When you are choosing auto insurance, it is important for you to learn about the different insurance options that you have available to you. One of the most confusing things about these options are deciding between comprehensive coverage and collision coverage. This will take a closer look at these two auto insurance options so that you can determine which one is the best fit for you.
Comprehensive insurance covers your car when it doesn’t collide with an object or another vehicle. What this means is that comprehensive coverage protects you if your car was damaged due to natural disaster, vandalism, theft, or a fire. These are just a few of the cases where comprehensive coverage protects you.
Collision insurance covers drivers if they hit another car, object, or if you drive over an obstacle like a pothole and damage your car. It is important to know that this doesn’t cover the damage to the other person’s car, just yours. Liability insurance will cover those costs.
There are a few similarities between both of these types of insurance. Both types will cover damage that occurs to your own vehicle, with the coverage limit being the cash value of your car. When you do file a claim, there is a deductible that you need to pay. You can choose a higher or lower deductible, which will impact your monthly costs but you should be aware that the lower the monthly payment the more you are likely to pay out if you need to file a claim. Sometimes these can both be packaged together in an insurance plan, but you could also buy them separately.
The biggest difference between these two types of insurance is the type of damage that they cover. Collision coverage only applies if you collide with an object or another car. Comprehensive insurance coverage anything that can be deemed outside of the control of the driver. Collision insurance is also often more expensive than comprehensive.
How to Decide
State laws may not say that you must have either of these types of insurance, but if you finance your car you will likely be required to have either or both types of insurance. Which one do you choose? Or should you have both? There are some things to consider that will help answer this. If your car is new or higher in value, it can be an excellent idea to have both. This may be expensive, but you will ultimately save money in the long run if something happens and you need to repair or replace your car. Think about where you live. Is there a high chance of threats like theft or weather disasters destroying your car? If so, comprehensive coverage is a must. How much do you drive your car? Do you frequently commute long distances? These are all questions that will help you answer which type of insurance is the best choice for you.
The safest thing that you can do is to choose both types of coverage for your car, however this may not always be the affordable option for drivers. Consider these differences to decide which option is the best for you.