Personal Auto: Collision vs. Comprehensive Coverage

Though your state laws may not require you to purchase both collision and comprehensive coverage for your Automobile Insurance policy, it makes wise sense to do so. These coverages provide specific protection for various losses, which can cost you big in the event that your vehicle is damaged or stolen.

Top Ways to Save on Your Premium:

  • Consider raising your deductible
  • Keep up your good driving record
  • Drive less to qualify for a low-mileage discount
  • Drive a car with safety features such as anti-lock brakes, airbags, etc.
  • Install an anti-theft device
  • Ask about our multi-policy discounts

The Basics

Collision and comprehensive coverages provide financial safety nets in the event that your vehicle is physically damaged and needs to be repaired or replaced. Though these coverages are generally not required by state laws, they
are certainly attractive options to reduce your financial hardship during a loss.
Also, if you are financing a loan for an automobile, your lender will most likely require both collision and comprehensive coverage as part of your Automobile Insurance policy.

Collision Coverage:

Collision coverage pays for the cost to damage repairs, and will even replace your entire vehicle, if it is beyond repair when you are at fault. Typically, you will collect only the actual cash value of your car versus the replacement cost value. Gap insurance protects
you in the event you owe more than your vehicle is worth.

  • This is generally the most expensive portion of an Automobile Insurance policy.
  • Premiums are based on your deductible, driving record and whether the coverage is truly necessary.
  • Selecting a higher deductible (example: $1000 or $1500) will keep premium costs low, but you will pay more out of pocket in the event you are in an accident.
  • If your driving record is fairly clean (no or very few tickets or accidents), your premium will be lower because you will be less likely to have a collision.
  • If you fully own your vehicle or drive one that is extremely old and has little replacement value, then the premium may be high.

Comprehensive Coverage:

Comprehensive coverage pays for damage to your vehicle that is caused by an unknown party (theft, vandalism) or “Act of God”—fire, natural disasters or hitting an animal on the road.

  • Coverage comes with a deductible and the insurer will only pay as much as the vehicle is worth at the time of the wreckage.
  • To calculate how much your car is worth, look up the Kelley Blue Book value or the National Automobile Dealers Association’s Official Used Car Guide value. If your car is worth less than the coverage, it is not a worthy investment.
  • Comprehensive coverage has many limitations, so it’s best to review your policy carefully to assure that you are properly covered.

Understanding your coverage options will give you the power to make wise decisions when it comes to your Automobile Insurance policy.

Contact IronRisk Strategies at to learn more about collision and comprehensive coverage, and how we can insure you to protect against losses.