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Many drivers don't fully understand comprehensive and collision auto insurance, and not knowing can be costly. Find out how to buy the right amount of coverage and pay less for it.

Comprehensive and collision insurance are two types of car insurance that are optional for many drivers. States do not require drivers to obtain these coverage options, as they do with liability insurance.

While comprehensive and collision auto insurance are frequently discussed together, they can be purchased individually or jointly. Learn how much is comprehensive insurance and how it is different from collision coverage. Keep in mind that these coverages usually do extend to rental cars you may drive, but do not extend protection should you have an accident while driving a friend's car. Auto insurance typically follows the vehicle, not the driver, except for rental cars.

Collision and comprehensive are referred to as "physical damage" coverages because they cover damage to your vehicle. If you finance or lease your vehicle, your lender will require you to carry these coverages.

  • Comprehensive car insurance is an insurance policy that covers damages to your car caused by fire, theft, natural disaster, civil disturbances etc.
  • Collision car insurance covers you if you get into an accident with another car or property. It covers the cost of repairs if your car suffers damage due to collision.
  • Collision and comprehensive insurance will not pay more than the actual cash value of your car.
  • According to insurance.com’s rate analysis, average costs for coverage vary by state, with the average being $192 for comprehensive coverage and $596 per year for collision coverage.
  • You may see an increase in the car insurance rates after the collision claims than from the comprehensive claim.

How much does comprehensive and collision coverage cost?

The cost of car insurance coverage depends on many rating factors, from your age, gender and driving record to your location and credit rating. Especially important for collision coverage rates is the type of car you drive and your driving record.

Insurance companies have internal claims information on your model car, and if the rate of claims and/or repairs is high, you may have to pay more for your coverage. If your car has a high theft risk, your comprehensive rate is likely to be a bit higher.

Your driving record also shows what type of risk you are to car insurance providers. If you're accident-prone and have multiple past claims, expect to pay more for your collision coverage.

Location is also a big factor influencing cost, if you live in a congested, urban area you'll pay more than someone in a rural area. Just as someone in an area that is prone to hail storms (and thus hail claims) will pay more than someone who lives where weather claims are low.

Average costs for coverage vary by state, the average cost of comprehensive coverage is $192 and the collision coverage cost $596 per year, according to a rate analysis by Insurance.com.

The chart below breaks down collision and how much does comprehensive insurance cost by state. Enter your state in the search field to see what you can expect to pay.

State Comprehensive Collision Total
North Carolina$116$416$531
North Dakota$333$431$764
New Hampshire$88$478$565
New Jersey$102$450$552
New Mexico$203$456$659
New York$145$700$844
Rhode Island$120$728$847
South Carolina$310$609$918
South Dakota$461$417$878
West Virginia$175$463$638
National average$192$526$723

What is comprehensive insurance?

Comprehensive refers to auto insurance that covers damage to your car that is not caused by a collision. The word "comprehensive" means "completely or broadly," according to Merriam-Webster's dictionary. So, it's understandable that insurance buyers might think that "comprehensive" means "full coverage," or that it may reimburse them for any kind of damage to their cars - but that's not the case.

What does comprehensive auto insurance cover?

Examples of items covered by comprehensive insurance include damages caused by:

Comprehensive Car Insurance Collision Coverage

  • Windshield repair*
  • Damage caused by falling or airborne objects like hail, rocks or tree branches.
  • Theft
  • Vandalism
  • Fire
  • Natural disasters
  • Civil disturbances
  • Striking an animal (including deer) or bird

*Generally, most auto insurers cover 100 percent of the cost to repair smaller cracks. If your windshield needs to be replaced, you normally will have some out-of-pocket costs, in the form of your deductible. Your deductible is the amount you owe before your physical damage coverage, collision or comprehensive, kicks in. You choose your deductible amount at the start of your policy.

Comprehensive coverage does not pay for damages triggered by a collision, thus it is also known by the name "other than collision."

Natural disasters covered by comprehensive coverage includes damages caused by hurricanes, tornadoes, wind storms, and flood waters.

What is comprehensive deductible?

Your deductible is the amount you owe before your physical damage coverage, collision or comprehensive, kicks in. You choose your deductible amount at the start of your policy. Generally, most auto insurers cover 100 percent of the cost to repair smaller cracks. If your windshield needs to be replaced, you normally will have some out-of-pocket costs, in the form of your deductible.

What's not covered by comprehensive insurance?

Examples of items not covered by comprehensive insurance include-

  • Comprehensive coverage does not pay for damages triggered by a collision, thus it is also known by the name "other than collision".
  • Damage to another person's vehicle due to collision
  • Your (or fellow passengers') medical bills after an accident
  • Natural disasters covered by comprehensive coverage include damages caused by hurricanes, tornadoes, windstorms, and floodwaters.

What is collision insurance?

Collision auto insurance covers damage to your vehicle caused by contact with another vehicle or object, including rollovers. Your collision coverage covers your vehicle regardless of who is at fault for the damage.

What does collision insurance cover?

Examples of items covered by collision insurance include damages caused by:

  • Hitting a tree or telephone pole
  • Colliding with a building, for example the drive-through window at your bank
  • Rolling or flipping your car
  • Hitting a pothole or curb
  • Backing into another car
  • Being hit by another car

Collision coverage comes with a deductible, which means you are responsible for some of the initial cost to repair your vehicle. Deductibles typically range from $250 to over $1,000 (per event, not per year). If you have a $500 deductible, and the drive-thru incident causes $1,000 in damage, you'll pay $500 and your insurer will pay $500.

If another vehicle is responsible for your car's damage, but you use your collision coverage for the claim, you still owe your deductible. However, your auto insurance company should subrogate (try to recover your repair costs from the at-fault party). If it is successful in its subrogation, your deductible may be refunded to you.

Is collision insurance worth it?

Certainly, hit-and-run accidents are covered by collision insurance, since it pays regardless of who is at fault. However, to prove that you weren't at fault, do your best to jot down the license plate number and description of the car that hit you, if you were present during the incident, and file a police report. These are great steps to prove that you are not trying to file a fraudulent claim.

It is important to file a police report right away. Larry Peyton of Farmers Insurance in Incline Village, NV, says that neglecting to file a police report and provide identifying information can cause your insurance rate to increase. That's because the insurer has no way of knowing if another party actually caused the damage, or if you're lying to protect yourself or a family member.

If your car is damaged while parked and unattended, the source of damage may not always be apparent. Find out if any cameras captured the incident or whether anyone witnessed it.

Hit-and-run insurance can seem confusing, but we have all the tools to make you feel more comfortable.

Comprehensive vs collision?

It may not always be obvious which type of physical damage insurance coverage applies, collision or comprehensive. Both types of policies are optional (from a legal perspective, though if your car is financed or leased, your lender will require them). Both pay for damage to your vehicle and both come with deductibles. Then what is the difference between comprehensive and collision insurance? There are many differences between the two coverages, and it is wise to purchase both if you want solid protection.

In general, comprehensive auto insurance pays for damages when humans have little or no control over the incident - for example, flood or mudslide damage or a deer running into your car. Collision takes care of damages that occur when a driver has more control over the situation - if, for example, you are rear-ended , or someone sideswipes you in a parking lot.

What if you hit a tree while avoiding a deer in the roadway? Should you file this as an animal damage (comprehensive) claim or collision claim? While you, the driver, do not control the path of deer, you do control your car. Even though the primary cause of damage was a suicidal deer, the ultimate ruin to your car happened because you drove your vehicle into a stationary tree, thus, it's a collision claim. If instead you hit the deer, your comprehensive coverage would cover the claim. The table below lists a few claims, and which types of insurance applies.

Incident Description Type of Claim
Damage from hitting a boulder in the roadCollision
Damage from a boulder rolling into your carComprehensive
Tree limb falls onto car roofComprehensive
Car runs into fallen tree in roadCollision
Smashed window from someone breaking into your carComprehensive
Window broken from hit-and-run driver running into your carCollision

A notable difference between collision and comprehensive coverage is that you are more likely to see future car insurance rate increase from collision claims than you are from comprehensive claims. Collision claims may be your fault, and if so, expect your rates to rise. Typically, comprehensive claims are not "at-fault" incidents so your rates should not rise, some state laws mandate protection against rate increases related to comprehensive auto insurance claims.

Hit and run accidents

Hit-and-runs present a special case, and sadly, they are not uncommon. According to the AAA Foundation for Traffic Safety, approximately 11 percent of all traffic accidents involve hit-and-run drivers. If another driver runs into your vehicle and leaves the scene without exchanging information, do your best to get a license number, description of the car and driver - if you are present during the incident.

Do I need comprehensive and collision insurance?

do you need comprehensive insurance

Just because comprehensive and collision coverages aren't legally mandated doesn't mean you don't need these types of auto insurance. The law doesn't require you to wear a coat when it's 10 below zero out, either, but most people would say it's a good idea.

"One of the biggest mistakes people make is not having the coverage," says Peyton. "Because it's almost always the person who can't afford an unexpected expense who decides to try and save a little money by dropping coverage."

Without comprehensive and collision insurance, you are at risk for covering all repairs or the total replacement of your car out-of-pocket.

Next, let's see how much is collision insurance and how much comprehensive insurance do you need. Use our car insurance coverage calculator to find the recommended coverage that is right for you.

If you have financed your car and still owe a balance, you probably won't have a choice -- your lender will almost certainly require comprehensive and collision insurance (and even dictate how high a deductible you can choose). Those who own their cars outright must decide if it makes sense to buy this additional coverage. If you want your car protected from damages from collisions and weather, fire and theft, it's a no-brainer, buy the coverage.

Local conditions may tip the balance in favor of buying insurance. If you live near a designated "open range," for example, cattle are not required to be fenced in. Not only are you more likely to collide with them, you can be held liable for damage to livestock. People who drive frequently in wooded areas may have a high risk of colliding with a deer. Your car's damages could be a comprehensive claim and damage to livestock would be a liability claim.

"There are plenty of uninsured drivers out there," cautions Penny Gusner, of Insurance.com. "Uninsured motorist property damage isn't offered in all states and where it is offered, the limits may be low, such as $2,500. Some states also have low limits for property damage liability, such as California's $5,000 limit, and an at-fault party's insurance may not cover your entire loss. Collision coverage may help you fully recoup damages in these scenarios."

According to an Insurance Information Institute study, 77 percent of insured drivers purchase comprehensive coverage and 72 percent carry collision insurance. Of those who carry comprehensive coverage, analysts at the Insurance Service Office (ISO) report:

  • 2.6 percent of people with comprehensive coverage filed a claim in 2013.
  • Claims averaged $1,621.

The state in which you live can be an important factor in this auto insurance decision. In California, Colorado, Georgia, Illinois, Louisiana and Ohio, for example, your uninsured motorist coverage will not cover your vehicle in the event of a hit-and-run. You are only protected if you also purchase collision coverage.

If your car is financed, collision and comprehensive may not be enough coverage. If you owe more than the value of the car, you also should consider gap insurance coverage (referred to sometimes as lease/loan payoff coverage). Your physical damage coverages will only pay up to the value of your vehicle at the time of the accident; gap insurance will then pay the difference between that value and what you owe to your lender. So, if the car is worth $15,000 and you owe $18,000, gap insurance can help cover those few thousand dollars you'd have to pay out-of-pocket otherwise. To get gap insurance, you must carry comprehensive collision auto insurance on your vehicle.

Comprehensive and collision insurance coverage limits

Collision and Comprehensive coverage deductible limit are the amount your policy will pay for a covered claim. The limit on coverage is typically the actual cash value of your vehicle. Unlike liability car insurance that comes with specific coverage limits, collision and comprehensive insurance tops out at the actual cash value (ACV) of your vehicle, minus your deductible.Your car’s ACV is its fair market value the immediately before a total-loss accident occurs.Thus, if your car is worth $20,000 and your deductible is $500, you could receive up to $19,500 for the car. Your settlement should also include taxes and fees you paid at purchase, since you will need to pay similar fees for your replacement vehicle.

If your car is damaged so that the cost of repairs passes your insurance company’s total loss threshold, you should receive the car’s ACV (minus your deductible amount) rather than a payment to repair your car. The total loss threshold varies but typically ranges from around 70 percent to 100 percent of the ACV.State total loss thresholds are taken into account, but insurance companies can determine that a vehical is a total loss before the cost to repair reaches the state’s threshold.For example, in Colorado the state’s threshold is 100 percent of the car’s value, but your insurer’s internal guidelines may say to total out a car when repair costs reach 75 percent of the car’s value.

The ACV your insurance company offers you as a settlement may not match up to what you believe your car is worth.If that is the case, negotiate with your insurer by bringing proof that cars from the same model year, in the same condition of your pre-accident vehicle, are being sold for higher prices in your area.

Comprehensive and collision coverage won’t pay more than your car’s ACV.If you owe a lender more than the value of your vehicle, you should obtain gap insurance that covers the difference between the ACV paid by your insurer and what you still owe the lender.

If you have a collectible vehicle whose value is extremely high or hard to determine, explore a specialty car insurance policy featuring collision and comprehensive coverage with an agreed upon value for your vehicle.This allows a restored classic to be insured for its true worth instead of being compared to unrestored vehicles of the same age in a total loss situation.

If your car is not a total loss, then your insurance company should pay for your damages, minus your deductible. This means if repair costs are $2,500 and your deductible is $500, your insurance company should pay out $2,000.

How to save on comprehensive and collision insurance?

There are a few things you can do to pay less for comprehensive and collision insurance:

Peyton says that by far the best way to save on optional coverage for your car is to combine your auto and homeowner's insurance. He also recommends looking for special discounts--for safe drivers and good students.

Increasing your deductible amount can reduce your premiums. How much you can save varies from one insurer to the next but typically is anywhere from $50 to $200 per year if you raise your deductible from $500 to $1,000.

The car you choose is a major factor on costs, but can also help you save. Many car insurance companies offer collision discounts for safety features, such as air bags and anti-lock brakes. Comprehensive discounts are given for anti-theft devices. You can even get a collision discount for a new car.

Certain occupations may qualify for discounts, including:

  • First responders
  • Doctors
  • Nurses
  • Military personnel
  • Engineers
  • Credit union employees
  • Scientists
  • Teachers/professors
  • Certified public accountants (CPAs)
  • Auto club members
  • Alumni association members
  • Certain professional groups

Different insurers throw goodies to a variety of drivers in "low risk" professions, but if you don't ask, you may not get a discount to which you're entitled.

Filing a claim

If you've decided to purchase comprehensive and collision insurance, you may be wondering how much you should buy. You can't choose how much comprehensive and collision coverage to buy; the most your insurance will pay out is the car’s actual cash value – what the car was worth on the open market just before the damage occurred – minus your chosen deductible amount.

You can negotiate the actual cash value of your car in the event of a total loss by providing examples of similar cars. Settlements should include taxes and fees paid at your original purchase point.

You may be reluctant to file a claim for comprehensive or collision damages unless necessary because your rate could increase. However, rates don't automatically go up when you make a claim.

It depends on your insurer's rules, state laws, the situation, and whether you have accident forgiveness. Here are some of the factors that might be considered:

How serious is the damage? If some vandal scratches your paint, that's less likely to lead to an increase than if he pushes your car off a cliff. More damage can cause a bigger rate increase.

If the damage is minor--a bumper needs to be replaced for $750--instead of major--the whole front end was taken off and will cost $5,000 to fix--you may not see a rate increase since the claim hasn't crossed your insurer's monetary threshold that causes a surcharge (rate increase) to occur.

Who is at fault? In many cases, your car insurance rates will increase if the accident is your fault, but not if the other driver is at fault. However, some companies will still increase your premium because you're statistically more likely to be involved in another accident. Filing an insurance claim can be a difficult decision.

How badly does the insurer want to keep your account? Safe drivers are cheaper for car insurance companies to cover. If you've been with your insurer for a long time with no problems, you may get accident forgiveness, meaning your first accident won't harm your rates.

How many claims you've had? One collision or comprehensive claim may not raise your rates, but if you've put in multiple claims - of any kind - your rates are likely to increase or your policy may not be renewed at the end of your current period. You're proving to be too high a risk if you have a multitude of claims.

Does a comprehensive claim raise rates? In general, one or two comprehensive claims should not cause your car insurance rates to rise. These incidents are normally thought of as no-fault, and some states' laws forbid insurers from increasing rates due to a comprehensive claim. However, if you have three or more comprehensive claims, the number of claims (not type of claim) can cause your rates to rise.

For collision coverage, it's wise to only make a claim for major damage. If your claim is barely above your deductible amount, pay out-of-pocket so that you're not using a claim on something you could afford to pay yourself and avoid risking three to five years' of surcharges by your insurer.

When to cancel comprehensive and collision insurance?

Many advisors recommend dropping your comprehensive car insurance when your car's value diminishes to the point that you can't buy much coverage. However, you should always consider the effect that the complete destruction or disappearance of your vehicle might have. If you need a car to get to work, and your financial position would not allow you to purchase another vehicle, keeping your coverage could be a wise choice.

When to drop collision car insurance? If your car is older, it may be time to drop comprehensive and collision insurance and put the money you're saving into an account to buy a new car when your current one dies.

First, look at the average cost of collision and comprehensive coverage; if the premiums and deductible amount for this portion of your car insurance policy cost more or the same as the worth of your vehicle, it's likely time to drop the coverage. For example, if your car is worth $1,000 and your coverage costs $500 a year plus a $500 deductible, you're not really getting anything for your money.

If your premiums don't quite match up to the value of your vehicle, then look at the 10 percent rule. If your premiums exceed 10 percent of your potential payout, experts say you may want to drop your physical damage coverages. Your potential payout is the value of your vehicle minus your deductible.

For example: If your car is worth $3,000 and you have a $500 deductible, your potential payout would only be $2,500 if your car was totaled and you placed a collision claim. Using the 10 percent rule, if your collision and comprehensive coverage cost $250 or more a year, it's time to consider cancelling the coverage.

If you could afford to replace your car if it was severely damaged or stolen, your next step is analyzing how likely that is to occur. The average American motorist gets into an accident every 11 years. That's anything from a small dent to complete destruction. If you're 18 years old and spend your evenings trying to emulate scenes from The Fast and the Furious, or you live where car theft is rampant, you might want to keep your coverage. On the other hand, if you never exceed the speed limit, keep your car garaged and only drive on Sundays, you may be at low risk if you choose to forego the optional coverage.

Depending upon your deductible and other factors, you could consider dropping both comprehensive and collision insurance if your vehicle's value is below the amounts shown below, where the cost of insurance and deductible is equivalent to the value of your car:

State Average monthly premium for both collision and comprehensive insurance $500 deductible:Consider dropping if car's value is below $1,000 deductible: Consider dropping if car's value is below
New York$41.11$993.00$1,493.00

While many insurers require their customers to buy collision and comprehensive auto insurance together, it is possible to purchase comprehensive insurance only or collision insurance only. Pricing varies by auto insurance carrier, so apply logic when deciding to purchase or forego optional insurance coverage.

Prepare yourself to make a sound decision by getting auto insurance rates specific to your situation. However, it's also an emotional decision -- you're the one who has to sleep at night.

About the author:

Gina Pogol has been writing about insurance, mortgage and finance topics since 1994. In addition to a decade in mortgage lending, she has worked as a bankruptcy paralegal, a business credit systems consultant for Experian and an accountant for Deloitte.

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