Pretty much everyone knows that if you drive a vehicle, you need to have car insurance, but car insurance still can be confusing to many people. There are so many terms and conditions when it comes to car insurance, and it can be hard to know exactly what coverage you need and what you are getting.

Comprehensive and collisions insurance are two types of insurance add-ons that insurance advisors will usually mention and ask if you need it. Many people will not know it because they just want basic insurance to keep premium costs low. Learn about what comprehensive and collisions car insurance is and whether they are worth adding to your policy or not.

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What is comprehensive insurance?

Comprehensive car insurance is a type of insurance coverage on your policy that covers most damages unrelated to getting into a car crash. Another word people know comprehensive insurance as is “other than collision” insurance. If you are financing or leasing your vehicle from a lender, then be prepared to need comprehensive insurance as a requirement on your lending agreement.

Comprehensive car insurance covers theft, fire, or damages from bad weather. Comprehensive insurance is essential for these situations because getting the damages caused by these situations fixed can be costly, especially if you have a more expensive or foreign vehicle. Your insurance provider will pay to have these damages repaired with comprehensive car insurance.

Comprehensive Insurance Scenario

For an example of comprehensive insurance, imagine that you have a nice expensive Porsche that you love and value very much. You drive this vehicle a lot during the summertime, but since you live in Maine, where it snows, and there are icy roads in the winter, you store it covered in your driveway to keep it in good shape for next summer.

While your Porshe is stored in your driveway, some kids from down the street see it and decide they want to pull a prank on you. They come and spray paint the Porsche and also break a window. You are very upset and know repairing this will cost a lot, so you call your insurance company. The insurance company lets you know that since you have comprehensive insurance on the Porche, you can submit a claim to have the insurance company cover the damages.

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What is collision insurance?

Collision insurance will cover any damages caused by your vehicle colliding with another car. With collisions insurance, when damages happen, the insurance company may pay out to have the car repaired, or you may be able to get a car replacement if the vehicle is totaled. Similar to comprehensive insurance, if you are financing or leasing your vehicle, your lender will most likely require collision insurance on your policy.

When any damage happens, that would be covered under collision insurance, and the insurance company will pay for the damages minus the deductible. The deductible is the amount you agree to pay when making an insurance claim. Deductible amounts range from $250 to $2000.

Collision Insurance Scenario

For an example of collision insurance, imagine you are driving your honda civic to work during a busy morning rush hour. You come to a four-way light, and it is your time to cross on the green light; the car from the other direction with a red light runs the red light and t-bones your car. Your bumper falls off, and your car door is significantly damaged, but you are okay. You call your insurance company, and they let you know that because you have collision coverage, the insurance company will cover the cost for your car to be repaired.

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Comprehensive VS Collision insurance Coverage

Here’s a chart that gives you an understanding of what damages comprehensive and collision insurance would cover:

Comprehensive insurance covers when…Collision insurance covers when…
Someone stole your vehicleYou have hit another vehicle
Your car was in a fireAnother car has hit you
A natural disaster such as an earthquake or tornado damaged your vehicleYou hit an object with your vehicle
Animals attacked and damaged your vehicleYour vehicle rolls over while you are driving
Something fell on your car and causes damage
Someone vandalized your vehicle

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How to decide if you need comprehensive or collision insurance

Now that you have a basic understanding of what comprehensive insurance and what collision insurance is, you will need to determine whether you need it on your policy or not.

For starters, as mentioned before, if you are financing or leasing your car from a lender, you will likely have some coverage requirements to get and keep your vehicle. Some places may require coverage to only a certain amount. Check with your lender to see what type of insurance coverage will be required on your policy.

If you will be driving your car, then collision insurance is something you should highly consider adding to your policy. If you get into a car accident and have collision insurance, you will only have to worry about paying the agreed-upon deductible. Your insurance company will pay for the damage repairs or a new vehicle. Collision insurance is essential if you are someone who drives a lot, like if you use your car to commute to work during rush hour every day or if you often need to drive in the snow or on icy roads. Collision insurance should be added to your policy if you have any factors that increase your risk of getting into an accident, from frequent use to dangerous conditions.

Comprehensive car insurance is good to have for times when you are not using your vehicle, but there is still the risk that it could get damaged. Some reasons why people consider getting comprehensive car insurance are if they live in a neighborhood where there is a lot of crime, or maybe they live somewhere where there is a high risk of avalanche, or there’s a lot of wildlife known for damaging cars.

Sometimes people will get only comprehensive car insurance and not collision because they will be away for a long time, or they understand the vehicle will not get driven for a long time. If someone has a car they only operate in the summertime, and then they put it away for the winter, they will often get comprehensive car insurance just in case there are any damages when the car is not in use.

Another thing to consider when you decide what type of auto insurance coverage is right for you is the value of your vehicle. If you have a car that is just sitting in your yard or garage unused and the vehicle is not very valuable in the first place, then there might not even be a point in getting comprehensive coverage on that vehicle. If the car is so old that the only use it has now to be sold for parts, don’t bother getting extra coverage because it will likely not be helpful.

Some people think that they shouldn’t need additional coverage on their auto insurance policy because they are good drivers and have never been in a car accident. This is a dangerous way of thinking because damage to your car does not only depend on you, it also depends on everyone else on the road, the weather, nature, etc. It is better to wait for extra coverage than to regret not getting the extra coverage when you have a huge bill and stress if anything happens.

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Getting suitable car insurance

It is essential to understand your car insurance policy and ensure that you get an appropriate policy and coverage for your situation. Do some research into different car insurance companies to see what they offer and their premiums. Contact the insurance companies to talk to a certified insurance advisor who will be able to take a look at your situation and recommend you the best coverage for your needs. Read reviews and ask around about insurance companies to see what other people have to say about them.

Car insurance is supposed to be a form of security, so you don’t end up with an enormous repair bill in the case of an incident or event, so make sure that the insurance company you choose has their company’s best interest as their priority.

Be careful when speaking to insurance advisors as many of them have sales quotas to meet and will try to upsell you add ons that you do not need, so be ready to ask questions so you can get a full understanding of what they are offering you and if you need it or not.

Adding either of these types of insurance coverage to your auto policy will increase your premiums, so you are only getting what you need and consider the risk if you don’t get the coverage. The cost will also vary based on the value the insurance company believes your vehicle is.

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