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Collision and Comprehensive Insurance Explained

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Jason Metz

Collision and comprehensive insurance pay to repair damage to your own vehicle. Or if your vehicle is stolen or totaled, they pay the value of the vehicle.

Collision and comprehensive insurance are very different from liability car insurance, which pays others for car damage, other property damage and medical bills if you cause a car accident.

Car insurance companies typically sell collision and comprehensive together, but not separately.

Comprehensive insurance covers car theft and damage to your car from:

  • Natural disasters and weather such as hail, wind and earthquakes.
  • Fire.
  • Explosions.
  • Collisions with animals.
  • Vandalism.
  • Falling objects.
  • Cracked or shattered windows.
  • Acts of terrorism.

Collision insurance covers damage to your car if:

  • You hit an object such as another car, fence or tree.
  • You have damage from a hit-and-run.
  • You have damage from hitting a pothole.
  • Your car rolls over.
  • Another vehicle crashes into yours (or you can make a claim against the other driver's liability insurance).

Both collision and comprehensive have a deductible, which is the amount deducted from an insurance check for a claim on the coverage. You can choose a deductible, typically anywhere from $500 to $2,000 or more. The higher the deductible, the lower your premium. That's because the insurance company pays less for a claim if you have a high deductible. (Liability insurance has no deductible.)


If you have a stolen or totaled car, the most collision or comprehensive coverage will pay is the actual cash value (ACV) of your vehicle, minus the deductible. When insurance companies determine the ACV of a vehicle they typically consider:

  • The year, make and model.
  • Any major options such as leather interior, sunroof and transmission type.
  • The recent sales prices of similar vehicles in your area.
  • The resale value of the car's metal and parts (known as the "salvage value").

In some cases the amount you owe on a car loan or lease is more than the value of your vehicle. Gap insurance helps cover the difference between the amount you owe and the collision or comprehensive insurance check.

For example, if you owe $10,000 on your car, it gets totaled, and you get an insurance check for $8,000, you still owe $2,000 on the loan.

Who needs collision and comprehensive insurance?

Collision and comprehensive are optional, meaning you're not required to purchase them by state law. But if you're leasing or financing your car, your leasor or bank likely requires you to buy collision and comprehensive insurance.

Even if you're not required to have collision and comprehensive insurance, a good rule of thumb is to ask yourself if you can afford to pay out-of-pocket to repair your vehicle or buy a new one if it's totaled.

You might want comprehensive and collision insurance if:

  • You could not afford to buy a new car if yours were stolen or totaled.
  • You could not afford car repairs if you crashed into something.
  • You live in an area with a lot of car theft, vandalism or natural disasters.

Cost of collision and comprehensive insurance

Approximately 73% of drivers who have insurance buy collision coverage and 77% buy comprehensive coverage, according to an Insurance Information Institute (III) analysis of 2016 National Association of Insurance Commissioners data.

The average cost of collision coverage is $342.40 and the average cost of comprehensive coverage is $153.32, according to the III. Use the map below to see the average that people pay in each state for collision and comprehensive coverage.

When to drop collision and comprehensive insurance

If you have an older car, you might consider dropping collision and comprehensive insurance. A good rule of thumb is to look at how much you're paying for these coverage types per year compared to how much your vehicle is worth. For example, if you have a car that's only worth $2,500 and you have a $1,000 deductible, the maximum insurance check you can receive is $1,500. If you were paying $350 a year for collision but saved that money instead, it would take 4.3 years to equal $1,500.


Understanding that collision and comprehensive cover damage to your own car is key to deciding whether to purchase them. You don't want to cut costs by refusing them, only to find out later you wished you had the coverage.

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