Do You Really Need Both Comprehensive and Collision Coverage?

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Will you regret not getting the right insurance coverage?

There are many different kinds of auto insurance that drivers should consider purchasing. Comprehensive and collision coverage are optional types of car insurance coverage. Because they are optional, some drivers may wonder whether they're really necessary.

For many drivers, however, the answer is yes. That's because they cover different things, and each provides very important protection from loss.

Why it pays to have comprehensive and collision coverage

To understand why comprehensive and collision coverage are both good purchases for most motorists, let's look at what type of protection each provides.

Collision coverage pays for damage to the policyholder's vehicle in the event of an accident that the policyholder was at fault for causing. Without collision coverage, a driver who caused an accident would be on their own to pay to repair their vehicle or to replace it if it was damaged beyond repair.

Comprehensive coverage, on the other hand, doesn't cover any damage from collisions. But it does cover other kinds of damages that could occur to a car. And there are lots of different things that could go wrong that comprehensive insurance would cover but which collision coverage wouldn't pay for. This includes:

  • Hail or hurricane damage
  • Debris hitting and cracking your windshield
  • Car theft
  • Fire and explosions
  • Violence from civil unrest
  • Collision with a deer or other animal

Together, collision and comprehensive coverage pay for most things that can go wrong with a vehicle. If drivers don't have either type of coverage, they would be on the hook for covering all of the costs on their own for any problems that aren't caused by another driver who is held responsible for their losses.

In terms of how much car insurance coverage to get, most people should buy both collision and comprehensive coverage -- especially if they cannot afford to pay out of pocket for a brand new vehicle in the event that their car is a total loss and can't be repaired.

There are a few exceptions, though. Most notably, drivers who have a low-value vehicle may not want to buy these types of coverages. That's because they often come with deductibles, which is money the driver must spend out of pocket before insurance picks up the rest of the losses.

If a policyholder's car is worth $2,000 and there's a $1,500 deductible on the insurance policy, then it simply may not pay to buy collision or comprehensive insurance coverage. Even if the car was totaled, the covered driver would end up getting just $500 from the car insurance company. Paying insurance premiums for months or even years in order to get that $500 may not make financial sense.

Of course, for drivers who have an inexpensive car that they can't afford to replace should something happen to it, it may be worth buying coverage anyway -- and perhaps even paying a little extra to get a collision and comprehensive plan with a low deductible.

Ultimately, each driver will need to decide if it's worth the risk of paying for vehicle repair or replacement out of pocket, or if it makes sense to pay premiums to transfer the risk of those losses to the insurer. For most motorists, taking on the risk simply isn't worth it and buying collision and comprehensive coverage is the way to go.

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