auto Insurance Spotlight

According to the current National Insurance Crime Bureau (NICB) Hot Spots report, a car is stolen every 36 seconds. COVID-19 did not affect car thieves. Following a year of a drop in auto thefts in 2019, the number of vehicle thefts jumped to 880,595 in 2020, up from 794,019 in 2019.

An auto insurance policy’s comprehensive coverage pays the value of your vehicle if it is stolen, but the greatest protection maybe a few preventative measures. The NICB suggests the following four safeguards:

It’s only common sense. Remove your keys from the ignition, lock all doors and windows, and park in well-lit areas at all times.

Devices that sound an alarm. Think about car alarms and other things that can be seen, like steering wheel collars, brake locks, and steering wheel locks.

Devices that immobilize people. These keep burglars from turning off your car’s ignition (such as hot wiring). Smart keys, fuse cut-offs, kill switches, wireless ignition authentication, and starter, ignition, and fuel pump disablers are just some of the options.

Devices that track your movements. Most of the time, these systems use GPS and wireless technology to let you know if your car has been moved and to track and keep an eye on its location.

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