Often times when quoting a potential clients’ auto insurance, we’ll ask what they currently carry for deductibles on their comprehensive and collision coverage. The most common reply is some form or variation of “huh” or “what”? This sparks us to educate the potential client on the difference between the two coverage options and elaborate on what they cover and how they work. The two coverage options help make up what is considered full coverage insurance and understanding the difference between the two is vital.
Collision coverage is probably what you expect it is…coverage for collision with another vehicle or structure. If you’re involved in an at-fault accident, you’ll use this coverage to pay for your vehicle (your liability coverage covers the other vehicle). Your vehicle will be repaired by a shop of your choosing and paid for by your insurance provider less the deductible. The deductible is the amount you pay out of pocket. Deductibles are in place to keep people honest and have the insured assume some risk in their own vehicle insurance. The higher the deductible you choose, the less this coverage will cost, as the insured then assumes more of the risk out of their own pocket in the event of an accident. The most common deductible our insured’s carry for this coverage is $500, although their are many options from $0 up to $2,000.
Comprehensive coverage, or comp, as it is commonly referred to, covers things that happen to your vehicle while NOT involving another vehicle or structure. Comp coverage includes: hail damage, theft of vehicle, vandalism, fire, windshield crack and breaks, and more. Comprehensive coverage actually comes into play if you were to strike a deer or another animal with your vehicle, which often comes into play in the state of Indiana. The most common deductible for comprehensive is probably $250 but sometimes clients elect to go lower due to the small nature of most comp claims compared to collision claims. The smaller nature of claims also sets the price of comprehensive coverage lower than collision.
Another important note, during the winter months, when people may store a pleasure vehicle or motorcycle, they’ll often remove collision and keep comprehensive until they drive it again in warmer months.
If you have any further questions about full coverage insurance or the difference between comp and collision please don’t hesitate to contact us. Whether you’re in Indianapolis, Central Indiana, or anywhere in the Hoosier State, we’ll be happy to help you out as much as possible. Thanks so much