Comprehensive coverage and collision coverage are two distinct car insurance protections that generally protect the vehicle itself. Exactly how differs, so its important you understand what each provides so you can pick the coverage and deductible that best suits your needs.

Comprehensive vs. Collision Coverage Explained

What is Collision Coverage?

Collision coverage generally insures your car against damage it sustains in a collision accident. This may include any of the following scenarios:

• Minor fender-bender involving two cars

• Highway pile-up involving many vehicles

• Running into a fence, tree, garage door, etc.

If your car is damaged in an accident with another vehicle or object, collision coverage typically pays to repair or replace the vehicle. 

Whether the vehicle is repaired or replaced is done at the discretion of your insurer, and  based on your vehicle’s value and the extent of the damage. If the cost of repairs exceeds the vehicle’s actual cash value, your vehicle will be deemed a total loss, and you will receive the actual cash value of the vehicle at the time of loss.  If the cost of repairs is less than the value of your vehicle, you would be paid for the estimate of damages to repair the vehicle.

What is Comprehensive Coverage? 

Comprehensive Covers is also known as Other Than Collision Coverage (OTC), and as the name suggests, it covers your vehicle for damage caused by nearly anything except a collision.

The following are examples of comprehensive claims: 

• Vandalism to your car (being keyed)

• Theft of your car

• Hail or water damage to your car

• Rock from the road strikes your windshield and breaks it

Somewhat surprisingly, if you hit an animal, like a deer or turkey, this is considered a comprehensive loss as well.

Unlike collision accidents, you usually don’t have a lot of control over whether these types of incidents occur. It’s tough to avoid a deer if they jump out on a highway during the night, and you can only take so many precautionary measures to prevent theft or hail damage. While you may be able to reduce the odds of these incidents occurring, there’s not a way to completely remove all the risk.

In the event that you have a covered comprehensive claim, your insurer will probably evaluate the value of your car and the extent of the damage just as they would in a collision claim. If the repairs exceed the actual cash value of the vehicle, the car will be totaled (which is common in flood losses involving saltwater).  If the car's actual cash value well exceeds the cost of repairs, you would be compensated for making the repairs.

On a side note, collision and comprehensive coverage work primarily the same on a personal auto policy as it does on a commercial auto policy.

Collision Claims Typically Impact Premiums More than Comprehensive Claims:

When you file a claim against your car insurance policy, the claim may increase your future premiums. In the case of these two coverages, whether premiums are affected typically depends on how the claim is classified.

Collision claims usually cause premiums to go up if you are found at-fault in the accident.

If you are found not-at-fault in an accident and file a collision claim, your premium may not increase; however companies use complex formulas when determining rates, so even if not found at fault, you may see a slight premium increase.

Comprehensive claims don’t impact premiums as severely since there’s frequently little or nothing that a driver can do to avoid them.   

The one exception to comprehensive claims is if you repeatedly file the same type of claim. Multiple comprehensive claims might raise eyebrows at your insurance company, and increased premiums could follow. This is often because either your car is at an increased risk of damage or there’s something you could do to lower risk (e.g., get a car alarm if frequently broken into, or garage your vehicle if you live in an area susceptible to hail.)

Should I Carry the Same Deductible for Collision and Comprehensive Coverage? 

That is a personal decision; however, we at HPM Insurance typically encourage a lower comprehensive deductible given it is generally used more often than collision coverage.  If you are driving along the road and a rock cracks your windshield, you may not be happy to shell out $500.  We also find the savings in premium not as significant in having a higher deductible on comprehensive coverage.  That said, some insurance companies offer a separate comprehensive deductible for glass coverage.  If this is the case, we will encourage you to keep the glass deductible lower than the other comprehensive and collision deductibles.  

If I am a Good Driver, Why Should I Even Have Collision and Comprehensive Coverage?

This is a good question, and if you do not have a loan on your vehicle, you are not required to carry collision or comprehensive coverage.  However, just because you are a good driver, does not mean you won't have an accident.

Here is a scenario we have seen play out in various forms over the years:

You pay-off your car and remove the collision coverage.  In NH (the live free and die state where car insurance is not required), you proceed through a green light, only to get T-boned by a driver who ran the red.  You are not legally at fault, but the other driver does not have insurance.  If you had collision coverage, you could file the claim with your own insurance company, pay your deductible, but get your car fixed and move on.  As you don't have collision coverage, you are on your own and need to personally sue the other driver and hope to recover something.  Short of being a lawyer yourself, this process is complicated, lengthy and often disappointing.

If you have a good driving history, the cost of the collision coverage should be relatively low, so we encourage our clients to consider the possibilities before removing this valuable coverage.

Get the Coverage Advice You Need to Make the Right Decisions

All car insurance coverages, including comprehensive and collision coverage, should be selected based on your particular car and situation. For help finding a policy that has the coverages you need, contact the independent New Hampshire insurance agents at HPM Insurance. Our knowledgeable agents can walk you through the nuances of these and other protections, and make sure you end up with a policy that’s right for your situation.