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Comprehensive and collision coverage – what is the difference?


A typical auto insurance policy includes three primary types of coverage.  These are liability, comprehensive (sometimes referred to as “other than collision”) and collision.  Liability is the coverage that pays for damages that you cause to another party whether it is bodily injury or damage to their property.  Comprehensive and collision are what covers you and your vehicle.  So what’s the difference between these two types of coverage, and why are they important to you as a driver? 


Comprehensive coverage will pay for damages that are considered to be “acts of God” or events that occur that are out of your control.  These can include hail damage, theft, fire, impact with animals, falling objects and broken windows just to name a few.  The list is extensive and generally includes damages to your vehicle that are accidental or unavoidable.  There is usually a deductible which means that you pay a portion of the repair cost and the insurance company will pay the remaining balance.


Collision coverage is protection for your car when it is involved in a crash with another vehicle or some type of stationary object.  This would include crashing into another vehicle, another vehicle crashing in to you, hitting a pole or mailbox, colliding with a tree or a building or some other stationary object.  These types of accidents are usually avoidable and are within a driver’s control, so therefore they would fall under your collision coverage.   There again, you pay a deductible and the insurance company pays the balance of the repair bill. 


If you are financing your vehicle, the finance company will normally require you to carry both comprehensive and collision coverage on the car until your loan is satisfied.  What if your car is paid for?  Do you still need to purchase comprehensive and collision coverage?  The answer to that question depends on several factors.  How old is your car?  Can you afford to purchase another vehicle if yours is totaled in an accident?  Does the current value of your car justify the cost of the insurance?  Generally speaking, your policy will reimburse you for the current cash value of your vehicle, not the original value.  Determine what the value of your vehicle is and what you are paying for your insurance and see if it makes sense to pay the additional premium.    If your vehicle is a bit older and has less market value, you can also consider raising the deductibles on your comprehensive and collision coverage to save money on your premium, but continue to carry the insurance just in case you need it.






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