The Difference Between Collision and Comprehensive Insurance

Some consumers mistakenly believe collision and comprehensive insurance are the same things. However, each provides important but different protections for a driver’s vehicle and finances.

Collision Insurance

Under Florida law, all owners of vehicles registered within the state are required to purchase a minimum of $10,000 of Personal Injury Protection (PIP) insurance coverage, and $10,000 of Property Damage Liability (PDL) coverage. PIP coverage is for each individual driver’s personal medical treatment and lost wages due to injury. PDL coverage is for property damage a driver caused during an accident, including repairs to another person’s car or property.

Neither PIP or PDL coverage is for personal property damage. Therefore, “optional” collision insurance coverage should really be understood as essential, if not required by the law.

Collision insurance coverage will pay for repair or replacement of your car if it is damaged in an accident. These coverages apply regardless of whether the accident involved another vehicle; it was a single-vehicle, such as a rollover; or involved an impact with something else, such as a tree or utility pole.

Some other facts about this type of policy:

• The consumer chooses their deductible when they purchase their policy. The higher the deductible, the more they will have to pay out-of-pocket for their expenses in the event of an accident, but the less they will have to pay for their monthly premiums. Consider the age of your vehicle and the amount you will be willing and capable of paying for repairs when you make a decision about your deductible.
• While collision insurance is optional according to Florida insurance laws, many lenders require borrowers to maintain collision insurance while they are financing their vehicles. That means that you may have a choice about collision insurance if your car is paid off, but you may be required to have it if you have a car loan.
• Collision insurance will cover the cost of vehicle replacement if the vehicle is totaled in an accident.
• Collision insurance does not cover damage to a vehicle caused by something other than an accident, such as hail or theft. It also does not cover the cost of damages to other vehicles, your medical bills, or the medical bills of any other person involved in the accident.
• Collision coverage has a limit or maximum amount that may be paid toward damage to your vehicle. The limit of your policy is usually the actual cash value of your car. So if your car was totaled, the insurance carrier would pay the depreciated value of your vehicle, minus the deductible.
• Collision coverage is recommended for anyone who does not own their vehicle outright, or who is unwilling or unable to pay the full replacement value of their car in the event that it is totaled in an accident.

Comprehensive Insurance

Like collision insurance, comprehensive insurance is an optional policy that provides coverage for vehicle repair or replacement. While collision coverage is limited to when a vehicle’s damage was caused by an accident, comprehensive coverage is for damage caused by anything other than an accident.

Some common causes of damage to a vehicle that would be covered by a comprehensive insurance policy include:

• Falling objects;
• Fire;
• Theft;
• Vandalism;
• Debris;
• Natural disasters, such as hurricane or tornado;
• Flooding or hail;
• Animals; and
• Civil disturbance, such as violent protest or riot.

Other facts about comprehensive insurance include:

• Like collision insurance, comprehensive insurance policies have a maximum limit that is usually the actual cash value of the vehicle. The rare exception is for collectible cars, that may need a policy limit that accurately reflects the vehicle’s value as a collectible.
• Also just as with collision insurance, comprehensive insurance policies are usually required by lenders when they finance a vehicle.
• Comprehensive insurance does not cover damage done to a vehicle as a result of an accident with another vehicle or an object.
• Comprehensive insurance does not cover medical expenses for anyone involved in the accident.
• According to information provided by the insurance company Progressive, the most common comprehensive insurance claims tend to be for windshield damage or damage caused by a vehicle collision with a deer.
• The data from Progressive also indicates that approximately 7 percent of drivers with comprehensive coverage make a claim in any given year. The average payout per claim is $1,400.
• In Florida, comprehensive insurance policies are required to cover windshield damage without a deductible. Lawmakers made this rule in response to the fact that many people will choose to not have their windshield repaired because they can’t afford the deductible. However, driving with a broken windshield is dangerous, and can lead to accidents that cause much more serious damage to drivers and others.
• Comprehensive claims do not depend on determinations of who was at fault or responsible for an accident.
• For anyone who needs to rent a car while their vehicle is being repaired, rental reimbursement is not a standard part of a comprehensive insurance policy, although it can be purchased as an option.

More About Comprehensive and Collision Coverage

About 77 percent of all drivers in the United States buy comprehensive coverage, while about 72 percent purchase collision coverage. According to a 2017 article from Nerd Wallet, the average cost for a Floridian driver adding comprehensive and collision coverage to their insurance policy is $819 per year. Actual costs to you for adding these coverages will depend on such factors as the value of your car, your location, driving record, and the deductible you choose. While the higher the deductible, the less you will pay in monthly premiums, but the more you will pay out-of-pocket before the insurance company begins paying out on any claims.

If you were in an accident caused by someone else’s negligence or recklessness, you may have questions about insurance and how you may be able to recover your damages. Speak to a personal injury attorney with insurance knowledge and experience in car accidents as soon as possible. The legal team at Meldon Law understand the law, and know how insurance policies may apply to a case. Contact Meldon Law at 800-373-8000 or online to schedule a free consultation and learn if we may be able to help you.