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Comprehensive car insurance comparison

comprehensive-auto-insuranceComprehensive insurance and collision coverage are two of the most important types of car insurance coverage to understand. They’re not legally required by any state, but most drivers buy both to protect the value of their vehicles.

They’re similar, but comprehensive and collision don’t cover the same risks. It’s important to understand how each works when deciding whether to add them to your required coverages.

Comprehensive insurance

Although its name implies otherwise, comprehensive insurance actually covers a somewhat limited list of risks. It will pay the value of your car if it’s stolen and cover repairs for damage caused by events other than car accidents, including:

  • Natural disasters and severe weather, such as tornadoes or hail
  • Floods
  • Fire
  • Falling objects
  • Explosions
  • Contact with an animal, such as striking a deer
  • Riots and civil disturbances

In some cases, it’s a good idea to purchase comprehensive insurance without collision. For example, if you plan to leave your car parked for a while, you might still want to protect against theft and severe weather, but crashing into another car wouldn’t be a concern.

Collision insurance

Collision insurance pays for repairs to damage caused by accidents involving other cars or inanimate objects, such as a telephone pole, brick wall or tree. You’d generally make a claim on your collision coverage if you were at fault for the damage; otherwise, you’d make a claim on the other driver’s liability insurance.

Comprehensive and collision costs

Although most drivers find them worthwhile, comprehensive and collision aren’t cheap.

NerdWallet averaged rates for both from the three biggest insurers in the four most populous states. To find our sample quotes, we used a $500 deductible and assumed that the insured vehicle was worth $22, 000.

State Cost of a basic liability policy Cost of a policy with comprehensive and collision Cost to add comprehensive and collision
California $704 $1, 685 $981
Florida $2, 076 $2, 895 $819
New York $1, 791 $3, 312 $1, 521
Texas $904 $2, 683 $1, 780

Methodology: 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.

The cost to add comprehensive and collision varied widely among the insurers we sampled, from under $600 a year to more than $2, 000. Your cost will depend on the value of your car, your location and your driving history.

You can save by raising your deductibles. 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. Maintaining a good driving record, asking about discounts and shopping around for car insurance quotes are other ways to keep premiums low.

How to decide

If you borrowed money to buy your car, your lender will probably require that you carry both comprehensive and collision coverage.

If you own your car outright, comprehensive and collision aren’t required — but if you’re like most drivers, and couldn’t necessarily pay to replace or significantly repair your vehicle, you might still want them.

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

Consider these questions when deciding on comprehensive and collision insurance:

How much is your car worth? If it’s fairly new, comprehensive and collision insurance might make sense. It would cost a lot to replace. But as your car’s value decreases, so does the benefit you’ll get from coverage.

Let’s say it costs you $1, 000 per year to add comprehensive and collision with a $500 deductible. If your car is only worth $2, 500, the most you’d receive if it were stolen is a check for $2, 000 — so it probably wouldn’t be worth the expense. To perform this calculation for yourself, check your car’s current value at Kelley Blue Book.

How would car damage or theft hurt you financially? Could you pay for repairs out of pocket, go without a vehicle or buy a new one if your car was out of commission due to an accident? If not, comprehensive and collision are probably worth the price.

What are hazards where you live? If your area has a high incidence of theft, vandalism, severe weather or animal collisions, comprehensive coverage could be a good buy.

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