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Collision and Comprehensive Coverage: How They Work

Often referred to as full coverage when paired with liability coverage, collision and comprehensive coverage are two of the most basic and most important types of car insurance coverage. Whereas liability takes care of the other party’s expenses, collision and comprehensive cover your own property damage costs. Here’s a breakdown of how they work:

What Is Collision Coverage?

Collision coverage has you covered in any type of accident that involves a collision, whether you are at fault or not. This is not limited to accidents only involving cars, and can also cover collisions with trees, buildings, or other forms of property.

This type of coverage only extends to property damage and does not pay for any medical expenses.

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What is Comprehensive Coverage?

Comprehensive coverage covers costs in any type of accident that does not involve a collision. This can include:

  • Fires
  • Vandalism
  • Floods
  • Break-ins

As with collision coverage, comprehensive coverage only covers property damages and does not extend to medical costs.

Do I Need Both Collision and Comprehensive Coverage?

As described above, collision and comprehensive cover your property damage expenses in different situations, and so the easy answer to this question is yes. Collision and non-collision accidents are both common, and it’s important to be able to protect yourself financially in either case. While comprehensive and collision coverage are not included in most state minimum insurance requirements, it’s generally recommended that all drivers at least consider including them in their insurance policy for both the peace of mind and the very real possibility that they come in handy one day.

However, there are certain cases in which rethinking comprehensive and collision coverage might make sense -- namely, if your car is older. In most cases, older cars gradually decline in value, and comprehensive and collision coverage payouts are both based on the actual cash value (ACV) of your vehicle. If your car isn’t worth much to begin with, adding this type of coverage to your monthly payment may be a waste of money.

Whether you need comprehensive and collision coverage or not is up to you. We suggest weighing all factors, including your state’s requirements, your car’s current value, and what makes you most comfortable, and then coming to the right decision. For many drivers, these types of coverage offer a peace of mind that is easily worth the money.

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