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Understanding Collision and Comprehensive Insurance

No state requires you to purchase collision and comprehensive coverage, but lenders and car leases might.
Feb. 2, 2017
Auto Insurance, Insurance
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Collision and comprehensive insurance are two of the most important types of car insurance to understand. They’re not legally required by any state, but they can come to the rescue in a variety of situations.

What collision and comprehensive insurance cover

Collision and comprehensive coverage are similar and are often sold as a package, but they don’t cover the same problems.

Collision insurance pays for:Comprehensive insurance pays for:

  • Damage to your car in an accident you cause.
  • Damage to your car if you hit an object such as a fence or pole.
  • Damage to your car if someone else hits you. Another option in this case is to make a claim against the other driver's liability insurance.
The value of your car if it's stolen and not recovered, and damage from:

  • Weather such as tornadoes or hail.
  • Floods.
  • Fire.
  • Falling objects.
  • Explosions.
  • Crashes with an animal, such as striking a deer.
  • Riots and civil disturbances.

The cost of collision and comprehensive insurance

NerdWallet averaged rates for policies with liability, collision and comprehensive coverage from the three biggest insurers in the four most populous states. To find our sample quotes, we used a $500 deductible, which is the amount deducted from a claims check. We also assumed that the insured vehicle was worth $22,000.

You can save money by raising your deductible. But do this only if you’re prepared to spend more of your own money to fix or replace your car.

The cost to add collision and comprehensive coverage varied widely among the insurance companies we sampled, from under $600 a year to more than $2,000. Your own cost will depend on the value of your car, your location, your driving history and the deductible amount that you choose.

StateCost of a basic liability policyCost of a policy with comprehensive and collisionCost to add comprehensive and collision
New York$1,791$3,312$1,521

You can save money by raising your deductible. Many policies offer ones as high as $2,000. But do this only if you’re prepared to spend more of your own money to fix or replace your car. Shop around for prices to see if you’re getting a good deal. 

» COMPARE: Car insurance quotes from multiple companies

Should you buy collision and comprehensive coverage?

Yes: If you took out a car loan to buy your car, your lender will probably require that you carry collision and comprehensive coverage.

Yes: If you lease your car, your leasing company likely requires you to buy collision and comprehensive coverage.

Yes: If you couldn’t afford to replace or significantly repair your car if you crashed it or if someone stole it.

Yes: If your area has a high incidence of car theft, vandalism, severe weather (like hail) or animal collisions and you don’t want to pay for repairs yourself, or a new car.

No: If your car is older and not worth a lot. Remember the maximum payout will be the value of your car if it’s totaled or stolen. If your car’s value is low, consider whether the potential payout would be worth the premiums you’ll pay. Remember, too, that the deductible amount will reduce any claims check. Check out NADAguides for your car’s current value.

About 77% of all U.S. drivers buy comprehensive coverage, and 72% buy collision, according to an Insurance Information Institute analysis.

Methodology for the costs of collision and comprehensive coverage: NerdWallet researched rates in the four most populous states for a 30-year-old woman. In all cases, the driver carried 100/300/25 liability limits and drove a 2015 Toyota Camry. In cases when comprehensive and collision were added, they had a $500 deductible. In Florida the driver also carried $10,000 in personal injury protection, as required by state law. The rates here were averaged from the three largest insurers in each state. Your own rates will be different.