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Difference between collision and comprehensive insurance


Auto owners insurance vary from one state to another, and the laws regulating the accident cover might also vary.  However, it is important to note that there is a big difference between comprehensive insurance and collision insurance.

Comprehensive insurance coverage

While comprehensive insurance covers almost everything, it does not cover collision.  This type of insurance cover is recommended for all drivers.  It covers a whole range of losses and mostly the kind that is not covered by collision insurance.

In case the vehicle has been under finance, one would have to take both the collision as well as the comprehensive auto insurance packages.  This is due to the fact that even in the event of a disastrous accident, funds would still be available to take care of the remainder of the loan outstanding.  Lenders normally ask for proof that both the insurance packages have been taken.  This minimizes the risk for the lender, as the borrower will not have to worry about covering the damages of the vehicle and instead he/she would be in a better position to clear the outstanding loan on the vehicle.

Collision insurance coverage

In case of collision insurance, the driver is protected against all types of collisions, be it against objects, people, road, other vehicles etc.  The collision insurance cover offers protection to the driver irrespective of whether the driver is at fault or not.  With this coverage, one can also receive provisions for towing, salvage, storage etc.  The collision coverage will offer to cover costs incurred for repairs and will also provide replacement of the parts that are badly damaged.  However, if the repair or replacement is due to wear and tear as a result of improper maintenance, then the costs would not be covered by this package.

Theft, vandalism, fire, weather damage, missiles, riots and other such incidents are covered by comprehensive insurance.  However, other acts of God, vandalism or theft by members of the family or disgruntled employees, damage to tires due to negligence will not be covered by comprehensive insurance.

Hence it makes sense to take the collision as well as comprehensive insurance as a complete package or two separate packages.  But it is not advisable to take only the comprehensive package, as it is possible that even a stationary vehicle can get hit.