Comprehensive vs. Collision: Do You Really Need Both?

Although comprehensive and collision coverage aren’t required by law, some drivers may need both forms of insurance for their vehicles.

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Updated May 13, 2024
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If you’re like most people, you may think your car insurance premiums are too expensive. According to the National Association of Insurance Commissioners (NAIC), the average cost of car insurance is $1,204 per year.

Comprehensive and collision coverages make up about half of auto insurance premiums. If you’re looking to reduce your expenses, it might make sense to consider dropping one or both forms of coverage. This may depend on your type of vehicle ownership, finances, risk tolerance, and vehicle value.

But what’s the difference between comprehensive versus collision insurance? And do you really need both coverages?

In this article

Comprehensive vs. collision insurance

Unlike liability insurance, collision and comprehensive insurances aren’t required by any state law. Instead, they are optional forms of coverage that protect your own vehicle.

Collision and comprehensive insurances cover different things. In simple terms:

  • Collision insurance: Coverage applies if your vehicle collides with an object, such as a light post, tree, or another car. Collision coverage pays for repairs to your car. If the car is totaled, collision insurance would pay for its value rather than pay to fix it.
  • Comprehensive insurance: Coverage applies if your car is damaged in ways other than a driving accident. Comprehensive coverage pays for repairs to your vehicle. For example, if thieves smash your car’s windows, you run into a deer, or a hail storm damages your car, comprehensive coverage would pay for the repairs or provide a payout equal to your car’s value.

Both forms of coverage are usually required if you’re leasing the vehicle or financing it with a loan.

Coverage Comprehensive insurance Collision insurance
Natural elements (fire, tornadoes, etc) Yes No
Theft and vandalism Yes No
Car accident No Yes
Other covered situations Comprehensive insurance may also cover damage from animals Collision coverage may also cover damage from potholes
Situations not covered Damage caused by hitting another vehicle or object Repairs for another vehicle and costs of medical treatment for you, your passenger or the other driver

How does comprehensive insurance work?

Comprehensive insurance covers situations out of your control that cause damage to your vehicle. Typically, comprehensive insurance covers weather-related events, vandalism, or fire. For example, if your town is flooded and your car has water damage, comprehensive insurance would pay for its repairs or would pay you for its current value.

According to the latest data released by the NAIC, the average cost of comprehensive coverage was $171.87 per year. Factors that affect car insurance rates include:

  • The type of vehicle insured
  • Typical cost of repairs for your car’s make and model
  • Crime rates in your area
  • Location, including your city and state, and whether you live in an urban or suburban area
  • Whether you store your car in a garage or use street parking
  • Your selected deductible

Typical comprehensive policies have deductibles ranging from $100 to $2,500. The higher the deductible, the lower your premiums will be. But you’d have to pay more out of your pocket before insurance kicks in if your car needs repairs after an incident.

How does collision insurance work?

Collision insurance covers your car if you’re involved in an accident with another vehicle or object. For example, if you didn’t see a stop sign and hit a car or veered off the road into a neighbor’s fence, collision coverage would pay for the repairs to your vehicle.

The NAIC reported that the average premium for collision coverage was $381.43 per year. Your cost will vary based on the following variables:

  • The type of car you drive
  • Typical cost of repairs to your make and model of vehicle
  • Your driver safety record
  • Usage and annual mileage
  • Your selected deductible

In general, collision deductibles range from $0 to $1000.

What both auto insurances share

Although comprehensive and collision insurances cover different situations, they have some similarities:

  • They pay for your property damage. Liability insurance coverage pays for damages or injuries you cause to others. By contrast, collision and comprehensive coverages pay for the repairs or replacement of your property after a covered incident.
  • They may be optional. Collision and comprehensive coverages aren’t required by law. They’re optional forms of insurance, however, that might not be the case if your car is leased or financed. Most lenders will require you to carry both collision and comprehensive insurances to have full coverage for your car is owned outright or your lease is over.
  • They’re purchased together. Collision and comprehensive coverages usually cannot be purchased separately from one another, but you may be able to choose different deductible levels. For example, your collision coverage may have a deductible of $500, whereas your comprehensive coverage has a deductible of $100.
  • You don’t set the coverage limit. With liability insurance, you could choose how much coverage you want. But with collision and comprehensive coverages, you don’t have the same option. Instead, the maximum amount of coverage is based on the market value of your car.

3 important differences between comprehensive insurance and collision insurance

When researching your auto insurance options, it’s important to understand the differences between collision and comprehensive types of coverage.

1. Coverage

Collision coverage would pay for repairs to your vehicle if you got in an accident with another vehicle or an object. But it doesn’t pay for repairs due to damages from natural disasters or theft.

Comprehensive coverage would pay for repairs for damages that occur outside of your control. If a thief steals your car or a storm causes a branch to break your windshield, comprehensive coverage comes into play.

2. Cost

Comprehensive insurance quotes are usually cheaper than collision insurance quotes. The NAIC reported that the average annual premium for comprehensive car insurance was $171.87 per year. On the other hand, the average cost of collision insurance was $381.43 per year. That’s because collision claims are more common than comprehensive claims.

Insurance companies use several factors to determine your coverage cost. Some of these factors are auto insurance secrets and aren’t always declared. Some of these factors include where you live and crime rates in your area.

3. Deductibles

Although comprehensive and collision policies usually have to be purchased together, they could have different deductibles. Comprehensive policies usually have deductibles ranging from $100 to $2,500, whereas collision deductibles range from $0 to $1,000.

Which auto insurance should you choose?

In most cases, you can’t choose to get only one form of coverage. If you want one type of property damage insurance, you usually have to get both collision and comprehensive coverages.

Property damage coverage isn’t required by law, but it could make sense to carry a policy that includes liability, collision, and comprehensive coverages. The average premium cost for a policy that includes all three coverages is $1,204 per year.

If you’re looking to save money on car insurance and are trying to decide whether collision and comprehensive insurances are worth the expense, ask yourself the following questions:

Do you own your car outright?

While states have different laws around liability insurance, no state requires drivers to have collision or comprehensive coverage. However, if you are leasing or financing the vehicle, your lender likely will require collision and comprehensive coverages as part of your contract.

How much is your car worth?

Whether collision or comprehensive coverages are worth it might depend on your car value. A general rule of thumb is that you could consider dropping your coverages if their premium is more than 10% of your car’s value.

Could you afford to replace or repair the car on your own?

When you’re considering what coverage you need, be sure to consider the state of your finances. Without collision and comprehensive coverages, you may have to pay for all the repairs to your car yourself. If it’s totaled, you may have to buy another car on your own.

If your car is older or inexpensive, you may not need coverage because you could repair it or replace it with cash. But if you have a newer vehicle and would struggle to repair or replace it, adding collision and comprehensive coverages to your policy might make sense.


Is comprehensive better than collision insurance?

One type of insurance isn’t better or worse than the other. Comprehensive and collision insurance provide different coverages. Comprehensive pays for repairs for damages that occur outside of your control, while collision insurance pays for repairs after an accident.

What is liability insurance?

Liability insurance is the portion of auto insurance that drivers are required to have by state law. Liability coverage usually includes both bodily injury coverage and property damage coverage. Liability insurance pays for damages or injuries you cause to other people or their property.

What is the main difference between comprehensive and collision insurance?

The main difference is what they cover. Collision insurance will cover repairs after your vehicle is in an accident with another car or an object. Comprehensive coverage will cover repairs for damages that are caused by natural disasters, theft, or falling objects.

Bottom line

Do you really need collision and comprehensive insurance? If you have a new car — or if it’s expensive to replace or repair — you may prefer having both forms of coverage, even though they aren’t required by law.

Learning how car insurance works could help you understand your car insurance policy and learn the ins and outs of car insurance. When you’re ready to buy a policy, check out our list of the best car insurance companies.

  • You could save up to $600 with some companies
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Author Details

Kat Tretina

Kat Tretina is a personal finance expert focusing on practical financial matters, including student loans, debt repayment, side hustles, insurance, and healthcare. Drawing from her personal experience, she aims to simplify complex financial topics and provide individuals with the information they need to make informed decisions.