The difference between comprehensive and collision auto insurance coverage

Seemingly everyone is confused by certain word pairs. Is it affect or effect? Compliment or complement? How about hanged or hung?

In the world of auto insurance, here’s another pair of words that can also be confounding — collision and comprehensive.   

What do they mean? What’s the difference? Which one do I need …most?

 

Montgomery Insurance Services believes it’s important for all drivers to know the distinction and value of each. It’s especially important knowledge to have in the Delaware Valley, as mandatory insurance requirements differ in Pennsylvania, New Jersey and Delaware. Plus, and here’s where it can get especially murky, both comprehensive and collision insurance coverages can pay for the damages to your vehicle — but not always under the same circumstances.

Let’s do a deep dive into both facets.

Comprehensive insurance

This is the coverage on your policy that helps to pay to replace or repair your vehicle if it’s stolen or damaged, provided the incident is not classified as a collision. Comprehensive typically covers damage from fire, flood, vandalism, hail stones or a falling tree, as examples.  

Both limits and deductibles apply to this coverage. A good comprehensive deductible is the amount you as a policyholder can afford to pay if your vehicle is damaged by an incident other than a collision. And before you decide upon the right deductible, you should consider how likely you are to file a comprehensive claim. While that may sound odd, if you live in an area that is prone to natural disasters or has a high crime rate, for example, you may want to consider opting for a lower deductible.

Your choice impacts the cost of your insurance policy — the higher your deductible, the lower your premium. Deductibles for comprehensive insurance are typically $500 to $1,500 for most policies, but the range can be any where from $100 to $2,500 depending on your needs. 

To be clear, your deductible is the amount you have to pay out-of-pocket when filing a claim. If your vehicle strikes a deer that creates $4,000 in damage, and your deductible is $1,000, Montgomery Insurance Services will pay$3,000 for the repairs.

Comprehensive insurance protection, while highly recommended, is not mandatory for drivers in NJ or DE. In PA, while not mandatory, most banks or lenders require this coverage before issuing a car loan.  

Collision insurance

This is coverage on your policy that helps to pay to replace or repair your vehicle after damage from a collision with another vehicle, objector building. Collision typically covers damage when you are at fault for crashing into another vehicle, if you hit a tree or fence, if you crash into a structure or garage door, or if your car rolls over and requires repair, as examples.

Collision insurance typically costs more than comprehensive coverage. And much like comprehensive, limits and deductibles apply to this coverage. Before you choose the deductible right for you, consider some important factors. How much is your vehicle currently worth? Do you own or lease your vehicle? How soon are you planning to change vehicles?

Much like comprehensive, your choice of deductible impacts the cost of your policy — the higher your deductible, the lower your premium. Deductibles for comprehensive insurance are typically $0, $500 or $1,000 for most policies but, again, your choice should hinge on your particular circumstances.

One especially important note. If your vehicle is declared a complete loss — or totaled —following a collision, an insurance company will pay you for the depreciated value less the deductible for your wreck. This “reverse sticker shock” means you likely will not be able to replace your car, SUV or light truck with a similar make or model without incurring personal expense. 

Collision insurance protection is also highly recommended, but not mandatory for drivers in NJ or DE. In PA, while not mandatory, most banks or lenders require this coverage before issuing a car loan. 

Connecting the dots

Creating your vehicle insurance policy requires a number of personal choices. But some decisions are not up to any of us.

In PA, NJ and DE — and in virtually all other states — the protection below is required for all licensed drivers. It is, of course, embedded in all policies issued by Montgomery Insurance Services.

  • Liability Insurance pays others for damages that you cause if you are responsible for an accident.
  • Personal Insurance Protection pays medical expenses if you or other persons covered under your policy are injured in an accident.
  • Uninsured Motorist Coverage protects you if you are in an accident with someone who is uninsured or underinsured.

Your Montgomery Insurance Services agent is an expert at solving the puzzle that is today’s auto insurance. For cost-saving flexibility — and for only the valuable coverage you need — contact us today at 610-565-8280 or at info@montgomeryinsurance.com for a no-obligation consultation.

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Why Montgomery?

From the start of your relationship with a Montgomery agent, your insurance strategy is always monitored, always evaluated for efficiency and always subject to a cost-effective adjustment when needed.  It’s why our clients — our friends and neighbors in the Delaware Valley — have invested their trust and faith in us for more than 75 years.

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