Are you confused about the difference between collision and comprehensive auto insurance? It’s common to have questions about the different types of coverage available when it comes to protecting your vehicle. In this article, we’ll take a closer look at collision and comprehensive insurance and compare the two.
Collision Insurance
Collision insurance covers damage to your vehicle when it collides with another vehicle or object. This type of coverage is required by most lenders if you have a car loan. Collision insurance also covers damage caused by potholes or other hazards on the road.
When you file a claim, your insurance company will pay for the cost of repairs up to the value of your vehicle. If the cost of repairs exceeds the value of your vehicle, your insurance company may declare it a total loss and offer you a payout based on the value of the vehicle.
Collision insurance typically has a deductible, which is the amount you pay out of pocket before your insurance kicks in. The higher your deductible, the lower your premium will be.
Comprehensive Insurance
Comprehensive insurance covers damage to your vehicle that occurs outside of a collision. This includes damage from things like theft, vandalism, fire, and natural disasters.
Like collision insurance, comprehensive insurance also has a deductible. If you file a claim, your insurance company will pay for the cost of repairs up to the value of your vehicle. If the cost of repairs exceeds the value of your vehicle, your insurance company may declare it a total loss and offer you a payout based on the value of the vehicle.
Which One Should You Choose?
The type of coverage you choose depends on your individual needs and budget. Collision insurance is typically more expensive than comprehensive insurance, but it’s required by most lenders if you have a car loan. If you have an older vehicle that’s not worth much, you may want to consider dropping collision coverage to save money on your premium.
Comprehensive insurance is a good choice if you’re concerned about damage from things like theft, vandalism, or natural disasters. If you live in an area prone to these types of incidents, comprehensive insurance can give you peace of mind.
Conclusion
When it comes to auto insurance, it’s important to understand the different types of coverage available. Collision insurance covers damage from collisions with other vehicles or objects, while comprehensive insurance covers damage from things like theft, vandalism, and natural disasters. The type of coverage you choose depends on your individual needs and budget. Be sure to compare quotes from multiple insurance companies to find the best coverage at the most affordable price.