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Difference Between Comprehensive vs Collision Car Insurance
Choosing the right car insurance policy can be daunting, especially when choosing between comprehensive and collision coverage. Both will provide coverage to the car but for different reasons—comprehensive coverage covers other incidents of loss, such as theft, vandalism, or natural disasters.
In contrast, collision pays for damages if one car crashes into another or an object. Knowing the difference between the two will allow you to ensure proper protection for the car. Keep reading to find out which insurance is right for you!
What is Collision Car Insurance?
Collision Insurance provides coverage for vehicle damage resulting from a collision. An accident could involve a collision with another car or a stationary object. Collision insurance pays for repairs to your car whenever you suffer a loss.
Unlike other types of insurance, collision coverage only applies to your vehicle, regardless of who is at fault. If you finance or lease your car, lenders often require this coverage. However, if you own your car outright, you can decide whether it's worth keeping based on your car's value and the costs of repairs.
What is Comprehensive Car Insurance?
Comprehensive car insurance covers damage caused to your vehicle because of factors other than collision, i.e., theft, vandalism, fire, and floods, as well as storms or striking an animal. It protects your car against unexpected hazards, which are often beyond your control.
Unlike collision insurance, comprehensive coverage does not cover accidents with other vehicles or objects. Adding extra protection that is worth the cost is often required.
Key Differences Between Comprehensive vs Collision Car Insurance
Understanding the difference between comprehensive and collision insurance helps you select the appropriate coverage for your vehicle. The table below breaks down the differences between the two:
Do You Need Both Collision and Comprehensive Insurance for Your Car?
Having collision and comprehensive insurance depends on your car's value, financial situation, and risk factors. Collision insurance covers damages from accidents, while comprehensive insurance protects against theft, natural disasters, and other non-accident-related damages.
Whether the car is new or an antique, both types of insurance provide full coverage in both cases. If you own an older car, it is not worth much money, so keeping both is a waste of money. For instance, if you have a five-year-old sedan worth 5 lakhs rupees and you are involved in an accident, the repair cost will be covered by collision insurance. However, only comprehensive insurance would be effective if floods damaged the car.
Without those two, you would need to pay the cost of repairs from your own pocket. Additionally, if your car is 15 years old and worth ₹80,000, it may not be worth getting both insurance policies, as the repair cost could exceed its value.
Pros of Collision and Comprehensive Car Insurance
Collision and comprehensive insurance provide valuable protection against various types of risks. The table below highlights their key advantages:
Cons of Collision and Comprehensive Car Insurance
While both types of insurance offer essential protective coverage against some risks, they also have disadvantages. The table below summarises their key disadvantages:
How to Choose the Right Car Insurance Coverage for Your Needs?
Choosing the correct car insurance coverage can be a daunting task. To make things easier, below is a checklist that will help you choose the insurance coverage that you need:
Assess Your Car's Value
Assess the current value of your car. New cars or those of high value may need comprehensive coverage. Meanwhile, older vehicles might not be worth the extra collision insurance premium.
Determine Your Budget
Consider how much you can pay as an annual premium. Calculate and strike a balance between the cost of the repair and the insurance premium rates.
Understand Your Risk Factors
In addition to your residence, driving frequency, and parking in hazardous areas, the risk to your car is also determined. If that's the case, comprehensive coverage could be a reasonable option.
Decide if You Need Additional Coverage
If you want two-way protection, consider coverage such as roadside assistance, rental car coverage, or gap insurance. They will undoubtedly cost extra, increasing your premium, but they will also provide additional security.
Compare Policies and Providers
Research and compare all available insurance providers. Keep an eye on the policy's rules and their credibility in customer service. Pricing is also a factor that ensures you get full value for your coverage.
Deductibles in Comprehensive and Collision Car Insurance
A comprehensive and collision deductible is usually the amount you must pay out of your pocket before any insurance coverage kicks in.
- For collision insurance, the deductible applies when your car is damaged in an accident, whether or not you are at fault.
- For comprehensive insurance, the deductible applies if your car is damaged due to non-collision events, such as theft, vandalism, or weather-related incidents.
The deductible amount can vary depending on your policy. Generally, the higher the deductible, the lower the premium.
For example, if your deductible is ₹5,000, you would pay ₹5,000 before the insurance company covers the rest. It's essential to choose a deductible amount that fits your budget, as it affects both your monthly premium and how much you'll pay in the event of a claim.
Which is Better - Comprehensive or Collision Car Insurance?
Choosing among them ultimately depends on your car's value, driving conditions, and financial situation. Several factors should be considered while weighing between collision and comprehensive insurance, including:
Coverage Scope
Comprehensive coverage protects against theft, vandalism, natural disasters, and damages resulting from causes other than collision, whereas collision coverage specifically covers damages resulting from collisions.
Car Value
Collision insurance may be more cost-effective if your car is old or has depreciated. Paying for repairs out of pocket could be cheaper than premiums.
Risk of Theft or Vandalism
If you live in a neighbourhood with several theft cases, comprehensive insurance will prove more beneficial as it covers damages due to events beyond your control.
Weather and Environmental Risks
Flood, storm, or forest fire-prone regions require comprehensive insurance to ensure timely payouts in the event of damage caused by natural disasters.
Best of Both Worlds
Some people opt to keep both insurance policies for their car, which is considered a prudent choice for new cars. For older cars, selecting insurance with lower premiums is a more cost-effective option.
FAQs about Comprehensive vs Collision Insurance
What is the main difference between collision and comprehensive car insurance?
Collision insurance protects against damage to the vehicle in the event of a collision accident, while comprehensive insurance offers protection against damage caused by theft, vandalism, and natural disasters.
Do I need both collision and comprehensive coverage for my car?
It entirely depends on the value of your car and your budget. Both offer full protection, but you may only need one depending on your situation.
Is collision insurance more expensive than comprehensive insurance?
Collision insurance is often slightly more expensive than comprehensive coverage, but the cost can vary depending on the car and other factors.
Does comprehensive insurance cover theft and vandalism?
Yes, comprehensive coverage pays for damages from non-collision incidents, which include theft, vandalism, and damage done by weather events.
What does collision insurance cover in a single-car accident?
In a single-car accident, collision insurance pays for the damage to your car due to crashing it into another object, a tree or a guardrail.
When should I consider dropping collision or comprehensive insurance?
Consider dropping coverage if your car's value is low and the premiums exceed the potential payout in the event of an accident or damage.
Can I combine collision and comprehensive insurance in one policy?
Yes, one can combine both types of insurance into a single policy for enhanced protection. Most comprehensive car insurance plans already include collision coverage as part of their broader protection.
How do deductibles work for collision and comprehensive coverage?
Collision coverage almost always has a higher deductible or amount you need to pay for the repair bill before insurers get started on the rest. Comprehensive coverage typically has a lower deductible; therefore, the upfront amount is not too high before the insurance company assumes other costs.
Is it mandatory to have comprehensive or collision insurance?
It's not mandatory unless your lender requires it in leases and loans. However, owning a car requires having insurance.
How do I determine the right type of insurance based on my car's value?
Both coverages are recommended for newer and more valuable cars. For older cars, comprehensive coverage may be sufficient, and you may consider dropping collision coverage if the car's value is low.
Do I need to have collision insurance if my car is old?
You may not need collision coverage if your car is old and has a low resale value. It is essential to analyse whether collision insurance premium costs outweigh the value of your car.
Can I cancel one type of insurance and keep the other?
Yes, you can cancel one type of insurance, but ensure you're still adequately covered based on your car's condition and needs.
Will I get paid the full value of my car under comprehensive or collision insurance?
Comprehensive insurance can pay the full value of your car if it is met with an accident. However, you'll need to file a claim for total damage.