The purpose of every insurance is to provide you financial aid in the time of crises. With the increase in the possibility of accidental events, the demand for insurance has also increased. People are increasingly investing in car insurance to secure their future and be safe in case of accidents. However, the need and expectations of car-owners are often diverse. The providers are coping with the diverse demands of the customers by providing various types of insurance plans for your car. Two of the most common plans are comprehensive cover and collision cover. These are among those three-four options which your provider will discuss with you during the first meeting. Both the plans collectively offer protection for you and your vehicle but differs from each other in many ways. Here is a comparative study of the two types of insurances and who to decide between them. We would compare them to the following factors.
This refers to the cases or incidences that are covered by each type of insurance plan.
The collision insurance included only incidences that are related to collision or accidents. These include events like:
- your car running into objects like trees and poles
- Your car disbalances and rolls over
- You collide with other vehicles
- Your car gets damaged due to hitting a pothole
- Comprehensive insurance
Comprehensive insurance covers an extensive list of occurrences which include incidents related to accidents and otherwise. A summarized would include:
- collision with objects or other vehicles
- Accident with animals
- Damage due to falling object
- Damage due to fire, stealing, natural disasters, and vandalization
- Deductibles and cover limits
Deductibles are the amount that you agree to pay out of your pocket. For every claim, your insurance company will pay the amount covered minus deductibles. The same applies to the cases when your vehicle is stolen or damaged beyond repair. You will get the amount of car value after applying the depreciation and subtracting the deductibles. This means you will get a considerable amount to buy a new car but will also have to dig a bit in your pocket. Both comprehensive and collision insurances allow you to set the deductible amount. Also, the maximum amount that the insurance company will pay you, the cover limit, in both types of insurance is often the actual cash value of the vehicle (depreciation applied).
Things not covered
Each type of insurance has limitations and does not include certain things in the cover.
Collision insurance is limited to the protection of the losses due to collision and excludes all other aspects. These include damage to the third-party or third-party property, damage due to fire, etc.
It is often said about comprehensive insurance that includes everything you can possibly lose due to your car. However, it also has a set of exclusions like the depreciation in the car’s value, drunk driving, driving without a license, etc.
Factors to consider while deciding between the two
Comprehensive insurance provides wider coverage but is expensive. On the other hand, collision insurance costs less but offers limited benefits. To take the right decision, you should consider four major factors. These include the value of the vehicle, chances of an accident, your saving and budget, and the area you live in.